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‘Twas the payday after christmas*: An employer’s (rhyming) guide to the joys of public holiday pay

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*With inspiration from (and apologies to) Clement Clarke Moore, and his classic ‘Twas the Night Before Christmas.

‘Tho the basics of holiday pay are well-known,

The details of compliance are oft met with a groan.

But for managers, for supervisors, for HR and for pay-roll,

Meeting the statutory requirements is always the main-goal.

So with Christmas, Boxing Day and New Year’s just finished,

‘Tis the season for a reminder of obligations undiminished.

And so with a view to providing a brief New Year’s guide to employers’ obligations under the Ontario Employment Standards Act, 2000 (the “ESA”), this summary outlines general principles and describes the four (4) basic scenarios in which holiday pay is payable under the statute.

Scenario #1 (Holiday Ordinarily a Working Day/ Employee Does Not Work)

The most familiar application of the ESA holiday pay provisions is to the situation in which (a) the holiday falls on a day that would ordinarily be a working day, (b) the employee is given the day off, (c) the employee is not caught by an exemption, and is not otherwise disqualified from receiving holiday pay, and (d) the employer pays the holiday pay to the employee.  Essentially, the public holiday is a paid day off.

Even in that straightforward scenario, however, there are a number of details for employers to consider based on the following General Principles, i.e.:

  • Although most employees in Ontario have entitlements under the holiday pay provisions, a regulation to the ESA identifies a number of exemptions (including, for example: taxi drivers, certain seasonal workers, and certain salespeople and professionals/ practitioners);
  • In addition, a worker who is not caught by one of the exemptions may nonetheless be disqualified from receiving holiday pay “if he or she fails, without reasonable cause, to work all of his or her last regularly scheduled day of work before the public holiday or all of his or her first regularly scheduled day of work after the public holiday”; and
  • Public holiday pay is determined by first adding up “the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred”, and by then dividing that amount by 20.

Scenario #2 (Holiday Not Ordinarily a Working Day/ Employee Does Not Work)

If a public holiday falls on a day that an eligible employee would not ordinarily be scheduled to work (e.g. a Saturday or Sunday in the case of a Monday – Friday worker) or on a day that the employee is on vacation, s/he will still receive the benefit of the public holiday.

In that situation, the employer is required to either (a) provide the employee with a “substitute” holiday on another date that s/he otherwise would have been scheduled to work, and provide holiday pay for that substitute date;  OR (b) with the employee’s agreement, simply pay holiday pay for the actual public holiday.

Scenario #3 (Holiday Ordinarily a Working Day/ Employee Required to Work)

Although most employees cannot be compelled to work on public holidays, that is not so for workers in hospitals, hotels, motels, tourist resorts, restaurants, taverns and continuous “24/7” operations—in those settings, an employer can insist that an employee work on a public holiday if the holiday falls on a day that would ordinarily be a working day for him or her.

In that situation, the employer is required to either (a) pay the employee his/her regular wages for the hours worked on the public holiday AND provide the employee with a “substitute” holiday on another date that s/he otherwise would have been scheduled to work, and provide holiday pay for that substitute date; OR (b) at the employer’s discretion, pay the employee at least 1 ½ times his/her regular wages for the hours worked on the public holiday AND pay the employee public holiday pay for the day.

Scenario #4 (Employee Works Voluntarily)

Whereas the circumstances in which an employee can be required to work on a public holiday are quite narrow, an employee’s prerogative to volunteer for available work on a public holiday is (subject to statutory limits on maximum hours of work) largely unfettered.

If an employee and employer agree that the employee will work on a public holiday (regardless of whether the public holiday ordinarily would or would not have been a working day for the employee), the employer is required to either (a) pay the employee his/her regular wages for the hours worked on the public holiday AND provide the employee with a “substitute” holiday on another date that s/he otherwise would have been scheduled to work, and provide holiday pay for that substitute date; OR (b) with the employee’s agreement, pay the employee at least 1 ½ times his/her regular wages for the hours worked on the public holiday AND pay the employee public holiday pay for the day.

* * * * *

Significantly, the scenarios described above are subject to further caveats and complications in relation to the timeframes during which “substitute” holidays must be taken, and based on the question of whether an employee who works on a public holiday actually performs the work that is expected of him or her on that date.  Moreover, employees’ statutory entitlements in those scenarios can be modified by more generous arrangements that may be prescribed by contract and/or the employers’ policies.

All told, compliance with the holiday pay provisions of the ESA can be an exercise in which “the devil is in the details”.

But fear not, dear readers, for assistance stands ready,

Just a phone-call away is legal advice right and steady.

So if you have questions or problems or worries,

Seek out some advice before flakes turn to flurries.

And with hope that you’ve enjoyed this verse in some way,

Happy New Year to all, and to all a good day!

Jason Beeho