Paid Vacation

Work hard, play hard. It's not just a phrase

Employees deserve paid time off throughout the year. Whether they are looking to take their annual vacation, or want to switch off from the workplace, they are entitled to a paid vacation leave.

In this guide we’ll discuss what paid vacation leave is, your employee’s entitlements and, how to manage this leave.

What Does Paid Vacation Mean?

The definition of a paid vacation leave is when employees take some time off work. This leave is fully paid and can be used to rest, relax, or take a vacation. It’s also commonly known as annual leave.

Your employees are entitled to paid vacation. As an employer, it’s your responsibility to allow this leave. Failure to do so could lead to legal trouble.

The amount of mandatory vacation is consistent throughout Canada. You’re required to provide your employees with at least two weeks of paid leave in a calendar year. This increases to three weeks after five years of employment. If you refuse to grant your employees their paid vacation entitlements, you can be hit with a heavy fine.

In British Columbia and Ontario, you can be fined up to $10,000 depending on the number of violations. If you are in Alberta, and have committed a level-three offence, you can be fined up to $6000.

Managing Paid Vacation

It’s key that you manage paid vacation days. Not managing your vacation days could leave you with too many employees away at once.

Make sure you have a clear and concise vacation paid time off policy. This should be included in your employee handbook. It should contain the following:

  • How to request paid vacation leave.
  • Vacation pay rules.
  • How vacation leave is accrued.

How do you calculate annual leave accrual?

Accrued time off is the amount of time off an employee has earned over a period for sick, vacation or annual leave, but has not yet used.

In your paid vacation leave policy, you need to include how your employees will accrue annual leave. If your full-time employees receive seven vacation hours per pay period, your part-time staff may only accrue three.

Do you get Paid for Unused Vacation Time?

If an employee has not used their vacation time by the end of their vacation entitlement year, they are still entitled to vacation pay for that accrued time.

As an employer, you can allocate any untaken leave to your employees. This is usually towards the end of the calendar year when annual vacation entitlements end.

Annual Leave Pay After Resignation

If an employee resigns or the employer terminates the employment , the employee must be paid any vacation pay owed.

If your employee hasn’t completed a year in employment, you’re still required to pay the vacation pay for the partially completed current year.

Can an Employer Cancel Annual Leave?

You can cancel an employee’s annual or vacation leave. But you can only do this if they are a non-union worker.

Unions protect your employees’ interests, and if you cancel an employee’s vacation leave – they could make a complaint to the union. This could end in a legal dispute, with compensation having to be paid to the employee.

Whether your employees are part of a union or not, avoid cancelling annual leave as much as possible. Doing so can end leave you with unhappy employees looking for another job.

Get help with your paid vacation leave today with BrightHR

It’s important that you get your vacation leave policy right. Staff have a statutory right to time off. Not managing it can leave you with too many people off at once, unhappy employees, or expensive fines to pay.

If you need help with your absence management, BrightHR has several tools which will make the whole process easier for you.

Our staff vacation planner allows you to manage employee vacations with ease.

Contact us on 1 888 220 4924 or book a demo today.


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