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Is vacation pay paid on top of salary?

Expert: Howard Levitt

Jackie asked:

We have two employees in our Ontario office. They are both paid a basic salary, plus a share of commissions for all sales that come in, regardless of whether they are on holiday or not.

Sales are generated by incoming enquiries and are automatically processed and therefore are not reliant on either person physically having to sell. When they take vacation, the company pays them their basic salary, plus the normal commissions automatically.

My question therefore is: do we have a legal obligation to pay 4 per cent vacation pay over and above what we already pay both employees when they take leave or is vacation pay instead of this?

Howard Levitt answered:

No, vacation pay is not an additional amount. You are already paying it as part of the employee's salary.

About the author

Howard Levitt, Counsel to the national law firm Lang Michener. He is author of, The Law of Dismissal in Canada, The Quick Reference Guide to Employment Law and an upcoming book on Canadian Hiring Law. He is Editor In Chief of the Dismissal & Employmnet Law Digest.

Phone: (416) 307-4059
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