Understanding Statutory Holiday Pay
As a small business owner, it’s important to understand how to manage statutory holiday pay (or stat holiday pay) for your employees.
A Recap on Statutory Holiday Pay for Ontario Businesses
In effect July 1, 2018, the Ministry of Labour reinstated an “old” regulation for calculating public holiday pay in Ontario. This change applies to all employees covered by the Employment Standards Act (ESA). As an employer, your employees have the right to a day off and receive statutory holiday pay during a statutory holiday. However, there are a few exceptions. Some industries have special rules which require staff to work on statutory holidays. Furthermore, if a statutory holiday doesn’t fall on a normal working day, employees should receive a substitute holiday instead. Alternatively, an employee can agree in writing to work on the holiday. In this case, they must be paid either:
- statutory holiday pay plus premium pay for all hours worked on the statutory holiday and not receive another day off; or
- be paid their regular wages for all hours worked on the statutory holiday and receive another substitute holiday for which they must be paid statutory holiday pay.
How to Manage Statutory Holiday Pay
When it comes to HR best practices, here are four things you need to know about preparing statutory holiday pay.
- Understand your responsibilities under the Employment Standards Act. Take the time to understand your obligations as an employer. It’s your responsibility to provide your employees with the time off and calculate their pay correctly.
- Know how the “last and first rule” works. To qualify, your employee must have worked their last regularly schedule day of work before the statutory holiday or all of their first regularly schedule day of work after the statutory holiday. Unless there is reasonable cause, this determines if your employee qualifies for statutory holiday pay.
- Have a system in place to track your employees’ time off. Besides identifying who is and isn’t qualified for the statutory holiday entitlement, you’ll also need to consider vacation pay. That is, vacation time off payable during a statutory holiday and how to calculate this properly.
- Include statutory holiday pay information in your employee handbook. Having official documentation on statutory holidays allows complete transparency with your employees. It provides a clear understanding of who qualifies for the statutory holiday pay and who doesn’t.