Canadian Employers need help with Vacationable Earnings

by | Apr 1, 2021

Knowledge Share by Adam Noble, PayTech Project Manager – Canada

Vacationable Earnings requirements are frequently being overlooked and often missed within large and small Canadian organisations.

Vacationable Earnings are earnings on which vacation pay is calculated, pursuant to employment/labour standards. These earnings typically include regular earnings, overtime, shift premium pay, public holiday pay, commissions and bonuses related to hours of work, production or efficiency.

Unfortunately, it differs between provinces as what is considered as Vacationable Earnings and the percentage that must be paid on those earnings.  The risk of Employers looking the other way is becoming greater as Employees become more savvy, and have more access to information.

In the past, I personally have helped a number of businesses correct their errors.  Not only Vacationable Earnings, but also to ensure compliance with the amount of Vacation Time that the Employee should have received.

In one instance, a leading US based organisation was expanding into the Canadian market and had engaged a team of PayTech Consultants to help with the acquisition of new businesses and onboarding onto an existing Canadian payroll platform. After our initial review of the existing payrolls in play, we were able to advise the client of their risk of unpaid vacation. By breaking out the variances by Provincial Rulings we helped the new owner recover significant costs from the seller of the original business.

This made for a happy PayTech client because we were able to reduce risk, reduce costs, and improved the morale of the workforce after they received the correction in pay. Once again, PayTech’s Trusted Advisors were there to be the Payroll Hero.

The article below goes into some issues that have occurred around this topic.
CBC: Canadian banks, insurance firms owe $1.2B in employee vacation pay, class actions allege

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