New 3rd Week of Vacation: How Do You Handle That?

This change comes into force on January 1, 2018, but the timelines to “use” the vacation do not.

If your company or organization already offers three weeks (or more) of vacation to employees whose period of employment is five years or more, then this change will not affect your company or the policies you have in place.

If your company or organization does not already offer three weeks of vacation to workers, you might be getting conflicting information and demands from your workers on how to handle and implement this change.

The Ministry clarified: (scroll down to Section 35.2 of the ESA) the extra week only begins to accrue starting after the end of the employee’s fifth vacation entitlement year (“earned during the period for which the vacation is given”) – This means that technically, employees don’t get to take their extra week of vacation until their 7th year of employment, as the sixth year will be spent earning the extra week of time and pay.

Vacation Pay amounts for workers who qualify for three weeks will be 6%, those who get 2 weeks remain at 4%, so any payroll software will need to be updated to begin calculating the new rate for those who qualify. Most software will not automatically make the change. (This also applies to any other wage changes that have or will come into effect from “Bill 148”).

This new law “does not require Employers to provide additional vacation days in respect of vacation entitlement years that ended before that time”. This means that employees only get ONE extra week, no matter how many years they have worked beyond the minimum five, unless your company already offers more.

Beat the rush and get your policy updates done NOW to remain compliant!