Unlimited PTO Policy & Maternity Leave

[NAHR@spectraforce.com]

#94990

Forum: Private

Hi there!

I had a question/scenario for your team.

Scenario:
-Company offers Unlimited PTO to Canada employees (all inclusive of vacation, sick time, etc.) and all stat holidays paid.
-Employee, in Ontario, is taking one year off for maternity leave.
-Company supplements/tops up EI benefits to ensure employees receive 100% of weekly base salary for 13 weeks during leave period.

Questions:
-Is the employee entitled to be paid for stat holidays that occur while on leave?
-With an unlimited PTO policy, does the employee technically accrue sick time while on leave?
-With an unlimited PTO policy, does the employee technically accrue vacation time while on leave?

Thank you!

[Haley O’Halloran]

#94991

Hi there! Let’s go through these questions one by one:

1. Is the employee entitled to be paid for statutory holidays that occur while on leave?
No. Under Ontario’s Employment Standards Act (ESA), employees on an unpaid statutory leave of absence (such as maternity leave) are not entitled to statutory holiday pay. Since the employee is on maternity leave and not actively working, they do not meet the requirement of having earned wages in the four workweeks before the holiday, which is typically required for statutory holiday pay eligibility.

2. With an unlimited PTO policy, does the employee technically accrue sick time while on leave?
This depends on the company’s internal policies and whether “unlimited PTO” includes accrual tracking for sick time.
In Ontario, employers are required to provide a minimum of three unpaid sick days per year under the ESA (if the company does not already provide a more generous policy).
If the company does not track sick time accrual under its unlimited PTO policy, there may be no technical “accrual” of sick days during maternity leave.
If the company does track or imply accrual, it would need to clarify whether employees continue accruing PTO (including sick time) during leaves.

3. With an unlimited PTO policy, does the employee technically accrue vacation time while on leave?
Yes, but only in terms of vacation pay.
Under Ontario’s ESA, vacation time does not accrue during statutory leaves, but vacation pay does accrue if it is based on a percentage of earnings. Since the employee is on maternity leave and receiving only 13 weeks of top-up (but otherwise unpaid), their vacation pay accrual would be limited to the earnings during those 13 weeks.
If the company’s unlimited PTO policy does not use a vacation accrual system, then there may not be any formal accrual at all, and instead, vacation is granted at the company’s discretion once the employee returns.

Let me know if you have any more questions!

-HRInsider Staff

[NAHR@spectraforce.com]

#95037

Thank you so much for the prompt response!!

[Author]

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