Bill 148: Vacation Pay

As part of the Fair Workplaces, Better Jobs Act2017, the labour laws around vacation pay had changed. This has applied to employers in Ontario since January 1, 2018.

Vacation With Pay

Under Bill 148, Ontario has increased the amount of time off an employee must take for vacation leave. These labour laws ensure that employers are providing three weeks of paid vacation to employees that have worked for the same company for five years. For employees of less than five years, vacation remains at two weeks of time off, in a 12-month employment cycle.

A vacation entitlement year is a recurring 12-month period, which begins on your employee’s date of hire. As an employer, you can establish an alternative calendar year. If you do so, your employee is also entitled to a pro-rated amount of vacation time for the period that precedes the alternative vacation cycle. This is called a “stub period”.

How to Calculate Vacation Pay

The Employment Standards Act calculates pay by the amount of time your employee has worked for you. For employees with less than five years of employment, vacation pay must be at least four percent of their “gross” wages (excluding any vacation pay) earned in the 12-month vacation entitlement year or stub period (where that applies). Because of these labour laws, vacation pay for employees with over five years of employment have increased. This is calculated as at least six percent of their gross wages in a 12-month or stub period.

Did you know?

Vacation pay is separate from holiday pay, and this goes for the amount of time off given to your employees. You can read about holiday pay here.

Do you have questions about vacation pay, or how to put together a vacation policy?

We can help you. Call Employer Line’s complimentary 24/7 helpline at 1(833) 247-3650 and speak with our human resources specialists. Whether that’s a question about calculating vacation time and pay, or writing a vacation policy, our experts are here to support your business. We’re here to have your questions answered right away.