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Annual vacations: Do you know your obligations towards your employees?

Vacations are essential to allow employees to “unplug” and recharge their batteries. Managing them, however, can be a real headache for anyone who does not have a good grasp of what is involved. The information outlined below tells you everything you need to know about your rights and obligations in this regard as an employer.

How many vacation days are my employees entitled to?

Vacation entitlements are acquired over a period of 12 consecutive months, known as the reference year. Unless you decide otherwise, the reference year extends from May 1 to April 30. The length of each employee’s vacation depends on the period of his/her uninterrupted service at the end of the reference year.

How much do I have to pay my employees?

The vacation indemnity is a percentage of the pay earned during the reference year. This percentage varies according to each employee’s length of uninterrupted service, in the same way as the length of his/her vacation time off.

Note: If one of your employees has been off work due to illness or maternity/paternity leave, the calculation is more complicated. Call us to find out how to proceed or use the CNESST’s vacation indemnity calculation tool.

 

Number of years of uninterrupted service

Length of vacation

These are continuous weeks and can be split only at the employee’s request.

Indemnity
Less than 1 year1 day per full month of uninterrupted service without exceeding 2 weeks4%
1 year to less than 5 years22 weeks14%
5 years and over23 weeks6%

1 An employee who is entitled to two weeks of vacation has the right to take a third week without pay. You cannot deny such a request. You can, however, refuse to allow this third week to be taken after the first two.

2 Starting January 1, 2019, employees with three or more years of uninterrupted service will be entitled to three weeks of vacation and a 6% indemnity.

Paying the indemnity

According to the Act respecting Labour Standards, the vacation indemnity is made in a single payment when the vacation is taken. The indemnity is paid when the employee actually goes on vacation leave. The Act does not allow employees to receive pay in lieu of vacation.

There is an exception for seasonal workers, who are entitled to receive their vacation indemnity directly with each pay. 

What about part-time staff?

Part-time employees are entitled to vacations of the same length as full-time staff. For example,  an employee who works two days a week and is entitled to two weeks of vacation has the right to be absent from work for two continuous weeks and not just four vacation days.

Who chooses the vacation dates?

As the employer, you have the authority to establish your employees’ vacation dates. You are required to let your employees know these dates at least four weeks in advance. Only in very specific situations does the Act allow for deferral of vacations to another year. It is your responsibility to ensure that your staff take their vacations.

If you let your employees choose their dates, keep in mind that the Act respecting Labour Standards does not specify any rules for determining the priority order. However, the collective agreement or your internal policies might make such a provision – for instance, based on seniority.

A tip from the HR professionals: Provide your company with a policy regarding vacation time off. This will let your employees know what they are entitled to and how to request their vacations. You can contact CFIB or download our template.