The new year is a meaningful time for companies to conduct an
audit of unused vacation time their employees have accrued over
time.
Under the Ontario Employment Standards Act, 2000 (the
"ESA"), vacation entitlements are
separated into vacation time and vacation pay. The right to
vacation pay under the ESA cannot be waived if an employee elects
not to use their vacation time. Vacation pay is based on gross
wages for the year, including commissions for example, not only
base pay.
Further, if an employer does not have a vacation policy, and an
employee has more time than is set out under the ESA, that time
will continue to accrue and be payable to the employee —
there is no default "use it or lose it" rule.
Employers are mandated by the ESA to maintain records of vacation
for their employees, and an absence of records can be a liability
for a company even if the employee has taken their vacation.
