Currently, employees covered by the Employment Standards Act, 2000 (ESA) are entitled to at least two weeks of vacation time after completing 12 continuous months of employment (whether active or inactive). Vacation pay is addressed separately from vacation time, and employees are currently entitled to at least 4% of their wages as vacation pay. These are statutory minimums and many employers provide employees with greater vacation entitlements.
Unlike in employment standards legislation in many other Canadian jurisdictions, under the ESA an employee’s vacation entitlements do not increase beyond two weeks 4% of wages no matter how long the employee has been employed by their employer.
It looks like that is about to change.
Under Bill 148, employees with five or more years of continuous service with their employer would become entitled to three weeks of vacation time and 6% of wages as vacation pay. If Bill 148 is passed into law, these changes to vacation time and vacation pay will come into force on January 1, 2018.
Given the likelihood of this change to the ESA, there are a number of things Ontario employers should consider doing before January 1, 2018:
- Review existing policies and any template contract language relating to employee vacation entitlements to see what, if anything, would need to be changed if the proposed legislation comes into effect.
- Determine which employees may be impacted by this change if it comes into effect and how the change will be communicated to them.
- Consider the impact of increased vacation time for employees on business operations and the bottom-line, and consider what coverage arrangements may need to be in place.
Bill 148 passed First Reading on June 1, 2017 and, in an expedited process, was referred to the Special Committee on Finance and Economic Affairs the same day. The Special Committee has since posted a Notice of Public Hearings on Bill 148 to be held:
- the week of July 10, 2017 in Thunder Bay, North Bay, Ottawa, Kingston, and Windsor-Essex. Those planning to make an oral presentation in any of these locations must provide their name and contact information to Committee Clerk by 10:00am on July 4, 2017; and
- the week of July 17, 2017 in London, Kitchener-Waterloo, Niagara, Hamilton, and Toronto. Those planning to make an oral presentation in any of these locations must provide their name and contact information to Committee Clerk by 10:00am on July 10, 2017.
Alternatively, written submissions may be sent to the Special Committee by 5:30 pm on July 21, 2017.
This gives employers and other stakeholders a final chance to have their voices heard on the Bill 148 amendments.
If you have questions or concerns about these or any of the Bill 148 amendments to Ontario’s labour and employment laws do not hesitate to contact the Norton Rose Fulbright Canada Labour and Employment Team.