Use It or Lose It Vacation Policy in Canada

Use It or Lose It Vacation Policy in Canada

Reading Time: 4 minutes

There are plenty of great things about Canada. Nice and friendly people, hockey, beautiful landscapes, and low unemployment rates. And, of course, Celine Dion.


But one thing we can say this wonderful country is lacking is definitely enough vacation days! If you’re still unaware of this fact, Canada is one among the countries who have the lowest number of paid vacation days throughout the year. To its residents, Canada grants up to 10 paid days off from work. And when we add 9 more days Canadians get due to public holidays, we come to a total amount of 19 paid days off from work per year.

This is not enough.


Over the past few years, we’re increasingly starting to talk about burnout syndrome. More and more people suffer from burnout due to increased stress and expectations at work, lack of sleep and fast-paced life tempo. 


One certain way to prevent burnout from happening is to take regular vacations. See, Canada, vacations are good for you!


To ensure employee retention and increase employee satisfaction and motivation, employers should track employee vacation days. If you’re one of those who are afraid of enormous excel files and you’re sweating by the mere thought on how much time you’ll lose on it – don’t worry. We got you covered!


Have you tried Vacation Tracker yet?


Vacation tracker team made unique software that will seamlessly easy fit your needs, no matter the niche you’re in. Easy to use, and minutes to install, Vacation tracker makes sure your employees are just minutes away from requesting days off. And what’s better, you don’t have to pay for the first two weeks! Take the opportunity to test it and review it and give money only when you see it fits! Why don’t you try free 14-days trial now?


Rumour has it… You can lose your vacation days in Canada if you don’t use it.


But that’s not true. Unlike in the USA “use it or lose it” policy is declared illegal in Canada. However, if you don’t use your vacation days in a timely manner, the employer has to pay for it.

To be exact, Canadian law, shortly, says this:


“Most Employees earn at least 2 weeks of vacation time after every 12 months. Employees are entitled to be paid at least 4 percent of total wages earned as vacation pay.”


To put it simply – Canadian employees are not fully encouraged to take leftovers. Employers are allowed to ban their employees from transferring any vacation days from the previous year into another, however, the employer needs to pay any vacation day left unused.


Many Canadians find themselves confused about this principle, but we want to make it clear once and for all. Use it or lose it principle applies only to vacation time and not to vacation pay.


The confusion over use it or lose it principle was first introduced to Canadians 75 years ago.


Do you know that first vacation legislation was enacted in 1944? It basically enables employers to pay employees unused vacation days.


Employment Standards are setting out the minimum legislation related to employment. However, what complicates the situation further is that each jurisdiction in Canada has its own legislation which further clarifies the treatment of vacation.


Some jurisdictions will have legislation which addresses specifically vacation time and its pay, often covering the minimum vacation time employee earns.

Most provinces legislate minimum worth of two weeks’ vacation days, but only after one year of employment.


How many employees will be paid during vacation time heavily depend on the company’s policy? In most cases 2 weeks of vacation is equivalent to 4 percent, three weeks are equivalent to 6 percent and so on.


Can your employer ban you from using your vacation?


Technically employers have the right to do so by ensuring the employee takes time off when it’s most acceptable to the company. However, Shore highlights the importance of employers noticing their employees about the times they can book a vacation.


You might have been asking yourself: Can employer revoke already approved vacation?


What’s most annoying when it comes to people is the inability of respecting agreements. And while most of us try to stay on a good track and be careful about other people’s time and money, some employers try to move the boundaries.


Just imagine – you asked permission to go on a vacation and you got it. Then you spent a few weeks fishing for the cheapest flight tickets and preparing for the long-awaited trip to relaxation lane. When, suddenly, your boss calls you only to tell you-you’re needed in the office and demands you to give up on your vacation.


What you can do in this situation are two things: say no and go on your long deserved vacation, or comply with your bosses desires. In the end, if you choose to use your vacation days you’re facing with possible disciplinary consequences. However, this situation can be the perfect one for an employee to press lawsuits against the employer and you might just get away with it.


Working and vacationing in Canada seems like a huge deal. Especially when you see how complicated legislation can be. However, we hope we cleared up some things for you and prepared you for your next fabulous vacation.