Calculating holiday pay for Canada Day

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Canada Day is fast approaching but employers might not realize that recent amendments to the Canada Labour Code have impacted the way general holiday pay is calculated.

“These changes remove the requirement that an employee work at least 15 days in the 30 day period prior to the holiday,” explains labour lawyer David Foster. “Under the new provisions, all employees are entitled to holiday pay if they have completed 30 days' service with the employer.”

The changes apply to federally-regulated industries such as aeronautics, banking, broadcasting, interprovincial transportation, railway, shipping, telecommunications, and federal Crown corporations.

“In light of these changes, employees with irregular work weeks who had not previously qualified for general holiday pay, such as part-time, temporary, or casual employees, may now be entitled to paid holidays,” adds Foster.

Calculating pay

The Norton Rose Fulbright lawyer offered the following in-depth explanation:

·         Employees are generally to be provided with at least 1/20th of their total earnings in the four-week period immediately before the week in which the general holiday occurs (excluding overtime pay).

·         However, employees who are paid on a commission basis – whether in whole or in part – who have been employed for more than 12 weeks are to be provided with at least 1/60th of their total earnings in the 12-week period immediately before the week in which the general holiday occurs (including commissions, but excluding overtime pay).

·         Commission-based employees who have been employed less than 12 weeks are provided with at least 1/20th of their total earnings in the four-week period immediately before the week in which the general holiday occurs (including commissions, but excluding overtime pay).

Foster also reminded employers that special rules apply for continuous operations and the long-shoring industry which will affect the calculation.

“Employers would be wise to review their policies, practices, and, if applicable, collective agreements, to ensure that they are compliant with these new requirements,” Foster concluded.  “While employers can still choose to provide a greater right or benefit, they must not fall below these new statutory minimums.”

Read Foster’s full article here.

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