Canadian Employment Law Today

Canadian HR Reporter, 2020 March 25, 2020 | Canadian Employment Law Today before the end of that period — and can't require the employee to take the vacation by an earlier date, say, through limits on vaca- tion carryover. However, Ontario's ESA specifically per- mits employers to require employees to take vacation time at any time of the employer's choosing. For example, under the ESA, em- ployers could require all of their employees to take their statutory vacation entitlement at the exact same period every year. While employers generally don't exercise that right given the potential negative impact on mo - rale and the organization's employer brand, doing so is legally permitted. This also means that employers can require their employees to take their vacation entitlement in the year it is earned. They don't have to allow em - ployees to take vacation time that accrues in a given vacation entitlement year until 10 months after the end of that year. Although employers must ensure vacation is taken by that time, they can require that the vacation be taken sooner. It's also very common for employers to provide vacation pay to hourly and part-time employees on every pay as it accrues, whereas salaried employees more commonly receive vacation pay when they take the correspond - ing vacation time. This is allowed under the ESA, as long as the employee agrees in writ- ing to be paid accrued vacation pay in each pay period. Many employers believe that since they pay part-time and hourly employees vacation pay in every pay period, those employees are not entitled to vacation time. They believe that as long as they are paying out the vacation pay, they're satisfying their vacation-related obligations to those employees. However, this is another misconception. Part-time and hourly employees are entitled to vacation time, just as salaried employees are. The only difference is that employees who agree to re - ceive vacation pay as it accrues are not paid when they take their vacation time, since it is paid throughout the year — they instead take their vacation time unpaid. It's worth noting that some employees who receive vacation pay in each pay period won't want to take their vacation time. Some, such as those living "paycheque to paycheque," may feel they can't afford to take unpaid va - cation time at all. However, the employer is nonetheless required under the ESA to en- sure that employees use their entitlement, regardless of whether the employee wants to or not. That is unless they and the employee agree to go through the burdensome admin- istrative process of applying to the Director of Employment Standards for approval for the employee not to take their vacation time. When it comes to managing vacation time and pay, employers should be proactive in re - viewing their policies and procedures to en- sure full legislative compliance. They should also ensure that those policies align with the operational requirements of their business model, while still appealing to the talent they need to attract to remain competitive and grow. It's a relatively simple step that helps limit risk and avoids the threat of both legal chal - lenges and administrative penalties. The employer is required to ensure employees use their vacation entitlement, whether the employee wants to or not. ABOUT THE AUTHOR Joel Smith Joel Smith is a lawyer with Williams HR Law in Markham, Ont., where he practises management-side labour, employment and human rights law. He can be reached at (905) 205-0496 ext. 224 or jsmith@ williamshrlaw.com. CREDIT: ANYABERKUT ISTOCK

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