Ontario celebrates a variety of public holidays throughout the year. The intricacies of public holiday pay in Ontario can leave even seasoned employers scratching their heads. This guide aims to simplify the process, offering crystal-clear explanations and practical tips to ensure both your payroll practices and employee relations remain smooth.
Public Holidays in Ontario
Ontario celebrates nine official public holidays throughout the year, from New Year’s Day to Boxing Day:
- New Year’s Day
- Family Day
- Good Friday
- Victoria Day
- Canada Day
- Labour Day
- Thanksgiving Day
- Christmas Day
- Boxing Day (December 26)
Here’s a list of all statutory holidays for both federally regulated and provincially regulated employers in Canada.
Although certain employers may opt to provide their employees with an additional day off on occasions such as Easter Sunday, Easter Monday, the first Monday in August, or Remembrance Day, the employer is not required to do so under the ESA.
Most employees who are eligible are entitled to take these days off work and receive pay for the public holiday. However, certain conditions and agreements may alter these entitlements.
Entitlements for Employees
1. Taking the Holiday Off
If an employee qualifies for public holiday entitlement, they can choose to take the day off and receive public holiday pay.
2. Working on the Holiday
Alternatively, employees can agree to work on the holiday and receive:
- Public holiday pay plus premium pay (time and a half their regular wage) for all hours worked, or
- Regular wages for all hours worked plus a substitute holiday with public holiday pay.
Substitute Holiday
Instead of paying holiday pay, employers can offer employees a substitute working day off which must be:
- Within 3 months of the holiday (or within 12 months with written agreement).
- Paid at their regular rate.
- Specified in a written agreement (the exact replacement date) and consented to by the employee.
- The agreement must be provided to the employee prior to the date of the public holiday and must include the date that the statement was provided to the employee.
Determining Public Holiday Pay
The calculation of public holiday pay is crucial for ensuring employees receive their entitled compensation. The formula for holiday pay can seem complex, but it boils down to this:
Regular wages earned in the 4 weeks prior to the holiday + vacation pay earned in the 4 weeks prior to the holiday, divided by 20.
Click here to view examples of holiday pay calculations.
Regular wages do not include overtime pay, vacation pay, premium pay, and other specific types of compensation.
Key Points to Remember:
- Vacation pay is part of the calculations: If you already include vacation pay in regular wages, don’t double-count it.
- Overtime and bonuses are excluded: Only consider regular/base wages for the calculation.
- Time and a half for work performed: If an employee agrees to work on a holiday, they must be paid 1.5 times their regular pay for all hours worked on top of their holiday pay.
Last and First Rule
Employees qualify for public holiday entitlement unless they fail, without reasonable cause, to work all of their last regularly scheduled day before the holiday or their first regularly scheduled day after the holiday.
Additional Considerations
Special Rules for Certain Industries: Some industries have specific rules regarding public holidays, such as hotels, hospitals, and continuous operations. These rules may include different entitlements or requirements for employees in these sectors.
Collective Agreements: If you have a unionized workforce, their collective agreement might supersede the Employment Standards Act regarding holiday pay if it offers a greater benefit.
Termination of Employment
If an employee’s job ends before they can take a substitute holiday, their public holiday pay must be paid along with their final wages, regardless of the reason for the termination.
Important Resources:
- Ontario Ministry of Labour: https://www.ontario.ca/document/your-guide-employment-standards-act-0/public-holidays
- Employment Standards Act: https://www.ontario.ca/document/your-guide-employment-standards-act-0
- ES Self-Service Tool: https://www.apps.labour.gov.on.ca/es-self-service-tool/
Understanding public holiday pay entitlements is crucial for both employers and employees in Ontario. Adhering to the regulations outlined in the ESA ensures fair treatment and compensation for all parties involved. By familiarizing themselves with these rules, employers can ensure compliance, while employees can ensure they receive their entitled benefits for public holidays. Failing to comply with holiday pay regulations can result in penalties and fines. Ensure you have accurate records of employee hours and wages to verify proper holiday pay calculations.