December 16, 2016
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?
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:
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.
Tags: Employment