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4 facts you should know about vacation pay

DBM Law Blog

It seems straightforward: you get a job and expect paid vacation to go along with it. But the rules and the law around vacation and vacation pay can be among the most confusing aspects of employment.

Below are the four most commonly asked questions about vacation pay and our Coles notes response:

  1. How much vacation am I entitled to?

According to the Employment Standards Act, you are entitled to two weeks of vacation AFTER you have been working with a company for one full year. So, starting in the second year, you can take the vacation that you earned in the year before. After five years, you are entitled to three weeks vacation. You are not entitled to any vacation in the first 12 months of employment, but you do earn vacation pay.

Employers are allowed to tell you when you can take your vacation, but they must be schedule in at least one-week segments. Your employer cannot make you take your vacation one day at a time scattered over 12 months.

  1. How does vacation pay work?

According to the Employment Standards Act, your employer pays you a percentage of your wages as vacation pay. For the first 5 years, the percentage is 4%. After 5 years, it rises to 6%. Since, technically, you do not receive wages during your vacation, it is this vacation pay that gives you your paid vacation.

If you are a salaried employee and continue to receive your salary while on vacation, the BC Employment Standards Branch counts that as your vacation pay as long as it is at least 4% of your gross earnings for the first five years, and 6% for years after that.

  1. When do I get my vacation pay?

You must receive your vacation pay at least seven days before you take your vacation, or on your regular payday. You can also have it added on to your paychecks throughout the previous year, but you and your employer must have a written agreement in place to do this. If you leave or are let go from the company, you must receive all outstanding vacation pay that you have earned but not used on your last paycheck.

  1. Can I not go on vacation and just take the vacation pay?

The law requires employers to make sure that employees take their yearly vacation and receive vacation pay. If for some reason you do not use all of your vacation days, your employer may cut you a cheque at the end of the year for the remainder of the pay owed to you, or may allow you to carry over your vacation days to the following year. It is important to look at your employment contract or policy to confirm which option your company chooses to handle unused vacation days.

There are some misconceptions about vacations and vacation pay among employees, and sometimes employers, too. If you think you have not received everything you are entitled to, either while still working or upon termination, DBM recommends that you contact a an employment lawyer to better understand what you are entitled to. It’s extremely important to know what your rights and your obligations are.




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