Annual Vacations and Vacation Pay

Most employees are eligible for the following vacation leave entitlements:

• Employees who have worked for more than one year and less than 10 years with the same employer receive three weeks of vacation leave.
• Employees who complete 10 years of work with the same employer receive a minimum of four weeks of annual vacation leave.

An employee is entitled to annual vacation after the completion of each year of employment with an employer. Completing a year of employment means that the employee worked with the same employer for 52 weeks without a break in service of 26 weeks or more. A break may be due to a layoff, termination, resignation, or a similar absence. A job-protected leave such as maternity, adoption, or parental leave would not be considered a break in service, and an employee returning from a job-protected leave is still entitled to take their three- or four-week annual vacation. However, their annual vacation pay may be reduced as it is calculated on the employee’s total wage for the year.

For example, a long-term employee may request an education leave from their employer to upgrade their skills. The employer approves the leave and the employee is absent from work for close to a year. When the employee returns to work, they continue to have four weeks of annual vacation as the time away is not considered a break in service. 

If the same long-term employee quit work to go back to school for a year and was hired back once they were done, the employee would be considered a new employee. Because of the break in service of 26 weeks or more, their vacation entitlements would reset to zero in the first year, and then three weeks after completion of one year of service.

An employee can take one long vacation or several short vacations. Vacation periods should be at least one week long, however, employees and employers can agree to shorter periods. Employees must provide written notice of the length of time that they are requesting for vacation. Vacation must be taken within 12 months of the vacation entitlement date.

Employees and employers should have an agreement on when the annual vacation will be taken. If an agreement cannot be made, the employer can schedule the employee’s vacation. The employer must provide the employee at least four weeks written notice before the employee’s vacation start date.

If a public holiday falls during the employee's annual vacation, the employee's vacation period can be extended by one day.

Cancelling an Employee’s Approved Vacation

If an agreement has been made on when the annual vacation will be taken and an employer cancels or reschedules an employee’s vacation, the employer must pay all non-refundable deposits, penalties, and other pre-paid expenses related to the vacation. The employee must provide receipts for these expenses (e.g., hotel room, airfare, and other expenses).

Vacation Carry-Over

Banking unused vacation days and carrying them over into the next year is not regulated by The Saskatchewan Employment Act. Employers are free to offer terms and conditions of employment that exceed the Act’s requirements including carrying over annual vacation into the next year. There are all kinds of employment arrangements that exceed minimum standards. If an employee does not take vacation leave, then the vacation pay must be paid out within 11 months of the time that the employee became entitled to take a vacation.

Most employees are entitled to vacation pay, no matter what hours they work or how they are paid.

There are two options for paying out annual vacation:

1. Paying employees going on annual vacation; and
2. Paying employees not taking annual vacation within 11 months of the vacation time entitlement.

In some circumstances, employers and employees will agree to have the vacation pay paid on each cheque – although not provided for under the Act, as long as there is a mutual agreement, an employer can pay vacation pay this way. It is important for the employer to maintain good records of the payment and ensure that it is separately identified on the employee’s pay stub. When paying vacation pay on each cheque, it must include all wages including overtime, commissions, etc. and the vacation pay earned during the pay period are used in the calculation.

Example:

Salary for pay period: $1,200.00 
Commission for pay period: $300.00
Total wages: 1,200.00 + 300.00 = $1,500.00
Vacation pay on total wages: $1,500.00 x 3/52 = $86.54
Vacation pay on vacation pay: $86.54 x 3/52 = $5.00
Vacation pay on cheque: $86.54 + $5.00 = $91.54

In this example, vacation pay of $91.54 would be payable on the employee’s pay cheque. It is assumed that the employee will save vacation pay over the course of the year and use the money when going on vacation leave.

1. Paying Employees Going on Annual Vacation

The vacation pay calculation is designed to give employees their average wage while away on annual vacation. As a result, all wages including overtime, commissions, and bonuses are used in the calculation. 

During the first nine years of employment, vacation pay can be calculated by multiplying the employee’s wages for the given 12-month period by 3/52 (approximately 6%). During year 10 and beyond, vacation pay can be calculated by multiplying the employee’s wages for the given 12-month period by 4/52 (approximately 8%).  Vacation can be paid on either the employee’s normal payday or at the employee’s request before going on vacation leave.

For example, an employee is entitled to three weeks of vacation. The 12-month calculation period is May 1 to April 30. The following August, the employee takes three weeks vacation leave. The calculation is:

Salary (May to April): $12,000.00
Commission: $3,000.00
Total Wages: 12,000.00 + 3,000.00 = $15,000.00
Vacation pay on total wages: $15,000.00 x 3/52 = $865.38

In this example, vacation pay of $865.38 would be payable for the August vacation, either on the employee’s normal pay day, or at the employee’s request before going on vacation leave.

2. Paying Employees Not Taking Annual Vacation Within 11 Months of the Vacation Time Entitlement

When an employee does not take vacation, vacation pay is payable within 11 months of the day they became entitled to vacation. Vacation pay can be calculated the same way as above and paid on either the employee’s normal payday or at the employee’s request.

The calculator will help calculate the amount of vacation pay owed to an employee. 

The calculator is based on the following principles:

1. Each anniversary year, an employee is entitled to three weeks of vacation pay. This increases to four weeks after 10 years of service.
2. For those three (or four) weeks entitlement, the employee gets 3/52nds or 4/52nds of their total wages for the 12-month anniversary year as their vacation pay. This amount is paid within 14 days of the employee taking their vacation.
   • An anniversary year means the day of the month the employee started to the same day 12 months later less one day. For example, if an employee started work on February 14, 1998, the individual anniversary date would be February 14, 1998 to February 13, 1999. This anniversary date could also be a common anniversary year, which means that the employer has chosen one common date for all employees (e.g. April 1 to March 31).
   • Where an employee ceases employment before the end of a full year, annual holiday pay is calculated on the accumulated earnings to date. Where an employee starts to work part-way through the year, the employee earns 1.25 days of vacation days per month for that first year. Payment for those days are still based on 3/52nds of the total earnings for those months of work.
3. If the employee takes one week at three different times, the employee receives 1/3 of the total vacation pay owed on each occasion.
4. Total wages includes all salary, overtime, annual holiday pay, public holiday pay, commission, earned bonuses and any other payment for labour or personal services.

Employees who quit or have their employment terminated and do not receive vacation pay each pay period are entitled to payment of any vacation pay that has not been previously paid out, and provided to them on their final cheque. This includes employees who have not yet become eligible to take an annual vacation (i.e., have not yet completed 52 weeks of employment with employer).

Payment must be made within 14 days after the day that the employment ends.

For example, if an employee works two months and then quits, they would be entitled to the following vacation pay:

Salary for two months: $2,400.00
Overtime: $300.00
Total wages: $2,400.00 + $300.00 = $2,700.00
Vacation pay on total wages: $2,700.00 x 3/52 = $155.77

In this example, vacation pay of $155.77 would appear on the employee's final pay cheque.

An employee's annual vacation entitlements are based on years of service with the employer and not on hours worked. As a result, part-time employees who have worked for more than one year and less than 10 years with the same employer receive three weeks' annual vacation leave. Employees who have worked 10 years or more at the same employer get a minimum of four weeks' annual vacation leave.

Vacation pay is based on the employee's total wage for the year. Employees are still entitled to take three or four weeks (based on years of service) of annual vacation leave, and receive vacation pay calculated on their part-time total wages for the year.