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What’s old is new again (for now): Ontario government to review public holiday pay calculations and temporarily reinstate “old” formula effective July 1, 2018

public holiday pay calculationsPrior to the enactment of the Fair Workplaces, Better Jobs Act 2017 (Bill 148), public holiday rules were the source of the most complaints to the MOL. While change was welcome, many employers in Ontario have questioned the wisdom behind the changes in calculating Public Holiday Pay that were ultimately imposed through Bill 148. There has been significant confusion and payroll system overhaul required to comply with the new formula.

Even though these changes were only implemented 4 months ago, the Ontario government has heeded the calls from employers and industry associations and is acting to address the concerns regarding public holiday calculations. Specifically, on May 7, 2018, the Ontario government announced that it will conduct a review of the public holiday system under Part X of the Employment Standards Act, 2000 (ESA). The review will be conducted in 2018 by the Ministry of Labour.

As an interim measure, the government has created a new regulation, O. Reg. 375/18, that reinstates the old Public Holiday Pay formula that applied before Bill 148 was enacted. The regulation will come into effect on July 1, 2018 and will remain in place until December 31, 2019.

What does this mean for upcoming public holidays?

Since the “old” Public Holiday Pay formula will not be reinstated until July 1, 2018, it’s important for employers to ensure they make the appropriate changes to their public holiday pay calculations at the right time. In short, the “old” formula (based on the wages in the four work weeks prior to the public holiday) will not be reinstated until the Canada Day holiday.

For the upcoming Victoria Day public holiday, the Bill 148 formula to be used is as follows:

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.

If the employee was on a personal emergency leave or on vacation or both for the entire pay period before the public holiday, the regular wages earned by the employee in the pay period before the start of that leave or vacation, divided by the number of days the employee worked in that period is used to calculate the public holiday pay.

If the employee was not employed during the pay period before the public holiday, the public holiday pay is calculated using the regular wages earned by the employee in the pay period that includes the public holiday, divided by the number of days the employee worked in that period.

For the Canada Day public holiday and any subsequent public holiday through December 31, 2019 (or until the Government finalizes its review of the public holiday pay provisions), the following “old” formula will apply:

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.

For employers who wish to participate in the Government’s review of the public holiday provisions, you may send your submission to exemptions.review@ontario.ca

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Prominent Canadian lawyers Patrizia Piccolo and Jennifer Heath have come together as Piccolo Heath LLP, Canada’s newest employment law firm. With more than 30 years combined expertise, the firm was founded with the purpose of delivering outstanding legal counsel and dynamic, client-focused service. Piccolo Heath LLP is focused on guiding clients through the legal landscape to determine the best solutions to their unique issues. The firm is well-versed in current employment-related case law and statutes, but is also highly sensitive to the practical impact of the law on both employers and employees. Read more.
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