You were offered a new position. You negotiated for a great salary and many vacation days. When you start working, your employer tells you that although your contract says that you are entitled to many vacation days, you cannot take any vacation for the first year. Is this legal?
Vacation Entitlement and the Employment Standards Act
The Employment Standards Act (ESA) is the legislation that creates employees’ rights to paid vacation. The ESA provides that an employee must receive at least two weeks’ paid vacation per year. However, there is a waiting period.
All employers have a ‘vacation entitlement year’. This is the period of time over which employees accrue vacation that they can take in the next year. The idea is that an employee must earn the vacation by working – accruing the vacation days.
The majority of employers use a calendar year as the vacation entitlement year. Some chose another timeline. Either way, if an employee starts working before the vacation entitlement year begins, she accrues/earns vacation for the partial year. This is called the stub period. These vacation days may be taken after the stub period ends. The remainder of the employee’s vacation days cannot be taken until after the end of the vacation entitlement year.
Bob’s employer uses the vacation entitlement year of January 1st to December 31st. Bob is hired on December 2nd and his contract says his is entitled to three weeks’ vacation. Technically, Bob accrues vacation at .25 days per month. His ‘stub period’ is from December 2nd to December 31st. So, in Bob’s first year of employment, he can only take .25 days of vacation – even though his contract says he should receive three weeks’ vacation.
How to avoid this Situation
Some employers will allow employees to take vacation right away, despite what the ESA says. Other employers, will amend a contract to allow an employee to take vacation in the first year.
It is important to understand your contract, and to understand that law prior to signing an employment contract. Spending an hour with an employment lawyer reviewing each term of a contract or offer letter will ensure that you know the legal implications of each clause in the document and may lead to changes to the offer that benefit you. If you have an employment contract that you would like reviewed, a lawyer at MacLeod Law Firm would be happy to assist you. Please contact us at firstname.lastname@example.org or 647-204-8107.
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