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Level 2

Vaction Pay Entitlement for Employee rejoining

Hi, 

One of my client's employees was terminated this March 2020 after 10 years of service and ROE was issued. Now after 3 months my client has asked her to join back. I have entered her rejoining date on QBO standard payroll. She was entitled earlier for 6% Vacation Pay. Now that there was a break in her employment and ROE issued will her Vacation Pay entitlement be 6% or 4% legally? 

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Best answer July 10, 2020

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Level 6

Vaction Pay Entitlement for Employee rejoining

Hi Suean:

 

Depends upon your jurisdiction.

I'm in Ontario, and under these circumstances, the provincially mandated vacation is 2 weeks (4%).  Legally, that's all an employee is ever entitled to; if your business offers greater perks than legally mandated, that's fantastic!

 

In a rehire, it's important to consult the hiring manager and contract to ensure that something wasn't offered verbally or in writing.  Maybe due to the years of service, they offered to reinstate them at the 6%

 

Hope this helps!

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Level 2

Vaction Pay Entitlement for Employee rejoining

Perfect thanks so much for your help. I will let my client know.

 

Cheers

View solution in original post

5 Comments
Highlighted
Level 6

Vaction Pay Entitlement for Employee rejoining

Hi Suean:

 

Depends upon your jurisdiction.

I'm in Ontario, and under these circumstances, the provincially mandated vacation is 2 weeks (4%).  Legally, that's all an employee is ever entitled to; if your business offers greater perks than legally mandated, that's fantastic!

 

In a rehire, it's important to consult the hiring manager and contract to ensure that something wasn't offered verbally or in writing.  Maybe due to the years of service, they offered to reinstate them at the 6%

 

Hope this helps!

View solution in original post

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Level 6

Vaction Pay Entitlement for Employee rejoining

Hi Suean

Glad the note helped! One more quick thing, apparently in 2018 the rule changed to 3 weeks or 6% after 5 years in the same location, so it's not *just* 2 weeks/4% but the same idea still holds.

https://www.employerline.ca/employer-advice-ontario/vacation-pay/?gclid=Cj0KCQjwo6D4BRDgARIsAA6uN183...

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Level 2

Vaction Pay Entitlement for Employee rejoining

Thanks so much for your note. I am aware of the 6% rule in Ontario after 5 years of service but was not sure since there has been a break in employment.  I understand from your note that it is basically up to the employer to decide whether he wants to start the vacation pay at 4% or 6% right? I checked with my client there was no discussion with the staff about vacation pay so he just wanted to be sure he was not legally wrong if he decides to pay vacation pay @4% of gross pay.

 

Thanks once again for your reply

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Level 6

Vaction Pay Entitlement for Employee rejoining

Legally he's totally fine to start them off at 4% again.

Whether the employee gets upset about it is another story entirely, hence checking with the hiring manager/contract.  In lieu of any other direction, go by the law.

Worst come to worse, you can always retro-up it if you have to.

Highlighted
Level 2

Vaction Pay Entitlement for Employee rejoining

Perfect thanks so much for your help. I will let my client know.

 

Cheers

View solution in original post