Navigating statutory holiday pay can be tricky for employers, especially with the specific rules and calculations required under Ontario’s Employment Standards Act (ESA). However, it's crucial to stay compliant and ensure your employees are compensated fairly and correctly on statutory holidays. In this post, we'll break down requirements for statutory holiday pay in Ontario so you can meet your obligations with confidence.
Definitions:
Public holiday
Also known as a “stat holiday”, a public holiday is a day designated by the provincial government where most workers are given a day off with pay. These holidays are meant to celebrate or commemorate important cultural, historical, or religious events.
Premium Pay
Pay rate of 1.5x the employee’s regular hourly rate
Public Holiday Pay
The compensation an employee is entitled to receive if they are eligible to take time off on a public holiday
The formula to calculate public holiday pay in Ontario is:
Regular wages earned by the employee in the four weeks prior to the week with the public holiday + all vacation pay payable with respect to the four weeks before the work week with the public holiday ÷ 20
Substitute holiday
An alternate day off that an employee can take if they work on a public holiday
What are employees entitled to in Ontario?
Any time there is a provincially legislated public holiday in Ontario, eligible employees are entitled to one of following:
1. If the employee gets the day off work, the employee…
Receives public holiday pay
2. If the employee works on the public holiday, the employee receives either…
Premium pay for all hours worked on the public holiday and public holiday pay, or;
Regular wages for all hours worked on the public holiday and a substitute holiday with public holiday pay
In other words…
This means that each time there is a public holiday, all eligible employees in Ontario are entitled to:
Public Holiday Pay and;
One of the following:
Pay at time and a half for all hours worked on the holiday**
The holiday as a day off work
A substitute holiday
While the timing of when the above entitlements are received is situation-dependant, the crucial point is that each time there is a stat holiday, your organization has these obligations to each eligible employee.
**Note: The employee must agree to this option in writing as a record that they have waived their option to take a day off work for the public holiday.
What holidays are considered public holidays in Ontario?
The Ontario ESA stipulates the following nine public holidays:
New Year's Day
Family Day
Good Friday
Victoria Day
Canada Day
Labour Day
Thanksgiving Day
Christmas Day
Boxing Day (December 26)
Additionally, many employers also treat the Civic Holiday (first Friday in August) and National Truth and Reconciliation Day (September 30) like public holidays, but this is not mandatory.
What are the eligibility requirements for public holidays in Ontario?
Most employees who are eligible under the ESA are entitled to statutory holiday pay in Ontario unless:
They have failed without reasonable cause to work all of their last regularly scheduled shift before the holiday or all of their first regularly scheduled shift after the holiday (this is called the “last and first rule”)
They were required to or agreed to work on the public holiday and have subsequently refused to work their entire shift on the holiday
In this case, they are still entitled to premium pay for hours worked on the public holiday, but not to an additional paid day off
Note: While most employees are covered by the ESA, there are specific employment categories which are either not covered or have special rules that apply to them. Some examples are health care, transportation, and hospitality services. If you are usure if your employees are covered by the ESA, you can find out more via the Government of Ontario’s website here.
What do public holidays look like for salaried employees?
If a salaried employee gets the day off work for the public holiday, they receive public holiday pay
If a salaried employee works on the holiday, they will receive either:
Premium pay (i.e., pay at 1.5x their regular hourly rate) for all hours worked on the holiday + public holiday pay, but no days off**
Regular wages for working on the public holiday + a substitute holiday where the employee receives public holiday pay
**This must be agreed to in writing.
What do public holidays look like for hourly employees?
Technically speaking, the rules are exactly the same as for hourly employees as they are for salaried employees.
If an hourly employee gets the day off work for the public holiday, they receive public holiday pay
If an hourly employee works on the holiday, they will receive either:
Premium pay (i.e., 1.5x their regular rate) for all hours worked on the public holiday + public holiday pay, but no days off**
Regular wages for all hours worked on the holiday + a substitute holiday for which they receive public holiday pay
**This must be agreed to in writing.
However, the rules can be a bit more confusing when applied to hourly employees with varying schedules due to both fluctuations in their hours and the possibility that the holiday will fall on a non-working day.
Scenarios:
What if the public holiday falls on a day my hourly employee doesn’t normally work? For example, if the holiday falls on a Monday, but my employee works Tuesday-Friday.
In this case, you should give your employee a substitute holiday with public holiday pay. You also have the option to provide public holiday pay without providing a substitute day off, but the employee must agree to this in writing.
If my hourly employee would normally be scheduled to work on a public holiday and are provided the day off work, may I give them give lieu time to use on a later date instead of paying public holiday pay?
Technically speaking, yes. However, this is not quite as straight forward as it seems because:
You should be careful to ensure that amount of paid time off they receive is of equal or higher monetary value in comparison to what their public holiday pay would have been
You must carefully track the employee’s entitlement and have record of providing them the paid lieu time off of work
It is more administratively straightforward to pay the public holiday pay in the pay period that the public holiday falls in.
Conclusion:
Public holiday pay doesn’t have to be complicated, as long as you know the requirements and how to apply them. By understanding time off and pay entitlements for public holidays, you can make sure that your team is paid fairly and that your organization stays compliant. Taking the time to get it right not only helps you avoid issues down the road, but also shows your employees that you value their time and contributions. Here’s to keeping your payroll compliant and your employees happy - one stat holiday at a time.
Additional Resources:
Your Guide to the Employment Standards Act – Public Holidays
This tip sheet was created by the Young Associates team based on the best information available to us as of the date of posting.
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Founded in 1993, Young Associates provides bookkeeping and financial management services in the charitable sector, with a focus on arts and culture. Young Associates also provides consulting services in the areas of data management, business planning and strategic planning. Heather Young published Finance for the Arts in Canada, a textbook and self-study guide on accounting and financial management for not-for-profit arts organizations.
