Effective July 1, 2018
On May 7, 2018, the Ontario government announced that it would be conducting a review of the public holiday system following feedback and discussions with stakeholders.
The review is being conducted in 2018 by the Ontario Ministry of Labour and forms part of the Ontario government’s ongoing response to the Changing Workplaces Review (CWR).
The CWR determined that public holiday rules were the source of the most complaints under the Employment Standards Act (ESA) and needed to be simplified.
As an interim measure, the Ontario Ministry of Labour has made a new temporary regulation, O. Reg. 375/18, which reinstates to the old public holiday pay formula effective July 1, 2018 until December 31, 2019, as follows:
Public holiday pay
- The following manner of calculation is prescribed for the purpose of determining public holiday pay for an employee under clause 24 (1) (b) of the Act:
- The employee’s public holiday pay for a given public holiday shall be equal to the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred, divided by 20.
- This Regulation is revoked on December 31, 2019.
The CPA commends the Ministry of Labour for initiating these changes and will provide feedback on the calculations.
In addition, the CPA has worked with the Ontario Ministry of Labour to provide answers to several questions in relation to the revised statutory holiday pay calculation:
- Do employers have the option to leave the programming ‘as is’ or is it mandatory for them to change to the new method of calculation beginning July 1?In order to be in compliance with the Employment Standards Act, 2000 (ESA), public holiday pay after July 1, 2018 is to be calculated using the method set out in Regulation 375/18 – based on the total regular wages earned plus vacation pay payable in the four work weeks before the work week that includes the public holiday, divided by 20. If an employer chooses to maintain the previous calculation, the employer must ensure that the public holiday amount is, at a minimum, equal to the amount required under the July 1 calculation.
- If an employer was unable to deploy the changes for Bill 148 for any or all of the holidays between January 1, 2018 and June 30, 2018, should they continue to work toward having those holidays calculated with the “new” formula as required under Bill 148?Yes, public holiday pay for public holidays from January 1, 2018 to June 30, 2018 is calculated based on the total regular wages earned in the pay period immediately preceding the public holiday, divided by the number of days the employee worked in that pay period. Please note that different pay periods apply if the employee was on personal emergency leave or vacation or both for the entire pay period before the public holiday or if the employee was not employed during the pay period before the public holiday.
- The new regulation does not address the information related to new employees under Bill 148. For example, if we have a new hire and there are no earnings in the pay period prior to the holiday, the calculation will be based on the hours worked in the current pay period in which the holiday occurs. Does this mean that employers should apply the regulation to new hires, resulting in some having potentially received holiday pay between January 1, 2018 and June 30, 2018, while those hired on or after July 1, 2018 will go back to receiving no holiday pay if 1/20 of 4 weeks prior is applied?The requirement to use the pay period that includes the public holiday if the employee was not employed during the pay period immediately preceding the public holiday only applies to public holidays from January 1, 2018 to June 30, 2018.
- If an employee is on personal emergency leave or vacation for the full pay period prior to the public holiday, do we skip to the prior pay period to calculate public holiday pay under Bill 148 or does it mean that we would now apply the 1/20 of 4 weeks prior, inclusive or exclusive of these types of wages?The requirement to use the pay period before the start of the employee’s vacation or personal emergency leave (or both) if the employee was on vacation or personal emergency leave (or both) during the pay period immediately preceding the public holiday only applies to public holidays from January 1, 2018 to June 30, 2018.
- Will the definition for “wages” be changed for the new regulation?The definition of “wages” and the definition of “regular wages” in the ESA are not affected by the Regulation. “Regular wages” is used when calculating public holiday pay and it means: wages other than overtime pay, public holiday pay, premium pay, vacation pay, domestic or sexual violence leave pay, personal emergency leave pay, termination pay, severance pay and termination of assignment pay and entitlements under a provision of an employee’s contract of employment that under subsection 5 (2) prevail over Part VIII, Part X, Part XI, section 49.7, section 50, Part XV or section 74.10.1.
Source: Canadian Payroll Association