Did you know there are laws in place governing how much vacation time and paid time off (PTO) employers must give their employees in Canada?
In Canada these requirements vary from province, with all provinces guaranteeing at least two weeks of paid vacation, except Saskatchewan which guarantees three weeks. If you are planning to hire Canadian employees or on taking some time off soon, it's important to know what the requirements are. To help you out, we've put together this comprehensive guide to vacation and PTO requirements in Canada.
Vacation vs. PTO in Canada
Paid time off is a bit different from vacation days in that it includes any time the employee is away from work and still paid, whereas vacation is only one component of PTO. Paid sick days, paid bereavement leave, and vacation days are all a part of PTO.
In some cases, particularly around adoptions and giving birth to a newborn, paid leave is partially covered by the Government of Canada, with companies having the option to supplement pay. For more information, check out our article about How Maternity and Parental Leaves Work in Canada.
The importance of vacation and PTO for employees
Studies have shown that taking regular vacations can have some great benefits for employees. For instance, vacations can:
- Help reduce stress levels and promote relaxation
- Boost energy levels and productivity upon return to work
- Improve mental health and well-being
- Enhance creativity and decision-making skills
- Reinforce work-life balance
Vacation and time away from work helps employees recharge and refocus when they return.
The benefits of vacation and PTO for employers
Paid time off isn't just good for employees - it's also good for employers. Offering employees vacation days and paid time off shows that you value their well-being, which can lead to increased morale and motivation. Additionally, happy employees are often more productive employees, so offering vacation days can lead to a boost in productivity. Finally, offering paid time off can help you to attract and retain top talent and a component of your recruiting strategy.
Minimum required vacation and PTO in Canada
All Canadian employees are entitled to at least two weeks of paid vacation per year. This entitlement is mandated by the various provincial and territorial government and cannot be waived by employees or employers, no matter how small the company is. However, employers can offer more vacation days as an employee benefit. For example, some companies offer three or four weeks of vacation per year, while others offer unlimited vacation days.
Minimum required vacation typically increases with length of service; for example, in Ontario after one year with the same employer, and each subsequent year, employees are entitled to a minimum of two weeks of vacation. After five consecutive years, employees are entitled to a minimum of three weeks of vacation at the end of each year.
For employees who earn hourly wages instead of a salary, employees typically offer vacation pay in lieu of paid vacation time. Each week of vacation time translates to 2% of wages, so 2 weeks of vacation entitlement would be calculated as an additional 4% of wages; 3 weeks of vacation would be 6% of total wages. Most employers pay out vacation pay each pay period, though in most cases they may opt to accrue vacation pay and pay it out when an employee goes on vacation.
For example, if an hourly worker earns $50,000 in a 12-month period, they would be entitled to at least $2,000 in vacation pay ($50,000 x 4% = $2,000). If the employee is paid bi-weekly (26 pay periods in most years), that would be an extra $76.92 of vacation pay each pay period.
While all provinces and territories prescribe minimums for vacation days, minimum required PTO for reasons other than vacation vary from province to province. We have outlined the minimums for each province and territory below. And just like vacation, companies can and often do offer their employees more than the statutory minimums.
Do employees get paid on statutory holidays in Canada?
Like minimum vacation requirements, statutory holidays vary from province to province. The number of paid statutory holidays ranges from 6 to 11 statutory holidays depending on the province. Employees are entitled to take statutory holidays off with pay, regardless of how long they have been with the company.
When a statutory holiday falls on a weekend, employees are generally allowed to take a different regular workday as a holiday. In some cases, employers may ask employees to work on a statutory holiday. In this case, the employee must be given either another day off with pay or be paid 1.5 times their regular wage for that shift.
It's important to note that not all holidays are statutory, and a holiday that is statutory in one province may not be in another province. For example, New Year's Day (January 1st) is a statutory holiday in every province; Remembrance Day (November 11th) is a statutory holiday in all provinces and territories except Manitoba, Ontario, Quebec, and Nova Scotia; St. Patrick's Day is not a statutory holiday in any province or territory in Canada.
If an employee's vacation overlaps with a statutory holiday, that holiday does not count against an employee's vacation entitlement. For example, if New Year's Day were to fall on the Wednesday of a week that an employee was on vacation, that employee would be able to take the following Monday as a vacation as well for a full week of vacation.
Vacation payout on termination
In Canada, employees are entitled to all vacation pay that they have earned but not yet taken at the time of termination. In most cases, this applies even if an employee has not earned their full vacation entitlement.
For example, if an employee has worked for an employer for six months without taking a vacation and is terminated, the employer owes and must pay the employee half their vacation entitlement for the year, or one week of vacation upon termination.
Other vacation and PTO considerations
There are a few other things to keep in mind when it comes to vacation and PTO in Canada.
"Use it or lose it" policies are not legal in Canada. Employees must take their minimum vacation within a certain period after earning it, varying by province. At the same time, employers are not required to pay out vacation that an employee does not use (except upon termination). Employers are generally allowed to schedule an employee's vacation to meet the minimum requirements with sufficient notice to the employee.
In practice however, it is more common and more practical that employees request specific vacation periods and employers agree on vacation time.
Employers are always allowed to offer greater PTO entitlements than the statutory minimums, and in practice, most employers in Canada do. This includes not only vacation days, but various types of paid leave. In addition, companies are allowed to offer entitlements that are more advantageous to employees, such as accruing and using vacation during the year rather than at the end of the year.
Vacation and PTO requirements by province and territory in Canada
Vacation and PTO requirements in Alberta
Employees in Alberta must use their minimum vacation entitlement within 12 months of earning it. Employers can schedule an employee's vacation with 2 weeks' notice.
In addition to vacation, employees in Alberta are entitled to 9 paid statutory holidays per year.
Vacation and PTO requirements in British Columbia
Employees in British Columbia must use their minimum vacation entitlement within 12 months of earning it. Employers can schedule an employee's vacation with 2 weeks' notice. Upon termination, employers must pay out any earned and unused vacation unless the employee has been employed for 5 calendar days or less.
In addition to vacation, employees in British Columbia are entitled to 10 paid statutory holidays, and 5 paid sick days per year.
Vacation and PTO requirements in Manitoba
Employees in Manitoba must use their minimum vacation entitlement within 10 months of earning it. Employers can schedule an employee's vacation with 15 days' notice.
In addition to vacation, employees in Manitoba are entitled to 8 paid statutory holidays per year.
Vacation and PTO requirements in New Brunswick
Employees in New Brunswick must use their minimum vacation entitlement within 10 months of earning it. Employers can schedule an employee's vacation with 1 weeks' notice.
In addition to vacation, employees in New Brunswick are entitled to 8 paid statutory holidays per year.
Vacation and PTO requirements in Newfoundland and Labrador
Employees in Newfoundland and Labrador must use their minimum vacation entitlement within 10 months of earning it. Employers can schedule an employee's vacation with 2 weeks' notice.
In addition to vacation, employees in Newfoundland and Labrador are entitled to 6 paid statutory holidays per year, and 1 day of paid bereavement leave after 30 days of employment.
Vacation and PTO requirements in the Northwest Territories
Employees in the Northwest Territories must use their minimum vacation entitlement within 6 months of earning it.
In addition to vacation, employees in the Northwest Territories are entitled to 11 paid statutory holidays per year, and 5 days of paid family violence leave.
Vacation and PTO requirements in Nova Scotia
Employees in Nova Scotia must use their minimum vacation entitlement within 10 months of earning it. Employers can schedule an employee's vacation with 1 weeks' notice.
In addition to vacation, employees in Nova Scotia are entitled to 6 paid statutory holidays per year, and 3 days of paid domestic violence leave.
Vacation and PTO requirements in Nunavut
In addition to vacation, employees in Nunavut are entitled to 10 paid statutory holidays per year, and 5 days of paid family violence leave.
Vacation and PTO requirements in Ontario
Employees in Ontario must use their minimum vacation entitlement within 10 months of earning it. Employers can and must schedule an employee's vacation to meet this minimum vacation time.
In addition to vacation, employees in Ontario are entitled to 9 paid statutory holidays per year.
Vacation and PTO requirements in Prince Edward Island
Employees in Prince Edward Island must use their minimum vacation entitlement within 4 months of earning it. Employers can schedule an employee's vacation with 1 weeks' notice.
In addition to vacation, employees in Prince Edward Island are entitled to 8 paid statutory holidays per year, 1 day of paid sick leave per year after 5 years of employment, and 3 days of domestic violence leave after 3 months of employment.
Vacation and PTO requirements in Quebec
Employees in Quebec must use their minimum vacation entitlement within 12 months of earning it. Employers can schedule an employee's vacation with 4 weeks' notice.
In addition to vacation, employees in Quebec are entitled to 8 paid statutory holidays per year, 2 days of paid bereavement leave, 1 day of paid leave for an employee's wedding or civil union, 2 days of paid leave for family health or education, and 2 days of paid leave for the birth or adoption of a child.
Vacation and PTO requirements in Saskatchewan
Employees in Saskatchewan must use their minimum vacation entitlement within 12 months of earning it. Employers can schedule an employee's vacation with 4 weeks' notice.
In addition to vacation, employees in Saskatchewan are entitled to 10 paid statutory holidays per year, and 5 days of paid interpersonal violence leave.
Vacation and PTO requirements in the Yukon
In addition to vacation, employees in the Yukon are entitled to 10 paid statutory holidays per year, and 5 days of paid leave for domestic or sexual violence after 90 days of employment.
How Thirdsail can help
You need a competitive and compliant vacation and PTO policy to hire the best employees in Canada. Thirdsail is here to help.
Thirdsail helps companies around the world hire employees in Canada. We let you hire employees instantly without having to open a subsidiary and make sure your employees have access to the right vacation and PTO policies.
Learn more about how we can help you hire in Canada. If you have questions and would like to learn more about hiring employees across borders, get in touch today.
