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Pay by the Rules: Managing Holiday Pay

April 12, 2017

Maybe you’ve come across this before. You’re coming up to a long weekend, and one of your employees decides they’re going to “play hooky” the Friday before a long weekend. Some Canadians might not know that, depending on their jurisdiction, one of the consequences could be that the employee forfeits their holiday pay entitlement.

In most jurisdictions (excluding British Columbia, Saskatchewan, and federally regulated workplaces), employees are subject to the “Last and First Rule.” This rule states that employees must work their last scheduled shift before a holiday and their first scheduled shift after the holiday to be eligible for holiday pay entitlements. This is not to be confused with the calendar days falling immediately before and immediately after the actual holiday. Sometimes legislated holidays fall near an employee’s regular weekly time off, or are included in an employee’s scheduled vacation. The “Last and First Rule” applies to an employee’s regularly scheduled work before and after the holiday.

Jurisdictions that have the “Last and First Rule” in place vary slightly in how this rule is applied, but the idea is the same. Employees must work these days unless they qualify for an exemption from the rule. Depending on the specifics of your jurisdiction, employees subject to the “Last and First Rule” are only exempt if they:

  • Have received consent, authorization, or permission from their employer; or
  • Can prove “reasonable cause” (for example, something beyond their control has prevented them from working).

The exemptions within the “Last and First Rule” seem straightforward on the surface, but can be quite complex when implemented. Think about the following questions: What does it mean to give and receive consent, authorization, or permission? What does it mean to have “reasonable cause”? As soon as we try to provide one concrete answer, we realize how difficult the task really is. There always seems to be a “what if?” when answering either of these questions. Legislative bodies have purposefully written the legislation this way to allow employers greater flexibility, since each situation is different and there are often many factors to consider.

So what does this mean for your organization?

Navigating these rules while maintaining positive employee relations can be quite difficult, because these decisions tend to be determined on a case-by-case basis, and they affect people's paycheques. We’ve outlined some best practice tips to help you effectively manage holiday pay in our 3-Step Guide.

Download your free guide now and help prepare for upcoming holidays!

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