Paid time off

Paid time off in Canada for federally regulated employers is governed by minimum vacation entitlements that increase with tenure. Employees are entitled to at least two weeks of vacation annually after completing one year of continuous employment with the same employer. This entitlement rises to three weeks annually once an employee reaches five consecutive years of service, and increases further to four weeks annually after ten consecutive years of employment. These minimums apply across all federally regulated industries, including banking, telecommunications, interprovincial transportation, and other sectors under federal jurisdiction.

The entitlements are established under Canada's federal labour standards, administered by Employment and Social Development Canada (ESDC). Vacation pay must be provided either as paid time off or as a lump sum payment equivalent to at least four percent of gross wages earned during the 12-month period preceding the vacation (or five percent after five years of service, and six percent after ten years). Employers may require employees to take vacation time, though notice requirements typically apply.

Employers must track employee tenure carefully to ensure proper vacation accrual and payment. Payroll teams should maintain records of hire dates and years of continuous service to determine which entitlement tier applies. Vacation must be scheduled and taken within a reasonable timeframe, and employers cannot refuse vacation requests without valid operational reasons. When employment ends, employees are entitled to vacation pay for any unused vacation days. Compliance with these federal minimums is mandatory; provincial rules may impose higher standards for employees under provincial jurisdiction.