submitted by the PEI Employment Standards Branch
A paid vacation allows an employee to take an annual break from their work. Paid vacation includes vacation pay and the time away from work.
How to qualify
An employee is entitled to an annual vacation after working continuously for 12 months with the same employer. Once the employee has worked for 12 months, the employer has four months after that to provide a paid vacation to the employee. This four-month period can be extended if the parties agree.
How much time off for vacation
An employee is entitled to an annual vacation of at least two weeks if employed continuously with the same employer for eight years or less. Employees are entitled to a third week of annual vacation if they work continuously for more than eight years with the same employer.
Calculation of vacation pay
An employer accrues vacation pay earned by an employee and then pays it to the employee for the vacation. Pay for a two-week vacation is based on four per cent of an employee’s total income earned over the previous 12 months; a three-week vacation is based on six per cent of the employee’s total income earned over the same period.
For example, an employee with four years of continuous employment who is paid $25,000 each year will receive two weeks of annual vacation and $1,000 in vacation pay ($25,000 x 4 per cent). An employee with 10 years of continuous employment who is paid $35,000 each year will receive three weeks of annual vacation and $2,100 in vacation pay ($35,000 x 6 per cent).
Vacation pay and part-time, year-round employees
There can be circumstances when an employee who works year-round and on a part-time basis can refuse vacation time but still get vacation pay by providing written notice to an employer before the end of the employee’s 12-month period of employment.
A part-time employee is someone who works for less than 90 per cent of their normal working hours. Once the employer receives the written notice, they must pay the vacation pay to the employee no later than one month after the end of the employee’s 12-month period.
Vacation pay and seasonal / short-term employees
Seasonal or short-term employees are entitled to vacation pay but not vacation time. As a result, these employees can get vacation pay either on their pays or as a lump sum at the end of their employment. A seasonal or short-term employee can get vacation pay on their pays as long as the employee has agreed; the employer’s pay records show vacation pay was paid on the employee’s pays, and the pay statements show vacation pay is being paid on each pay.
Vacation and paid holidays / vacation and paid sick days
On occasion, a paid (statutory) holiday such as Canada Day or Labour Day can occur on an employee’s paid vacation. If this happens and as long as the employee is entitled to the paid holiday, the employee’s vacation is extended by an extra day. On the other hand, pay to an employee for sick leave is not considered to be pay for vacation or pay in lieu of vacation.
This article provides only general information. Details about paid vacation or any other provision of the Prince Edward Island Employment Standards Act and Regulations can be obtained by contacting the Employment Standards Branch.
Phone: 902-368-5550 or toll free: 1-800-333-4362
Visit www.peiemploymentstandards.com for more information.
The Branch is located at Sherwood Business Centre, second floor, 161 St. Peter’s Road, Charlottetown.