The Differences Between Vacation Pay and Vacation Time

Employment Law | September 30, 2021

When it comes to employment law, the regulations and standards surrounding vacations and time off can be difficult to understand. This is particularly so when trying to determine the differences between vacation pay and vacation time. Every employee should understand the differences between each to ensure that they know what they are entitled to. To help employees and employers understand what is required in BC, the employment lawyers have compiled some information on vacation time and vacation pay to highlight their differences.

Learn about the vacation time requirements in BC.

Vacation Time

In British Columbia, employees become entitled to vacation time on the anniversary date of their employment unless otherwise negotiated in their employment contract. After 12 consecutive months of employment, an employee is entitled to 2 weeks of vacation time per year. This amount increases to 3 weeks after 5 years (60 months) of consecutive employment with the same employer.

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All vacation time must be taken within 12 months of being earned. Employees cannot skip taking vacation time and just receive their vacation pay. If a statutory holiday falls on an employee’s scheduled vacation day, the employee may qualify for statutory holiday pay. They do not receive an extra day off. Employees can ask to take vacation days off before earning them if their employer allows it. If this occurs, the employer will simply deduct the number of vacation days the employee took in advance from their vacation entitlement once they have earned it.

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Vacation Pay

While vacation time will typically only be accessible after an employee works for 12 consecutive months, vacation pay begins to accrue after 5 calendar days of employment. Vacation pay is a percentage of an employee’s gross earning from their previous year of employment. This includes all wages paid, including vacation pay, bonuses, and commissions. In the first 5 years of employment, vacation pay is calculated as 4% of gross wages. After 5 years of employment, this amount increases to 6% of gross wages.

Commission-based employees take annual vacation and earn vacation pay in the same manner as other employees. Vacation pay should never be incorporated into commission rates or payments. When employment ends, employees must be paid all their remaining vacation pay.

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To learn more about the differences between vacation pay and vacation time or to inquire about other areas of employment law, get in touch with the experts at Linley Welwood. We can be reached through our online contact form and will be happy to answer any questions you may have.

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