Ask the ExpertBill 148 Vacation
hri_Admin Staff asked 5 years ago

Location: Ontario We have a vacation purchase/sell program under which employees can opt to buy an additional week of vacation, or sell back an unused week of vacation, each at 2%. The new legislation prescribes that after 5 years of service, vacation entitlement is increased to 3 weeks / 6%. If an employee who has 5+ years of service and is already at 3 weeks vacation, opts to sell back one week of vacation, effectively bringing the employee down to 2 weeks of vacation time (but still meets the statutory minimum of vacation pay), would this be in compliance with the legislation?

1 Answers
Glenn Demby Staff answered 5 years ago

NOTICE: THIS IS A REVISED ANSWER TO ONE I POSTED ABOUT 2 HOURS AGO: IF YOU READ THE PREVIOUS ANSWER (which I have since deleted), DO NOT RELY ON IT AS I BELIEVE IT WAS INCORRECT. USE THE ANSWER THAT APPEARS BELOW INSTEAD:

My answer would be that an employer must provide a minimum of 3 weeks of vacation time to an employee who hits the 5-year service mark, under the new section 33(1)(b). This is a minimum requirement that can’t be waived under the Act, even if the employee agrees, see section 5(1).

As far as vacation pay goes, if an employee agrees to “sell” back the extra 2% difference between 2 and 3 weeks of vacation, that would have to be treated as “vacation pay” to remain compliant with the new amendments. In other words, the minimum 6% would have to be paid, or the same amount paid as 4% vacation pay and then 2% “sold” back to the company. In these circumstances, what would the point be of “selling” back the 2%?

Alan McEwen & Associates PO Box 144 Station Main Qualicum Beach, BC  V9K 1S7 250-228-5280 (Pacific time)

http://www.alanrmcewen.com

 

Thx for the Q and Merry Xmas
Glenn 203 354-4532