Managing Employee Vacation Time

Vacation time is an entitlement to employees across all provinces in Canada. Apart from being an entitlement, it is also considered to be a benefit in attracting and retaining employees.  Each provincial employment standards set a minimum vacation time to be provided to employees – most of which outline a minimum of two weeks’ vacation per year to start. However, 62% of employers in Canada offer more than the minimum requirements to new employees[1]. New executives may be offered a minimum of four weeks of vacation time[2]. The amount of vacation a company chooses to offer will often be considered as part of the total compensation plan.

Once the amount of vacation entitlement is determined, and whether there are categories or accrual increases, it now becomes the employer’s responsibility to manage employee vacation time. Creating, enforcing and maintaining a vacation policy helps employers in managing vacations fairly and effectively.  A vacation policy should include: amount of vacation employees are entitled to on an annual basis, whether this is pro-rated or not, whether time is given as a ‘bucket’ at the beginning of each year, or whether it is accrued throughout the year, and what the process is for requesting to take time off.

Enforcing a vacation policy may be easier said than done. Some employees assume they can forego or cash in their vacation and some employees want to take more vacation then they have earned or are entitled to. But did you know that employers are entitled to schedule vacation on behalf of their employees? Permitting employees to accrue large amounts of vacation time over the years means that there is a substantial financial impact upon separation from employment. In order to avoid such pitfalls; manager or supervisors are advised to monitor employees’ unused vacation time every year.  In cases where the employee has not taken their vacation time (and it is not due to excessive workload), employers may schedule time off on their behalf.  Time away from work, to rest and renew, is known to be beneficial to all.[3]

On the other side, the employer also needs to set clear rules on making vacation requests and vacation scheduling. With summer time being the most popular time for employees to go on vacations, supervisors or managers may feel overwhelmed with vacation requests. Supervisors must communicate clearly to employees the policy rules and the peak work times, during which vacations may be restricted or prohibited.

[4]Tips for managing vacation scheduling:

  • Discuss your employee vacation policy during the hiring and orientation process and provide employees with written vacation policies and procedures.
  • Ask employees to submit vacation requests by a certain date so that a vacation schedule can be developed and any conflicts resolved.
  • Make sure your employee vacation policy describes when and how vacation time may be taken, and how disputes over high-demand days will be handled.
  • Know which team members can cover for each other, and make sure that if only two people can cover a certain task, are not both away at the same time.
  • Prepare for the absences. If colleagues will cover vacationers’ duties, make sure those taking time off provide a summary of work in progress, major responsibilities, key contact information, how to access related files, and other pertinent data to meet crucial deadlines. Provide a checklist of needed items to help soon-to-be vacationers focus on what they need to set up/leave behind.
  • Parcel out vacationing employees’ duties among several colleagues. This action keeps one colleague from having to do the work of two.
  • Review and update vacation policy regularly to ensure compliance with provincial legislation and also for cost-efficiency and ease of management.

You may contact your PEO Canada HR Advisor to discuss developing an applicable vacation policy for your business.

Krithikha Krishnan / HR Assistant / PEO Canada





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