Vacation and Vacation Pay

Where employees are not members of a labour union, the Employment Standards Act sets out the requirements for paid vacation.

If an employee is employed by the same employer for less than eight years, the Employment Standards Act says that employers must give every employee:

• a vacation of two weeks after each 12 months of work and within the following four months (this four-month period can be varied if mutually agreed upon by the employer and the employee)
• vacation pay of at least 4 per cent which the employer must pay at least 1 day before the vacation begins

An employer must tell the employee of his/her vacation at least one week before it begins. 

If an employee is employed continuously by the same employer for eight years or more, the Employment Standards Act says that employers must give every employee:

• a vacation of three weeks after each 12 months of work and within the following four months (this four-month period can be varied if mutually agreed upon by the employer and the employee)
• vacation pay of at least 6 per cent which the employer must pay at least 1 day before the vacation begins

An employer must tell the employee of his/her vacation at least one week before it begins.

Part Time Employees

An employee who works for an employer for 12 continuous months and, during that time, works for less than 90 per cent of the employer's normal working hours can request vacation pay only instead of vacation time.

Workers Not Covered

Not all workers are covered by the Employment Standards Act rules on vacations and vacation pay. Those who are not include:

• salespersons whose income is derived primarily from commission on sales
• farm labourers

When an Employee Earns Vacation

An employee earns vacation pay and vacation during the first 12 months that he/she works for an employer and every 12 months after that.

Vacation Pay Included in the Hourly Rate

An employer can include vacation pay in an employee's hourly rate, which would be paid in every pay cheque, if the employment is seasonal.

In that case, the employer:

• must have proof that the employee knows vacation pay will be paid on every pay cheque, and
• must show on payroll records that vacation pay has been paid to the employee, and
• must show on the employee's pay stub that vacation pay is included in the pay cheque

Keeping Records

Employers must keep accurate payroll records, including information on vacations taken and vacation pay paid.  If a Labour Standards Officer audits and finds no record of vacation pay, the Director of Labour Standards might find the employer still owes the employee vacation pay.

Vacation Pay When Employment Ends

When employment ends, the employee is entitled to receive all accumulated vacation pay he/she has earned. The employer must include this monies with the employee's final pay.

Guide to Employment Standards is available online as a PDF document.

Who can I contact for more information about paid holidays?

Hazel Walsh-Scott (Office Coordinator)
Sherwood Business Centre
161 St. Peters Road, 2nd Floor 
PO Box 2000, Charlottetown, PE  C1A 7N8
Phone: 902-368-5550
Toll Free: 1-800-333-4362
Fax: 902-368-5476
Email: hawalsh@gov.pe.ca