Vacations and vacation pay | fact sheet

Vacations and vacation pay | fact sheet

Most employees – full-time and part-time – are entitled to both vacation time and vacation pay.

New employment standards will come into effect on January 1, 2018. This page gives information on legislation in force until December 31, 2017. For information on new Employment Standards legislation, go to https://www.alberta.ca/vacation-pay.aspx

Basic rules

Most employees are entitled to annual vacation time and vacation pay to make sure they can rest from work without loss of income. Also:

  • employers must give vacation time, and employees must take the vacation to which they’re entitled
  • employees must work for 1 year before they’re entitled to vacation time
  • employees are entitled to these minimum paid vacations:
    • 2 weeks with pay – after each of the first 4 years of employment
    • 3 weeks with pay – after 5 consecutive years of employment

Anniversary date

Employers can establish a common anniversary date for employees, for vacation purposes. However, an employee must not lose any entitlement to vacation time or pay as a result of the introduction of a common anniversary date.

Change of ownership

When a business changes ownership, it doesn’t affect an employee’s vacation benefit entitlement. The previous owner must pay all vacation pay accumulated up to the date of transfer of ownership, and the new owner must grant any vacation time accumulated.

More details

Show Answer Employee eligibility

Basic eligibility

Most employees – full-time and part-time – are entitled to both vacation time and vacation pay after working for 1 year.

However, upon employee request and if the employer agrees, an employee can take vacation with pay before completing a full 12 months of employment.

Non-eligible employees

Some employees who work in specified industries and professions aren’t eligible for annual vacations and vacation pay:

  • licensed or registered salespersons of real estate and securities
  • commission salespersons who solicit orders principally outside the place of business of their employer; route salespersons are not exempt
  • farm and ranch employees
  • extras in a film or video production
  • licensed insurance salespersons who are paid entirely by commission income

Construction workers

Employers aren’t required to give their construction employees vacation time. However, construction employees must be paid vacation pay of at least 6% of their wages.

For more on this topic: Special rules for construction workers

Show Answer Vacation time

Employee entitlements

Employers must give vacation time, and employees must take the vacation to which they’re entitled. Where employees have already been paid vacation pay, their time off will be without additional pay. 

Where employees have already been paid out vacation pay, this time off will be without pay.

How it’s calculated

Vacation pay and vacation time accrue during 12-month periods, as follows:

After (number of years of employment) Number of weeks’ annual vacation

1 year

2 weeks

2 years

2 weeks

3 years

2 weeks

4 years

2 weeks

5 years or more

3 weeks

Timing of vacations

Employees must take their vacation time sometime in the 12 months after they earn it.

Length of vacations

Annual vacations are to be given in one unbroken period, unless an employee asks in writing for the vacation to be broken into shorter periods and the employer agrees.

The minimum amount of vacation time an employee can request is 1 day.

Disagreements about vacation dates

If the employer and employee can’t agree on the employee’s vacation time, the employer can decide when it will be taken. However, they must give the employee at least 2 weeks’ notice in writing of the vacation start date.

When a general holiday falls during a vacation

If qualified for the general holiday, the employee can take off either the first scheduled working day after their vacation. Or, in agreement with the employer, they can take another day that would otherwise have been a work day, before their next annual vacation.

Show Answer Vacation pay

Employee entitlements

Vacation pay is based on an employee’s wages (not other earnings) at the time the vacation is taken.

Wages are payment for work. For the purpose of calculating vacation pay, this definition does not include: overtime pay, general holiday pay, termination pay, an unearned bonus, tips and gratuities, or expenses and allowances.

How vacation pay is calculated

For employees paid monthly

For employees paid by monthly salary, the employer must pay the employee’s regular rate of pay for the time of their vacation.

Each week of vacation pay is calculated by dividing their monthly wage by 4.3333 (which is the average number of weeks in a month).

For employees paid other than monthly

For employees who are paid hourly, weekly, or by commission or other incentive pay, the employer must pay:

After (number of years of employment) Number of weeks’ annual vacation % of wages
1–4 years 2 weeks 4% of yearly wages
5 years or more 3 weeks 6% of yearly wages

Greater benefits

Increasing vacation pay

If the employer agrees to provide vacation pay greater than required by the Code, Employment Standards can enforce this.

Reducing vacation pay

If the employer intends to reduce an employee's vacation pay, they must notify the employee before the start of the pay period in which the reduction takes effect. However, the rate must always be at least the minimum required by the legislated standards.

An employee’s annual vacation period can also be reduced if that employee is absent from work (maternity, parental, reservist and compassionate care leaves are included). The reduction in vacation period may be made in proportion to the number of days the employee was or would normally have been scheduled to work, but did not.

When it’s paid out

When an employer pays an employee vacation pay each pay period, they must pay it:

  • at least once a month
  • on each cheque
  • at least one day before the employee’s vacation if vacation pay has not previously been paid out, and the employee requests it; vacation pay must be given to the employee no later than the next regular pay day after the vacation begins.

An employer must provide an employee with a statement of earnings that includes vacation pay, at the end of each pay period.

See also Payment of earnings.

Show Answer Vacation pay owed at termination

Employee entitlements

Before 12 months of service

If employment terminates before an employee completes 12 months of employment, the employer must pay 4% of the employee’s wages earned during employment.

After 12 months of service

If employment terminates after an employee becomes entitled to annual vacation, the employer must pay the unpaid vacation entitlements for the previous year, plus:

  • for an employee who’s entitled to 2 weeks’ vacation: at least 4% of the employee’s wages for the period from the date they last became entitled to an annual vacation to employment termination date

    OR

  • for an employee who is entitled to 3 weeks’ vacation: at least 6% of the employee’s wages for the period from the date they last became entitled to an annual vacation to employment termination date

Timing of payout

  • where proper termination notice is given, vacation pay must be paid within 3 days of termination
  • where neither the employer nor employee have to give termination notice, vacation pay must be paid within 10 days of termination
  • if an employee quits without giving proper termination notice, the employer must pay vacation pay to the employee within 10 days after the date on which the notice would have expired if it had been given

See also Termination of employment.

Show Answer Self-assessment tool

Does your workplace comply with Alberta’s employment standards laws for vacations? Use this online questionnaire to see if your business practices comply.

How the law applies

Part 2, Division 6 of the Employment Standards Code sets the general rules for vacations and vacation pay.

Disclaimer: In the event of any discrepancy between this information and Alberta Employment Standards legislation, the legislation is considered correct.

Created:
Modified: 2017-11-22
PID: 1471

Contact Employment Standards

Call Employment Standards for information, or Ask a question online.

  • 780-427-3731 (Edmonton)
  • 1-877-427-3731 (toll-free)

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