Province's new Employment Standards Act takes effect June 30

HR teams in Prince Edward Island have just over two weeks to rewrite their leave, scheduling and termination policies before the province's new Employment Standards Act (ESA) comes into force on June 30 — the most significant overhaul of Island employment law in nearly two decades.

The provincial government says the new Act modernizes the rights and obligations of both employers and employees. It stems from an independent Comprehensive Review Panel whose two-year review produced a final report with 110 recommendations; rather than amend the existing law, the province passed an entirely new Act in the legislature in fall 2024.

"Modernizing and clarifying the rules for both employers and employees is an important way government can support fair and balanced workplaces," said Zack Bell, Minister of Workforce and Advanced Learning. The changes mark one of the most significant updates to employment standards in years, he said.

Expanded leave and sick-day rules

The headline change for HR is a new entitlement to up to 27 weeks of unpaid, job-protected medical leave for treatment of or recovery from an illness or injury, organ or tissue donation, gender-affirming care, or other approved medical procedures.

"There are already enough worries that come with a cancer diagnosis, wondering if you'll have a job to return to shouldn't be one of them," said Canadian Cancer Society senior manager of advocacy and strategic initiatives Heather Mulligan, who praised the province for bringing the protection into force.

Unpaid sick leave rises to four days a year from three, after 30 days of service. Employers may request a sick note only when a worker is absent for five or more consecutive days, and a broader range of licensed health professionals can now issue them. The sick-leave provisions also extend to unionized employees, and a new Citizenship Ceremony Leave grants one unpaid day off after 90 days of employment.

Recently, for the second time in two years, Prince Edward Island's governing Progressive Conservatives voted down a private member's bill that would have prohibited employers from requiring sick notes from absent workers.

Hours, termination and enforcement

The maximum work week drops to 44 hours from 48 in P.E.I., though not for all industries, and overtime may be averaged over a two- to four-week period by written agreement. Employers must provide work schedules at least one week in advance and give at least eight hours of rest between shifts, except in limited circumstances.

Termination notice now applies after 90 days of work, rather than the previous six-month threshold. Group layoffs of at least 10 employees who make up 25 per cent or more of the workforce within a two-month period require six weeks' notice to affected staff, any union representing them and the provincial government.

Enforcement also tightens. The window to file a complaint with the Employment Standards Branch doubles to two years from one, and inspectors are now empowered to fine employers who break the rules. The province says information sessions are available for employers wanting to learn more; they can contact the Department of Workforce and Advanced Learning at [email protected].

P.E.I.’s minimum wage rose to $17.00 per hour on April 1, up from $16.50, and the province has confirmed two further increases: to $17.30 on October 1 and to $17.60 on April 1, 2027. 

Professor Jim Sentance, from the Universtiy of Prince Edward Island welcomed the development, saying that the new act "does improve things a fair bit, bringing us closer to national standards" even though "those standards aren't necessarily generous."

"Medical and sick leave requirements have been improved, and though not overly generous are fairly comparable now to other jurisdictions. One exception would be still requiring sick notes which in public policy terms is a waste of resources. Hours of work and overtime pay have been improved but we were so far behind on hours of work that that still leaves us as laggards. Most provinces have a standard 40 hour week and define a standard work day as 8 hours. There are also exceptions to the rules that have caused some concerns," he said in an email to Canadian HR Reporter.

"We now have termination provisions for group situations, which was another area we lagged significantly, so good to see."