Are employees allowed to waive their vacation entitlement?
Question: Are employees allowed to waive their vacation entitlement?
Answer: The answer depends on the jurisdiction in which the employee works since vacation time and pay are governed by each province and territory’s employment/labour standards legislation.
Canada Labour Code: Employees may postpone or waive their entitlement to an annual vacation for a specified year of employment if the employee and the employer agree in writing the employee may do so. The employer must still pay the employee the vacation pay for that year within 10 months of the employee becoming entitled to it.
Employees who are taking a reservist leave may postpone their vacation until their leave is over.
Alberta: The Employment Standards Code does not allow employees to waive vacation time.
British Columbia: The Employment Standards Act does not allow the waiving of vacation entitlements.
Manitoba: There are no provisions in the Employment Standards Code allowing employees to waive vacation entitlements. Employees taking a leave of absence covered under the code may postpone their vacation.
Employers are advised to contact the Employment Standards office for information on specific situations.
New Brunswick: This issue is not in the Employment Standards Act. Employers are advised to contact the Employment Standards office for information on specific situations.
Newfoundland and Labrador: The Labour Standards Act does not address this issue. Labour Standards does note that an employer may cancel an employee’s already-approved vacation, but the employer must compensate the employee for reasonable expenses that he or she cannot recover. Employers are advised to contact the Employment Standards office for information.
Northwest Territories: Under the Employment Standards Act, employees are generally not allowed to waive their vacation entitlement. However, in “exceptional circumstances,” the legislation does allow it. There are three ways to obtain permission to waive or postpone vacation entitlement:
1) An employer and an employee may apply to the Employment Standards Officer for permission for the employee to waive the vacation for a specific year. In the application, they must identify the exceptional circumstances that require the employee to forgo the vacation. The application must also include a copy of the employee’s proposed waiver. If the waiver is approved, the employer must still pay the employee his or her vacation pay no later than six months after the year of employment to which it applies or the date specified in the application, whichever comes first.
2) An employer and an employee may file a written agreement with the Employment Standards Officer stating that they agree to postpone the employee’s vacation (or a part of it) for a specified year. The agreement must include a statement that both the employer and the employee agree to the vacation being postponed. The paid vacation is added to the following year’s vacation entitlement.
3) An employee may apply on her own to the Employment Standards Officer for permission to have the vacation (or a part of it) postponed to the following year if the employer will not agree to it. In the application, the employee must explain why this is necessary. The employee must also include a statement that he or she requested the postponement but that the employer rejected it. If the application is approved, the Employment Standards Office can require the employer to postpone the vacation to the following year of employment.
Nova Scotia: Under the Labour Standards Code, employees who work full-time are not allowed to waive their vacation entitlement. Employees who work less than 90 per cent of the regular working hours in any continuous 12-month period may opt not to take a vacation leave. In this case, the employer must pay the employee four per cent or six per cent (as applicable) of vacationable earnings not later than one month after the 12-month period ends. The employee must request this option in writing; the employer cannot require it.
Nunavut: Under the Labour Standards Act, employees are generally not allowed to waive their vacation entitlement. However, in “exceptional circumstances”, the legislation does allow it. There are three ways to obtain permission to waive or postpone vacation entitlement:
1) An employer and an employee may apply to the Labour Standards Officer for permission for the employee to waive the vacation for a specified year. In the application, they must identify the exceptional circumstances that require the employee to forgo the vacation. The application must also include a copy of the employee’s proposed waiver. If the waiver is approved, the employer must still pay the employee the vacation pay to which she is entitled within 10 months after the year of employment to which it applies.
2) An employer and an employee may file a written agreement with the Labour Standards Officer stating that they agree to postpone the employee’s vacation (or a part of it) for a specified year.
3) An employee may apply on his or her own to the Labour Standards Officer for permission to have the vacation (or a part of it) postponed to the following year. In the application, the employee must explain why this is necessary.
Ontario: Under the Employment Standards Act, an employee may waive his or her entitlement to a vacation (or part of it) if the employer agrees and the director of Employment Standards approves it. Even if the employee waives the right to a vacation, the employer is still obligated to pay the employee vacation pay.
Employees taking a leave of absence covered under the act may postpone their vacation until the leave ends or until a later date (if their employer agrees). This applies even if the employee has an employment contract that prohibits or restricts the deferring of vacations.
Prince Edward Island: The Employment Standards Act does not allow full-time employees to waive their entitlement to a vacation. Employees who work less than 90 per cent of the regular working hours in any continuous 12-month period may opt not to take vacation, but be paid vacation pay. Employees who wish to do this must advise their employer in writing before the end of the 12-month period. Employers must pay the vacation pay to them no later than one month after the end of the 12-month period.
Quebec: Under the Act respecting labour standards, vacation entitlement may not be waived, unless there is a special provision in a collective agreement or decree allowing it. Employees who work for a business that closes for two weeks for the annual vacation, the employee is entitled to three weeks’ vacation. These employees may request that their employer waive their third week of vacation and pay them the vacation pay owing.
Employees taking a leave of absence under the act may request that their employer postpone their vacation to the following year. Employers are not required to do so. If the employer does not allow the request, the employer must immediately pay the employee the vacation pay owing to the employee.
Saskatchewan: The Labour Standards Act allows employers and employees to enter into a written agreement to waive the employee’s vacation because of a shortage of labour. The agreement must be filed with the Director of Labour Standards. The employer must still pay the employee vacation pay within 12 months of the employee becoming entitled to the vacation.
Yukon: Under the Employment Standards Act, employers and employees may enter into written agreements whereby an employee may elect not to take an annual vacation. However, the employer must still pay the employee the vacation pay he or she is owed within 10 months of the employee becoming entitled to the vacation.
Employees who are taking a reservist leave may postpone their vacation until their leave is over.
Annie Chong is manager of the payroll consulting group at Carswell, a Thomson Reuters business, which publishes the Canadian Payroll Manual and operates the Carswell Payroll Hotline.
