Ask the ExpertCategory: QuestionsVacation pay vs. vacation days
hri_Admin Staff asked 1 year ago

Province: BC
Our employment agreement currently indict employee getting 15 days of paid vacation (pro-rated) for 1st calendar year of their employment, there is no mention of the vacation pay %. 
We are giving the ability to utilize their vacation days before their accrue and we also accrue vacation pay at 6% vacationable earnings on a bi-weekly basis
so when a employee take vacation time off; we just pay them their standard regular salary for those days and deduct this amount from their vacation pay pool.

  1. Once a EE has used up all their entitlement for the year, do we still need to continue to accrue vacation pay even though they have used up their vacation day entitlement as listed in the employment contract? 
  2. As per your article: 
    1. if we want to move to Method 2 at our workplace; how would that work for us? 
1 Answers
Glenn Demby Staff answered 1 year ago

From our payroll expert, Alan McEwan:

  1. Yes, there should be an accrual on all earnings, even on the regular pay while on vacation, as at the year-end, it’s still necessary to test whether what was paid is at least what has been accrued on vacationable earnings. This particularly affects employees who get exception pay, such as commissions or overtime, that are vacationable.
  2. Not sure really what is being asked. But if you wanted to credit employees with 15 vacation days at the start of each year, when they take vacation time, you reduce both the regular hours and the credited vacation hours, by the vacation time taken. You would still need to ensure that the actual dollars made met the provincial minimums.

Glenn again here: We’ll try to be faster the next time. Thanks for your patience.

Jaspreet mann replied 1 year ago

Hi Glenn, Thank you for your response. Just some follow-up clarification:

1. Since we are paying the EE’s 15 days (above the ESA in BC – only 10 days) – do we still need to accrue vacationable earnings?

2. For example – I get my full 15 days at beginning of the year (which is above ESA) – when I take them I will just be paid my regular wages for those days. Since it’s 15 days or 6% is above 4% can we only do the accrual based on time earned and not vacationable earnings?