Vacation Pay: What Are Employees Entitled to?

By: Sean O’Donnell

These blog posts are meant to provide educational content and are not to be taken as legal advice.


With the introduction of Bill 148, Fair Workplaces, Better Jobs Act, 2017, the laws in Ontario surrounding vacation pay were changed effective January 1, 2018. Your employer is responsible for ensuring that you receive the appropriate amount of time off and vacation pay in accordance with the current legislation. Your employer must meet the minimum standards set out by the Employment Standards Act, 2000 (the “ESA”). As an employee, it is a good idea to educate yourself as to your rights, so you can ensure that your employer is meeting those minimum standards. 

Paid Vacation Time

Bill 148 increased the amount of paid vacation time given to employees. The amount of vacation time you are entitled to depends on how many years you have been with the company. Employees with less than five years of service are entitled to two weeks per 12-month period, while employees with over five years are now entitled to three weeks.

The 12-month period begins on your date of hire, although your employer can alter it to suit an alternate calendar. In doing so, they must prorate the vacation time preceding the start of the alternate 12-month period. For example, if your employer’s vacation year runs from January-December, and you were hired in May, your employer will have to give you a prorated amount of vacation from May-December to compensate for what is called a “stub period”.

Vacation Pay

Your vacation pay is also set out in the ESA, and is based on years of service. For those with less than five years of service, you are entitled to 4% of your gross pay per 12-month vacation year, and the preceding stub period, if there was one. Employees with more than five years of service saw an increase in their vacation pay with implementation of Bill 148- you are now entitled to 6% of your gross pay per 12-month vacation year.

These are the minimums set out and your employer is free to increase these as they see fit. However, if they try to offer you less than you are entitled to, it is important that you speak up.

Important Notes

  • You are only entitled to take paid vacation time off after completing 12-months of service
  • You must take your vacation within 10-months after completing your 12-months or stub period
  • If you are terminated within 12-months of service, your vacation pay is still owed to you and must be paid out within 7 days of your termination or on your next pay day 
  • Vacation time continues to accrue during maternity and paternity leaves
  • Your employer must schedule your vacation time in blocks, either one-week blocks two or three times, depending on years of service, or in two or three-week blocks, depending on years of service. 
  • You may request shorter periods of time off to your employer, in writing
  • With some exceptions, most times your vacation pay must be paid to you before you take the time off

Knowing your rights makes it hard for employers to take advantage of you. If your rights are being violated, don’t be afraid to speak up or contact the professionals at SJO Legal for help.