As the holiday season approaches, we’ve been asked by our clients and partners how to properly manage their workplace rules that apply to situations of Public (or Statutory) holidays, and which rules apply to holiday time and holiday pay in Ontario. One of my partners asked me why the banks are closed on Mondays following a Public holiday, while other businesses are not. This question forms a part of a bigger issue – how do businesses manage Public holidays that fall on weekends or other non-working days.
Well, as with almost every other rule and law in Canada, the situation is not simple and solutions are vary between the provinces and the federal employment laws. Today, I will attempt to simplify the situation and provide a through and comprehensive explanation to employers and employees on how to approach this issue and how to comply with the rules in Ontario.
The initial rule is simple – Ontario has 9 Statutory (or Public) holidays:
- New Year’s Day
- Family Day
- Good Friday
- Victoria Day
- Canada Day
- Labour Day
- Thanksgiving Day
- Christmas Day
- Boxing Day (December 26)
Most employees who qualify are entitled to take these days off work and be paid public holiday pay (see explanation of the Ministry of Labour here: https://www.labour.gov.on.ca/english/es/pubs/guide/publicholidays.php).
So actually, there are separate components of a statutory holiday – a component of day off work and a component of a Public holiday pay for the day off.
Those employees who take Public holiday as a day off work are entitled for the Public holiday pay. The public holiday pay is equal to the regular pay to which the employee would be entitled for a regular working day (more detailed calculation of the holiday pay you can find on the Ministry of Labour website). The most important point here, is that those employees who took their day off work during the public holiday are not entitled to any additional premiums or benefits in addition to their regular pay for that day.
Some employers can agree in writing with an employee to work on the holiday. In most professions, this working day will entitle such employee for an additional premium – if you work during your day off, you should be paid an additional benefit. The law in Ontario provides employees with a choice of benefit for their work during Public holiday:
- An employee may agree in writing to receive a Public holiday pay plus premium pay for the hours worked on the public holiday. In this case, the employee will not be entitled to additional day off, but will be compensated with extra pay. The premium in Ontario is equal to 150% of the employee’s regular pay paid in addition to the employee’s regular pay. As a result, such employee will receive a total of 250% of pay for working on Public holiday and will not be entitled for any additional day off.
- An employee may agree in writing to take their regular rate for hours worked on the holiday, plus they will receive another day off (called a “Substitute” holiday ) for which a public holiday pay (again – equal to employee’s regular pay) will be paid. The rules applicable to the substitute holiday situation (when and how to take) are discussed below.
The major problem and misunderstanding arises in connection with the Substitute Holiday. As the name suggests, this is another day off for the Public holiday that falls on a day off work, such as weekend. An employee in Ontario is entitled to receive a Substitute Holiday in two different situations:
- When the Public Holiday falls on the day-off (usually weekend). In this situation the Public Holiday does not move to the first working day (usually Monday)!!! Instead, an employee is entitled to take any other day off during three months following the Public Holiday – this day is called “Substitute Holiday”, for which an employee will be entitled to receive the Holiday Pay as explained above.
- When an employee is required to work on a Public Holiday, and decides to take another day off, as explained above – in this case, an employee will be entitled to a Substitute Holiday.
Proper understanding of the rules applicable to various situations of statutory holidays is important not only from the perspective of correct calculation of the holiday pay, but also from the point of view of the compliant and organized employer. The law requires that most of the choices of an employee be in writing, such as the choice of an employee to receive statutory premium pay instead of the substitute holiday. These requirements are being audited by the ministry of labour and every employer must prove that such consent was given in writing. At CBES, we will prepare a proper set of policies and corresponding forms, which will allow not only proper understanding of the rules, but also a proper record keeping for your future use.
“Wait, but all this long explanation still didn’t explain why the banks don’t work on Monday following the statutory holiday” my friend asked. Correct. The answer is actually pretty simple – all banks in Canada are governed by the Federal labour law, and the rules applicable there are different. In accordance with the Federal labour law, substitute holiday is given to employees on the day immediately succeeding or preceding the statutory holiday, which falls on the day off. This difference further emphasizes the importance of proper understanding of the legal and administrative environment of each and every business and putting proper compliance structure in place.