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Summer = Vacation: But Remember This!

By July 25, 2018June 27th, 2023Employment Law

It’s July! It’s summertime! And don’t we know it – temperatures were soaring this month.

Summer is also the time that many employers and employees take vacation.  So let’s review some common points to remember about vacation in Ontario.

Vacation is BOTH time and pay

There is a difference between vacation time and vacation pay.

Vacation pay is a standard (and mandatory) benefit under the Employment Standards Act (the ESA).  Employees who are entitled to vacation start earning this vacation pay as soon as they start working for an employer.

Vacation time off is something that is earned by the employee as a result of being paid vacation pay in the previous year.  Under the ESA, an employee earns their vacation on a rolling basis for the upcoming year.

So, for example, you hire an employee on January 1, 2018. Your standard vacation year is January 1 to December 31.  The new employee is paid 4% vacation pay in all of 2018. In 2019, that employee may take their 2 weeks of time off because they earned it (and were paid for it) in 2018.

An employee must have completed 5 years of service to receive 3 weeks vacation

As we told you in this blog post, employees must already have completed 5 years of service in order to receive this new standard benefit under the ESA. Think of it as a 5-year award.

So, remember, starting in an employee’s 6th year of work, the law says that employee will receive at least 3 weeks of vacation. Double check your team lists and info!

Employers can determine when vacation is taken

Yes, this is true! The Employment Standards Act specifically states at section 35 that “the employer shall determine when an employee shall take his or her vacation…”  As well, the ESA says that employers should give their employees 2 consecutive weeks off OR two blocks of 1 consecutive week – unless the employee consents to another setup.

Just don’t force an employee to take less than one week of vacation at a time.  One full week? Sure.  A couple days, don’t force it.

If you wish to shut down the practice for one entire week this summer, you may do so without violating any laws.  Just make sure you give your employees as much advance notice as possible before doing so, make sure this will not violate your office policy, and make sure to pay your employees the vacation pay to which they are entitled.

Technically, new employees do not receive vacation time in their first year of employment

At section 33 of the ESA, Ontario employees are technically not entitled to vacation time until they have worked for 12 consecutive months.  This is because employees earn their vacation in the previous year, and then can take their (already paid) vacation in the next year.

However, many employers provide their employees with paid time off every year, including in their first year of employment as a benefit to the employee.

But technically speaking, an employer does not need to give their new employee 2 weeks of vacation (or pay them any vacation pay) until the start of the second year of employment.

Vacation time may be unpaid

Some dental offices bank their employees’ vacation pay and then pay that banked vacation pay when the employee takes vacation time. But there is nothing in the law that says vacation must be paid time away from work. If a dental office wanted, it could pay the vacation pay on each pay cheque and then require the dental team member to take the vacation time as unpaid time away from work.

But if vacation is paid this way (or any way, frankly), remember that the vacation pay agreement should be in writing and clear (like in a full employment contract).

Additionally, if an employee and employer agree for the employee to take more than the allotted time for vacation, the employee could request and receive further unpaid vacation time.

At the same time, a “use-it-or-lose-it” vacation policy is completely legal.  Dental offices are permitted to have valid office policies that state if an employee does not use their vacation time before a specified period, that time is lost and cannot be carried forward.  But don’t forget, vacation pay cannot be withheld, and any banked or accrued vacation pay must be paid at the

All employees earn vacation

Our employment lawyers hear from dentists sometimes that “they are part-time and so they do not get any vacation.” That could not be further from the truth!

All employees in Ontario are entitled to vacation with pay – but the amount can vary between employees.

Independent Contractors are not entitled to vacation

The Employment Standards Act applies only to employees and does not apply to independent or dependent contractors. What this means is that there is no specific legal right for an independent contractor to earn vacation time or vacation pay.

We frequently see vacation in Associate Agreements or Contractor Agreements and have a little chuckle.  Vacation usually implies paid time off, and that is only for employees! That is not to say that contractors cannot take any time away from work: they can! But it should be clarified in an agreement with that worker.

Let us know if you have any vacation related questions – we would be happy to help.

The Content of this post is provided for informational purposes only. It is not intended to be legal, financial, tax, or other professional advice of any kind. You are advised to contact DMC (or other counsel) to seek specific legal advice concerning your individual situation.