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When to pay vacation pay

Question: When employees take vacation, do we have to pay vacation pay at a certain time before the vacation begins or can we pay it on the regular payday that falls while the employee is on vacation?

Answer: The answer depends on the jurisdiction in which the employee works since vacation pay rules are covered by provincial/territorial labour standards laws and the Canada Labour Code for federally regulated workplaces, as the following table shows:

1. Employers that wish to pay vacation pay with each pay must clearly inform employees of this and keep records that show they informed the employees. Employers must also identify vacation pay on the employee’s pay slip and maintain records that show they paid the vacation pay.

2. The employer must clearly show on the employee’s pay statement the amount of the vacation pay it is paying separately from other amounts. Employers may prefer to issue a separate pay statement showing just vacation pay being paid.

3. The requirement to pay vacation pay in a lump sum depends on the provisions of the collective agreement or decree, if any, in place. An exception that requirement applies to farm workers who are hired by the day. Employers may pay their vacation pay with their wages.

4. Employment Standards allows employers to pay vacation pay with each pay if the employer ensures the vacation pay is clearly identified on their pay statement.

Records relating to vacation pay

Question: How long do we have to keep records related to vacation pay?

Answer: Since vacation pay is subject to source deductions for the Canada/Quebec Pension Plan, employment insurance, Quebec Parental Insurance Plan and income tax, the Canada Revenue Agency and Revenu Québec (for employers with Quebec payrolls) require employers to keep records on vacation pay for at least six years from the end of the last tax year to which they apply. Employers may apply for permission to destroy records before that time.

Paying employees on jury duty

Question: Are employers required to pay employees who are off work because they are on jury duty?

Answer: With the exception of Newfoundland and Labrador, Canadian jurisdictions do not require employers to pay employees serving jury duty.

There is, however, in all provinces and territories, an obligation to reinstate the employee to the same position or to a comparable one, with the same wages, seniority and benefits the employee had before going on jury duty.

In Newfoundland and Labrador, the Jury Act, 1991 requires employers to continue to pay employees the same wages and to provide the same benefits as they would have had the employees not been summoned for jury service or to sit as jurors, required to act as witnesses in a criminal or quasi criminal case or required to attend an inquiry under the Summary Proceedings Act or Public Inquiries Act.

Employers that fail to do this will be required to pay the wages and benefits that a court decides it owes and be fined up to $1,000 or, in default of payment, imprisonment of up to three months.