Here are the top tips regarding “the rules” on administering vacation pay and vacation time.
- Vacation time and vacation pay are separate entitlements – While an employee is entitled to earn vacation pay from the first moment of employment, they are only entitled to vacation time after working for 12 months
- The employer is entitled to decide when vacation time will be taken but must give the vacation time within 10 months after it is earned
- Vacation time may be taken in periods of less than one week only if the employer and employee agree in writing
- A separate, individual written agreement is needed with each employee to include (pay out) vacation pay on each paycheck instead of accruing (saving it up to use at vacation time).
- Employees may not agree to forgo vacation pay, but they can forgo vacation time with approval from the Ministry of Labour and a written agreement from the employer.
- Vacation pay amounts are affected (reduced) by leaves of absence, since it is calculated based on earnings. However, the employee continues to accrue vacation time while on leave, which can be added on to the leave in most cases.
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