Ask the ExpertShort-Term Disability Benefits (as salary continuance) Vacationable?
hri_Admin Staff asked 3 years ago

Our short-term disability benefit is paid as a salary continuance payment (employees remain on our payroll while on approved leave).  Are the short-term disability (salary continuance) payments considered vacationable?  Our employees are salaried and accrue paid vacation days (they do not receive vacation pay on each cheque).  We are a national organization with employees in all provinces/territories, so looking for confirmation from all jurisdictions if they would earn paid vacation days while receiving our short-term disability benefits.    

3 Answers
Glenn Demby Staff answered 3 years ago

I directed your Q to our payroll expert, Alan McEwen. Here’s his reply. Hope it helps and feel free to follow up. Glenn
My short answer is yes this time would be vacationable.
Two points to look into further:

  1. Do they literally keep employees on regular salary, while they are off on a leave, i.e. the pay statement says salary not short-term disability?
  2. What does the contract of employment say about the right to vacation during inactive service. If it’s silent on this, then for sure vacationable.
Carly Bjornsson replied 3 years ago

Hi Glenn – the employees are kept on our payroll and the earning code doesn’t change (eg from base salary to short-term disability), however the days are tracked internally (so we could demonstrate the number of days someone was actually on STD to separate base earnings from STD benefit payments. If we made a change to the way the information was displayed on the paystub (and ensured our policy reflected the same terminology, and confirmed vacation does not accrue while on short-term disability), would we have any issues with any ES legislation across Canada?

Glenn Demby Staff answered 3 years ago

Just forwarded your follow-up to Alan. Will let u know when he responds–he’s in BC so it may not be for another few hours.

Glenn Demby Staff answered 3 years ago

Here’s Alan’s response. Hope it helps. Glenn

The question is really what the vacation promise is.
If this is so many days or weeks of paid vacation, accrued based on active service, then there would be no requirement to accrue this time when the person is off on STD.
However, if the promise is vacation pay at some percent, then if the contact of employment includes the provision of STD benefits, then these benefits would be vacationable in Ontario, for example. However, STD benefits would not be vacationable in BC, where the vacation promise is a percent of vacationable earnings.