Middlesex County, Ontario | Here, when someone says 2 weeks vacation, that actually means 4% vacation.
4% of the employees pay goes into an account (vacation pay). When an employee takes paid time off, the employee is paid from that account.
It’s a little messy the first couple of years as there isn’t always enough money in that account to cover 2 weeks off. The employer has to front that money. That’s why technically you don’t have the right to vacation the first year of employment, but that’s not standard practice.
The employee is entitled to all of that account’s holdings at the time of termination. The employee is also entitled to all of that account’s holdings when they take all of their vacation at once. Most people only take a few days at a time, so they are only withdrawing a few days pay at a time.
That account is listed as a liability on the employer’s balance sheet.
The account never expires. There is no such thing as “use it or lose it.”
In the case that an employee works overtime, is only allowed to take off 2 weeks a year, and doesn’t take all their vacation at once, then that account grows and the employee can’t access those funds. The only way the employee can clean out the vacation pay account is to quit or to take all their vacation at once.
The oldest dirty employer trick in the book is to keep the vacation pay account holdings when the employee quits. Sometimes employers get away with it (because employers don’t know better).
Edited by WildBuckwheat 7/7/2020 16:44
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Accrued vacation time when you quit your job
