Ontario’s payroll nightmare: compliance with confusing statutory holiday pay rules — without stress

Judging by the volume of calls to the Canadian Payroll Association, calculating pay for statutory holidays remains a mystery to many payroll managers or teams. According to the association, the calls are usually “how do I calculate,” or often just to “double check.” [1]

Considering there are ten statutory holidays per year in play nation-wide — only nine in Ontario — plus, of course, the controversial “should be a stat-holiday” Remembrance Day — it is more likely a confusion rather than a memory issue. Some employers recognize Civic Holiday as a holiday in Ontario, and others do not.

There are five National holidays — News Years Day, Good Friday, Canada Day, Labour Day, Christmas Day [2] — but the other statutory holidays vary by province. Confusion is the biggest issue. Altogether, there are 12 holidays recognized, but not all are statutory (See lists below, including 2019 and 2020 dates for your planning.)

Imagine the nightmare scenario for the average Canadian National company, with different rules in each province. Then, adding to the confusion are new rules on how an employee notifies you that they agree to work the holiday, and how to calculate for team-members on layoff, and how to calculate for an employee who does not typically work that day, and dozens of other rules.

How to calculate

Confusion indeed reigns in terms of dates (they change each year) and eligibility (some companies recognized Civic, some do not in Ontario) and calculation. Although the basic rules can be stated “in a nutshell” as we have below, the actual guidelines and case examples on the Ontario government site, just for this topic, is many pages long. [Note 3]

NOTE: One look at the Ontario public holidays page [Note 3] for calculating holiday pay is more than a little confusing and intimidating. When in doubt, refer to a professional expert Payroll Manager, such as the team at Pivotal Solutions>>

Or, you can try using the Ontario government’s “starter” calculator tool — but bear in mind the numerous rules mentioned below and double check everything — especially given their disclaimer: “This tool provides a rough estimate only, based on the information you enter. Other factors not accounted for in the estimator may affect what you’re entitled to. Please talk to a lawyer, if you have any questions about what you’re entitled to.” [Note 5]

In a nutshell, it seems easy, doesn’t it?

In a nutshell, if you are paying the employee to work on a statutory public holiday, you either must:

• “public holiday pay plus premium pay for all hours worked on the public holiday and not receive another day off (called a “substitute” holiday);”
• “be paid their regular wages for all hours worked on the public holiday and receive another substitute holiday for which they must be paid public holiday pay.” [3]

There are also provisions in Ontario for employees who are mandated (required) to work the public holiday. [For special rules for industries, see note 4]

Calculating public holiday pay — here quoting the Ontario government site:
“The amount of public holiday pay to which an employee is entitled is all of the regular wages earned by the employee in the four work weeks before the work week with the public holiday plus all of the vacation pay payable to the employee with respect to the four work weeks before the work week with the public holiday, divided by 20.” [3]

In addition:
“If the public holiday occurs between January 1, 2018, and June 30, 2018, the amount of public holiday pay to which an employee is entitled is all of the regular wages earned by the employee in the pay period before the public holiday, divided by the number of days the employee worked in that period.

Different pay periods are used if either:

• the employee was on personal emergency leave, on vacation or both for the entire pay period before the public holiday, or
• the employee was not employed during the pay period before the public holiday.”

Now, the confusion is starting to accumulate. There are many variables, including the definition of the “all of the regular wages earned by the employee in the pay period before…”

Regular wages only

You do not calculate holiday pay based on “any overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination pay, severance pay or termination of assignment pay payable to an employee.” [3]

Many variables

So far, so good, although it’s already a little bit confusing. Take a quick trip to the Ontario government site, and you’ll see numerous exceptions, definitions and case studies to help illustrate how it should be done. Some of the many variables in calculating holiday pay include:

• When an employee is in layoff.
• Rules on substitute holidays.
• Additional rules for entitlements when the public holiday falls on a non-working day.
• How to calculate for employees who do not usually work that day.
• What constitutes an agreement from the employee that they volunteer to work on a public holiday.
• What to do when an employee volunteers to work, but then does not do so.
• What if employees only work some of the hours on the statutory holiday
• And, literally dozens of other variables.

[Then, do yourself a favour, and contact Pivotal Solutions.]

Holiday dates for 2019

In 2019 the holidays for Canada are (or were) — but not all provinces recognize these as statutory (particularly Remembrance Day, Easter Monday, and Civic Holiday):

• New Year’s Day (always January 1) Tuesday, January 1, 2019
• Ontario Family Day (the third Monday in February) Monday, February 18
• Good Friday (Friday before Easter Sunday) Friday, April 19, 2019
• Easter Monday (mandated only for Federal Government Employees) Monday, April 22, 2019
• Victoria Day (Monday before May 25 Monday, May 20, 2019
• Canada Day (always July 1) Monday, July 1, 2019
• Civic Holiday (not always recognized) Monday, August 5, 2019
• Labour Day (first monday in September) Monday, September 2, 2019
• Thanksgiving Day (second Monday in October) Monday, October 14, 2019
• Remembrance Day (always November 11, and not statutory in Ontario) Monday, November 11, 2019
• Christmas Day (always December 25) Wednesday, December 25, 2019
• Boxing Day (only statutory in Ontario or for Federal Government employees, always December 26) Thursday, December 26, 2019 [3]

Holiday dates for 2020

In 2020 the holidays for Canada are (or were) — but not all provinces recognize these as statutory (particularly Remembrance Day, Easter Monday, and Civic Holiday):

• New Year’s Day (always January 1) Wednesday, January 1, 2020
• Ontario Family Day (the third Monday in February) Monday, February 17
• Good Friday (Friday before Easter Sunday) Friday, April 10, 2020
• Easter Monday (mandated only for Federal Government Employees) Monday, April 13, 2020
• Victoria Day (Monday before May 25 Monday, May 18, 2020
• Canada Day (always July 1) Monday, July 1, 2020
• Civic Holiday (not always recognized) Monday, August 3, 2020
• Labour Day (first monday in September) Monday, September 7, 2020
• Thanksgiving Day (second Monday in October) Monday, October 12, 2020
• Remembrance Day (always November 11, and not statutory in Ontario) Monday, November 11, 2020
• Christmas Day (always December 25) Wednesday, December 25, 2020
• Boxing Day (only statutory in Ontario or for Federal Government employees, always December 26) Thursday, December 26, 2020 [3]

Still confused about obligations and compliance and pay calculations for Statutory Holidays? Contact the experts in Payroll and Pivotal Solutions:

Notes
[1] Payroll Reporter
[2] Statutory National Holidays
[3] Ontario Public Holidays
[4] Special rules for industries on mandated statutory holiday work

[5] Ontario’s Public Holiday Pay Calculator tool Bear in mind this tool is meant for the employee and the government disclaimer: “This tool provides a rough estimate only, based on the information you enter. Other factors not accounted for in the estimator may affect what you’re entitled to. Please talk to a lawyer, if you have any questions about what you’re entitled to.”