Vacation Policy – Use it or Lose it

[Louise Bonneau]

#91960

Forum: Community

I read the previous (Ask the Expert) query and response on this question – however, have a further question: does the guidance apply to vacation days that are given which are greater than what ESA provides? As an example, when the ESA in Ontario says you get 2 weeks, and an employer gives 4 weeks, a use it or lose it can apply to the 3rd & 4th weeks. Is that valid?

[vickyp]

#91961

No, in Canada you cannot nullify any vacation pay as the year cycle overs – time can be lost, but pay cannot. If at the end of the year an employee still has banked money, because they are at a 6% or higher allocation, then that money cannot be vacated – you either need to pay it out or roll it over. You can however, have a policy that the time is lost if you pay out the money.

Here is an example to illustrate:

Steve has 6 weeks’ vacation a year. Every 2 weeks of vacation is 4% accrual, so Steve is at a 12% accrual. At the end of the year, Steve has only taken 3 weeks’ vacation, but you do not allow time to roll-over each year. It was too busy with business demands, so Steve could never take his vacation and the business supported this. At the end of the year, Steve is owed the 6% accrued money still in his vacation accrual as a payout.

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