Statutory Public Holiday Pay

The Christmas holidays are approaching and in Ontario that means that employees may be entitled to statutory holiday pay for the approaching statutory holidays of Christmas Day (December 25), Boxing Day (December 26), and New Year’s Day (January 1). But what makes employees eligible to statutory holiday pay and how much does the employer have to pay?

Eligibility

All Ontario employees are entitled to receive statutory holiday pay including part-time employees and fixed salary employees. However, employees must meet certain criteria under Ontario’s Employment Standards Act, 2000 (the “Act”) to qualify as follows:

Before and After Rule

  1. Employees must work on the last scheduled work day before the statutory holiday. This is the last day the employer scheduled the employee to work. For example, John works four days per week, Monday to Thursday, and the last scheduled work day before Christmas Day is December 22, then if that employee works on December 22, he is entitled to statutory holiday pay for December 25 and 26.
  2. To qualify, the employee must also work on the next scheduled work day after the statutory holiday. Using the same example, John must work on December 28 which is his next scheduled work day.
  3. Failure to work on the “before or after” day without showing reasonable cause for missing the day, results in the employee failing to qualify for statutory holiday pay.

Typical Questions:

  • What if John is on vacation during the week of December 19 to 23?
    • Then the last day that John was scheduled to work was on December 16. As long as John worked on that day and on December 28, he is entitled to statutory holiday pay for Christmas Day and Boxing Day.
  • What if John calls in sick on a “before and after day”?
    • If John can show reasonable cause for missing the day, he remains entitled to statutory holiday pay. Employers should ensure that employees are aware that the “before and after” rule will be enforced and that if an employee calls in sick, he must provide proper medical documentation justifying the absence failing which, he will not be paid statutory holiday pay.

Calculating Statutory Public Holiday Pay

The Act provides how to calculate statutory holiday pay. It is not simply a function of paying the employee whatever pay he would have gotten if he had worked that day. A common misconception is that salaried employees will always be entitled to just receive their regular pay. While that may be the calculation there are circumstances where that will not apply.

The Act provides that you calculate statutory holiday (“stat day”) pay as follows:

                 (4 weeks “earnings” prior to stat day + vacation pay) ÷ 20 = Statutory Holiday Pay

“Earnings” include salary, commissions, and non-discretionary bonuses (i.e. bonuses that are paid as a result of meeting specific and pre-stated incentives).

For example, an employer agrees to Sally taking an unpaid vacation during the week of December 19 to 23. The statutory holiday pay would be calculated as follows:

                $1,000 x 3 weeks (as 1 week is unpaid) + 4% vacation pay = $3,120 ÷ 20 = $156.00

The above calculation results in Sally receiving less than being paid as if she had worked that day ($1,000 ÷ 5 = $200). If the calculation involves including a non-discretionary bonus paid to the Sally at Christmas time, this could result in the employee receiving more than $200 per day. The Ontario Ministry of Labour has a public holiday calculator in its website:  https://www.labour.gov.on.ca/english/es/tools/disclaimer_php.php.

 

*****

Christina J. Wallis is a Partner lawyer practising civil litigation with a focus in Employment Law at Dale & Lessmann LLP, Toronto, Ontario, Canada, a full service business law firm. To speak to Christina please call 416-369-7832 or send an email message to her at mailto:cwallis@dalelessmann.com.