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Vacation pay in BC:

Expert: Employment Standards Branch, Labour & Citizen's Services

Kirsten asked:

I work for a small company and we hired a new staff member three months ago, who has a habit of calling in sick every other week so has had smaller pay cheques due to missing work. This same person recently asked payroll to pay out any holiday pay that had been earned since their hire date. Is the company obligated to pay out the holiday pay when they have not been employed with us for a year yet?

I am in BC. I have tried reading the BC Labour standards act and find them unclear, well not clear enough for me. I always thought a person had to be employed for one year before they were eligible for holiday pay, I understand you get paid it after being employed for five days, it is the pay out of the monies prior to the one year anniversary that I am not understanding, because if we continiue to pay out the holiday pay then the employee won't have any for "pay" for their "vacation" time off. I am under the understanding that it is mandatory that an employee take a two week vacation AFTER one year, so how does that work? Sorry if I am talking in circles I just want to get my i's dotted and my t's crossed before I sit down with my bosses and discuss the situation.Thank you again for your time in this matter.

Employment Standards Branch, Labour & Citizen's Services answered:

To answer your question I spoke with Katherine, an an information officer at the Employment Standards Branch of Labour & Citizen's Services.

First, you do not have to pay the employee his or her vacation pay in advance and yes, you must ensure that the employee takes a vacation once that entitlement is earned, which will be after the first full year of employment.

One thing that is confusing in reading the Act is the statement in Section 58.1 a which says the employer must pay vacation pay after 5 calendar days of employment. Katherine explained that this does not intended to direct when vacation pay must be paid, but rather helps clarify vacation pay when there is a casual or part time work situation.

When it comes to the timing of vacations, the Act is very strict.

Section 57 of the Employment Standards Act says the employer must give an employee a minimum annual vacation of either 2 or 3 weeks depending on the length of employment and furthermore, the employer must ensure that the employer takes an annual vacation within a set time after the year of employment in which the entitlement is earned. (Section 59.2 creates some flexibility when the employer agrees to let an employee take vacation in advance, but the employer is not required to grant requests for early vacations.)

Katherine pointed out that the use of the word "must" is not flexible. Since the legislation says must, the employer has to do what is set out in the Act.

The Act does allow the employer and employee to pay the vacation pay on scheduled paydays if this is mutually agreed to in writing by both the employer and employee. However, you are not obliged to agree to this unless it is part of your collective agreement and it can be problematic. You are required to ensure the employee takes the required two weeks off following his or her first year of work and if vacation pay is paid out on each payday, your employee may not have money saved to cover the time off.

Katherine pointed out that in her experience as someone who mediates when problems arise between and employer and employee, it is often the employer who tries to be nice and accommodating to an employee who is pushing for more than the norm who later has difficulty with that same employee.

I hope this answers your question.

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