Confused About Stat Holiday Pay?
One situation that my clients often ask me to clarify for them is to explain how to handle stat holidays and paying their employees and how to figure out what to pay them. So I hope to share how I handle and interpret the Employment Standards Act of Ontario and to make it a little easier to comprehend. There seems to be a lot of confusion with regards to Statutory Holiday Pay if you have employees. Many business owners think back to how they were paid for these holidays when they worked for someone else – which may be quite different from how it is handled today.
The Ontario Labour Board refers to these holidays as Public Holidays and they are as follows: New Year’s Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving, Christmas and Boxing Day.
Please note that the Civic holiday in August is not considered a public holiday and you are not required to pay public holiday pay to your staff. Most employers do offer some kind of compensation to their staff of their own choice, not because they are legally required to do so.
Also please note that there are some industries with different rulings regarding overtime, premium pay, and public holiday pay – please refer to the Employment Standards Act for Ontario to ensure whether your industry has special rulings.
Every employee is entitled to Public Holiday Pay – full-time, part-time, casual, temporary, newly hired – every single employee! Some companies are not aware of these changes in how the statutory holidays are paid. Previous to the Employment Standards Act revised in the year 2000 – which we are still following now – part-time employees were not entitled and any employee still within their probationary period did not have to be paid anything extra.
This new policy has made it fair across the board for all employees – no more part-timers or new hires always stuck working on the holidays because the company doesn’t have to pay them any extra and they don’t lose out on money that other employees would be receiving. Companies no longer have to track for the purpose of calculating statutory holiday pay, who was hired when and when they would qualify – very simply – everyone qualifies.
HOWEVER – the employee MUST work their regularly scheduled shift before and after the public holiday. For example – if the public holiday falls on a Monday and Mary is scheduled to work the Tuesday and Thursday before the holiday and the Wednesday and Friday after the holiday and works all of these shifts then she qualifies to receive public holiday pay. If Mary was to call in sick on the Thursday before the holiday but did work all the other shifts – she would NOT qualify to receive the public holiday pay. If the company cancels Mary’s shift on the Wednesday following – she would still qualify to receive the public holiday pay since it was the company changing her shift.
Also keep in mind that if an employee is required to work on the Public Holiday he/she is entitled to Premium Pay at a rate of 1.5 (time and a half) for their hours works – AS WELL AS – Public Holiday Pay. It is not and either/or situation – they get both. Salaried employees also have to be taken into consideration when calculating Public Holiday pay. General the formula will equate to a full day’s pay if it is being calculated on the regular hours – so salaried employees will still receive their full salary for this day. What the employer must ensure is that they get paid at least what they should be. For example, if a salaried employee gets paid his regular 40 hours but requests an amount for vacation pay to be paid out to him rather than taking the vacation time – this adds to his earnings in that four week period and will change the amount he is owed for Public Holiday Pay. So it is always best to include ALL employees in the calculation, figure out what the Public Holiday pay should be, then determine what the salaried employee earns in one day. If the public holiday pay owing is less than the earnings – paying out the regular salary is fine – BUT if the public holiday pay owing is higher than the earnings would be then this amount must be paid to the employee.
Another aspect that can cause some confusion is how the amount is calculated. Even if you are a full time employee there is no guarantee that you are going to be paid for a full 8 hours of work for the Public Holiday. If you were sick or absent for other reasons for which you were not paid then this is going to adjust the amounts for the calculation. The 4 weeks prior to the Public Holiday need to be examined and totaled – this includes regular only – not overtime and premium pay – then this amount is divided by 20. Once this dollar amount is determined then 4%vacation pay is also added in to this amount. If you are using a computerized program to calculate your payroll you may be able to set it up to calculate the 4% vacation pay on the Public Holiday payroll item.
When looking at the prior 4 weeks – this is not based on calendar weeks – it is based on the employer’s work week and the ending dates of the payroll period. For example, if Christmas Day falls on a Tuesday and that company’s work week runs from Thursday to Wednesday. In this case, the four work weeks used to calculate public holiday pay are those four weeks counting backwards from the first Wednesday (the last day of the employer’s work week) before the day on which the public holiday falls.
So to review – the very basics – Statutory Holiday Pay is the same as Public Holiday Pay, Ontario has nine of these in the calendar year, every employee is entitled to receive Public Holiday Pay, it is based on the prior 4 weeks regular earnings divided by 20 then multiplied by 4%,and remember to include salaried employees. There is a lot more detailed information available at the Employment Standards website – http://www.labour.gov.on.ca/english/es/pubs/guide/publicholidays.php – and please refer to this guide to ensure that you are following the correct rules pertaining to your specific industry.
I hope this assist in explaining how your company should be handling the Public Holidays in Ontario – If you still have questions feel free to contact me.