What every payroll professional needs to know for the busy holiday season
Holidays may come as welcome relief to employees but, for payroll professionals, it can usher in a flurry of activity. As a period of several holidays swiftly approaches on the calendar, it is worthwhile to brush up on the basics to make sure there are no last minute surprises.
Every jurisdiction in Canada outlines a number of statutory holidays and mandates certain employee privileges accordingly. Employees that meet the qualifying requirements are entitled to have the time off with pay, or payment of a premium rate if they are required to work.
Although there are significant regional differences in holiday pay legislative requirements, there are general themes that exist throughout many jurisdictions. It is critical to understand the regional exceptions and differences when looking at a specific application, but a discussion on these common threads is an important first step.
There are five main categories of holiday pay eligibility. With few exceptions, qualification for holiday pay would include length of service, obligation to work on the holiday if required, obligation to work on the working day preceding/following the holiday, the requirement to have earned wages for a number of days in the period preceding the holiday or any specific work arrangements such as casual employment.
Length of service: Many jurisdictions require an employee to have been employed for a minimum period of time before they are eligible for holiday pay.
Obligation to work on the holiday if required: More than one-half of the Canadian jurisdictions have a requirement for the employee to actually work on the day if requested to do so. Unless there is reasonable cause, an employee would not receive holiday pay if they do not show up for work on a holiday when requested to do so.
Obligation to work on the working day preceding/following the holiday: Many Canadian jurisdictions do not require employers to extend holiday pay to employees who fail to work the day preceding or following a holiday when regularly scheduled to do so.
This is a commonly misinterpreted requirement as many employers miss the point, which is a failure to work when scheduled to do so. Only an employee who fails to work without reasonable cause on a scheduled preceding or following day would be subject to this requirement.
Requirement to have earned wages for a number of days in the period preceding the holiday: This is a less “common” thread as several jurisdictions have unique criteria, while other have none. Generally, those jurisdictions without this category require employees to have wages in a minimum number of days in a period preceding the holiday.
Several jurisdictions have eased off this requirement in recent years. For example, the federal jurisdiction has relaxed to provide pro-rated holiday pay for employees that did not have the opportunity to meet the wage requirement due to their employment contract.
Specific work arrangements, casual employment: This is also a less common thread but in New Brunswick, Ontario and Prince Edward Island, employees who choose not to work when requested to do so, are not entitled to holiday pay.
Once it is established an employee actually meets the requirements for holiday pay, the next step is confirming the amount of compensation they are entitled to.
Pay for holidays not worked
Generally, an employee given a day off on a holiday will receive pay if it is the employee’s regular day of work, but the level or formula of their pay entitlement varies depending on the jurisdiction.
An eligible employee may receive a regular day’s pay, public holiday pay, general holiday pay or an average day’s pay. Most jurisdictions now use the average day formula and define the number of weeks to include in the calculation. Alberta uses the nine-week period preceding the holiday to determine the average wage applicable for an employee. This is a rather specific calculation and either the procedures or data used to calculate this should be confirmed prior to the holiday period.
A systems and procedure review is a good idea to ensure the small details are captured and accurate for this holiday season.
Pay for holidays worked
For those employees required to work on the holiday, the quantification part of the process works differently. The general rule is eligible employees required to work on a holiday receive their regular wage plus time-and-a-half for those hours worked. Although this calculation in relatively straightforward, it has some implications for other areas of the payroll process.
Jurisdictions have different requirements when it comes to the calculation of overtime, so make sure to check the rules and regulations for each specific jurisdiction where the company has employees.
Even for the seasoned payroll professional, holidays can present complex issues as jurisdictional differences enter the equation.
Taking a moment to ensure the processes, procedures and information systems are accurate and up to date is important heading into a season of holidays.
Shawn Ewasiuk is a partner at Qube Consulting in Edmonton. He can be reached at (780) 463-2688 or [email protected]
Every jurisdiction in Canada outlines a number of statutory holidays and mandates certain employee privileges accordingly. Employees that meet the qualifying requirements are entitled to have the time off with pay, or payment of a premium rate if they are required to work.
Although there are significant regional differences in holiday pay legislative requirements, there are general themes that exist throughout many jurisdictions. It is critical to understand the regional exceptions and differences when looking at a specific application, but a discussion on these common threads is an important first step.
There are five main categories of holiday pay eligibility. With few exceptions, qualification for holiday pay would include length of service, obligation to work on the holiday if required, obligation to work on the working day preceding/following the holiday, the requirement to have earned wages for a number of days in the period preceding the holiday or any specific work arrangements such as casual employment.
Length of service: Many jurisdictions require an employee to have been employed for a minimum period of time before they are eligible for holiday pay.
Obligation to work on the holiday if required: More than one-half of the Canadian jurisdictions have a requirement for the employee to actually work on the day if requested to do so. Unless there is reasonable cause, an employee would not receive holiday pay if they do not show up for work on a holiday when requested to do so.
Obligation to work on the working day preceding/following the holiday: Many Canadian jurisdictions do not require employers to extend holiday pay to employees who fail to work the day preceding or following a holiday when regularly scheduled to do so.
This is a commonly misinterpreted requirement as many employers miss the point, which is a failure to work when scheduled to do so. Only an employee who fails to work without reasonable cause on a scheduled preceding or following day would be subject to this requirement.
Requirement to have earned wages for a number of days in the period preceding the holiday: This is a less “common” thread as several jurisdictions have unique criteria, while other have none. Generally, those jurisdictions without this category require employees to have wages in a minimum number of days in a period preceding the holiday.
Several jurisdictions have eased off this requirement in recent years. For example, the federal jurisdiction has relaxed to provide pro-rated holiday pay for employees that did not have the opportunity to meet the wage requirement due to their employment contract.
Specific work arrangements, casual employment: This is also a less common thread but in New Brunswick, Ontario and Prince Edward Island, employees who choose not to work when requested to do so, are not entitled to holiday pay.
Once it is established an employee actually meets the requirements for holiday pay, the next step is confirming the amount of compensation they are entitled to.
Pay for holidays not worked
Generally, an employee given a day off on a holiday will receive pay if it is the employee’s regular day of work, but the level or formula of their pay entitlement varies depending on the jurisdiction.
An eligible employee may receive a regular day’s pay, public holiday pay, general holiday pay or an average day’s pay. Most jurisdictions now use the average day formula and define the number of weeks to include in the calculation. Alberta uses the nine-week period preceding the holiday to determine the average wage applicable for an employee. This is a rather specific calculation and either the procedures or data used to calculate this should be confirmed prior to the holiday period.
A systems and procedure review is a good idea to ensure the small details are captured and accurate for this holiday season.
Pay for holidays worked
For those employees required to work on the holiday, the quantification part of the process works differently. The general rule is eligible employees required to work on a holiday receive their regular wage plus time-and-a-half for those hours worked. Although this calculation in relatively straightforward, it has some implications for other areas of the payroll process.
Jurisdictions have different requirements when it comes to the calculation of overtime, so make sure to check the rules and regulations for each specific jurisdiction where the company has employees.
Even for the seasoned payroll professional, holidays can present complex issues as jurisdictional differences enter the equation.
Taking a moment to ensure the processes, procedures and information systems are accurate and up to date is important heading into a season of holidays.
Shawn Ewasiuk is a partner at Qube Consulting in Edmonton. He can be reached at (780) 463-2688 or [email protected]
