In Canada, generally employers are required to pay employees for certain holidays even when they don’t work on those days.
This is called statutory pay.
But understanding how this pay works can be confusing, especially for small business owners or employees new to the Canadian workforce.
This blog will guide you through everything you need to know about statutory pay, including the legal definition, how it is calculated, and why it’s important to get it right.
So whether you are hiring your first employee or trying to understand your entitlements, this guide will help clarify the ins and outs of statutory pay.
Table of Contents
Understanding the Statutory Holiday Meaning
Generally, the statutory holiday meaning refers to certain public holidays that have been recognized by the government. Now in this case, these public holidays are the days when employees get a legal entitlement of a paid day off.
Ideally, each province and territory has its own list of statutory holidays and understanding the meaning of statutory holiday in detail and depth helps both the employer and the employee know their rights in line with holidays through the year.
Who Gets Statutory Pay?
It is very important to understand that not every employee in Canada is entitled to statutory holiday pay. Ideally, to quality, employees must work their scheduled shift right before and after the public holiday.
Moreover, the employee also needs to be employed for a minimum period as defined by the province’s law which can further vary from province to province.
For instance, in Ontario Canada, an employee must have worked at least 12 of the 30 days leading up to the statutory holiday to be eligible. Always remember that it is very important for both the employer and the employee to understand all of the conditions to avoid any confusion or possible disputes in future.
Quick Tip:
Your statutory holiday pay depends on whether you are full-time, part-time, or on a compressed schedule. Make sure you understand how your status affects your eligibility.Source: Link
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How Is Holiday Pay Calculated?
The calculation for holiday pay generally varies from province to province. The method for However, a general formula used in many provinces is:
Average daily earnings over a specific period before the holiday.
For example, in Ontario, statutory pay is calculated by taking the total earnings over the past four weeks and dividing it by the number of days worked.
Below is a comparison of how this works across a few provinces in Canada:
You also need to make sure to check the local employment standards of your province, as rules may differ.
Common Misunderstandings About What Is Statutory Holiday Pay
People often confuse regular holiday pay with statutory holiday pay.
Generally, statutory holiday pay means a paid leave for a public holiday. Here, vacation or bonus days are not covered under this pay.
The best part? If an employee works on a statutory holiday, they are often entitled to 1.5x or 2x times more than their average regular pay, and this as well varies from province to province.
Another common misunderstanding or myth is that part-time workers generally don’t qualify for statutory holiday pay, however, a lot of provinces ensure they do just as long as the eligibility criteria are met.
Understanding the truth behind these misconceptions is key to avoiding any payroll related mistakes and ensuring fair treatment among all employees!
Legal Guidelines Around Statutory Pay
As mentioned earlier, each province has its own laws, those that vary from province to province and which clearly outline how employers must handle statutory pay. These laws ideally define the minimum requirements that need to be met.
For instance, in Quebec, the law states that even if the holiday falls on a day the employee doesn’t normally work, they may still be entitled to the pay.
Undoubtedly, it is very important for businesses to abide by the rules of their respective province to avoid any legal issues. And this is exactly where hiring the right payroll partner like Orbit Accountants becomes beyond important.
Here, at Orbit Accountants, we have been providing expert payroll management, accounting, and bookkeeping services in Canada. We understand how difficult payroll and statutory compliance can be, especially with different laws and variation across provinces.
So irrespective of whether you are a small business owner or a full-grown team, our team of professionals helps you stay aligned by the laws stated at all times. Book a free consultation today!
In Essence,
Knowing the statutory holiday meaning and understanding what is statutory holiday pay is one of the most important aspects for both the employers and the employees in Canada. From knowing how is holiday pay calculated to staying by the set laws of the province, it is all about being informed and prepared well in time.
Remember that statutory pay may seem like a small part of payroll, but it carries legal and financial implications. Whether you are an employer trying to stay compliant or an employee seeking clarity about your entitlements, understanding how statutory pay works is beyond important.
Remember that, as employment laws continue to change across Canada, staying up to date time and again can be overwhelming and difficult, especially for small businesses that already wear many hats.
That is why it is very important to work with professionals who know and understand the ins and outs of statutory pay and compliance.
Let Orbit Accountants help you build that legally compliant and confident business!
Frequently Asked Questions
What is statutory pay in Canada?
Statutory pay in Canada generally refers to the money received by the employee for recognized public holidays by the government. It ensures employees are paid for the holiday even if they do not work on that day. The rules around statutory pay from province to province.
How is statutory pay calculated in Canada?
The method for how is holiday pay calculated generally varies. Generally, a majority of the provinces use the method that calculates the average daily earnings over a set period right before the public holiday.
What types of statutory pay are available to employees?
The types of statutory pay include paid days off on public holidays recognized by the government and extra pay if the employee works on those days. This extra pay may include 1.5x or 2x times more regular wages depending on the province.
Are there different rules for statutory pay in Canada and the US?
Yes, there are differences. In Canada, statutory pay is mandated by law across provinces. In the US, there is no federal requirement for holiday pay, making the meaning of statutory holiday unique to Canada.
