‘twas the night before Christmas, where many employees look forward to enjoying several days off of work for the holidays, including Christmas Day, Boxing Day, and New Year’s day. For employees who get these days off, they are entitled to holiday pay under the Employment Standards Act. Employees who (un)fortunately work on holidays are entitled to extra holiday pay, in addition to their regular pay. Here are several important aspects of the holidays that Ontario employees and employers need to know.
Holiday Pay
For employees who get holidays off, they are entitled to holiday pay even though they do not work that day. It is similar to vacation. The formula in calculating holiday pay for these employees is as follows:
all of the regular wages earned by the employee in the four work weeks before the work week with the public holiday plus all of the vacation pay payable to the employee with respect to the four work weeks before the work week with the public holiday, divided by 20.
Employees are not entitled to holiday pay if they fail to work their last shift before the holiday or their first shift immediately after the holiday, without reasonable cause. This is often called the “Last and First Rule.” Reasonable cause means a reason that is beyond an employee’s control.
Premium Pay
For employees who work on a holiday such as Christmas, the employee must be paid 1.5 times their regular wages. It is similar to overtime pay.
Substitute Holiday
If an employee works a holiday, they are allowed to be given a substitute day off, where they would be paid holiday pay. This substitute day off must be taken three months after the holiday. If the employee agrees, the substitute day can be taken within 12 months after the holiday.
Terminated on a Holiday
There is nothing that prevents an employer terminating an employee on Christmas or a holiday. However, there can be certain consequences if the termination is done in bad faith, including a $30,000 award against an employer for lying to an employee and terminating them by sticking a termination letter in the employee’s house back door. Further, some courts have held that an employee will be entitled to a larger severance package, or notice period, when they are terminated at a certain time of the year.
Jason Wong is a Toronto employment lawyer practicing employment, labour, and human rights law. He can be contacted at jason@wongemploymentlaw.com