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May 15, 2018

ESA Update: Ontario Set to Return to Its Former Public Holiday Pay Calculation

By Fiona Brown, Michael F. Horvat and Nicholas Smith

On May 7, 2018, the Ontario government introduced Ontario Regulation 375/18, signalling the end of the holiday pay calculation recently brought in by Bill 148. As of July 1, 2018, the public holiday pay calculation provided for in the Employment Standards Act, 2000 (the “ESA”) will revert back to the old formula used prior to passing Bill 148. The reinstatement of the former calculation will address the issue of enhanced public holiday pay obligations for employers with part-time and casual workers.

Under Bill 148, public holiday pay was based upon an employee’s regular wages earned during the pay period immediately preceding the public holiday, divided by the number of days worked by the employee during the pay period. This formula failed to prorate the employee’s public holiday pay to reflect the time actually worked in the qualifying period. As a result, an employee who had worked one eight-hour day in the qualifying pay period could be entitled to more public holiday pay than an employee who had worked two four-hour days at the same wage rate over the same period.

Regulation 375/18 returns the ESA to the former calculation for determining public holiday pay:

“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.”

The Ministry of Labour is conducting an extensive review of the ESA’s public holiday system that will involve garnering feedback and hosting discussions with stakeholders to coincide with the implementation of Regulation 375/18. Employers wishing to submit feedback for the review can email their submissions to exemptions.review@ontario.ca.

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