Ontario government announces that public holiday pay calculations will change (again) effective July 1, 2018

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Employers who have been grappling with the new public holiday pay formula introduced earlier this year through Bill 148, the Fair Workplaces, Better Jobs Act, 2017, may be relieved to know that the government has announced that it will be reverting to the old formula, at least temporarily.

On May 7, 2018, the government filed a Regulation under the Employment Standards Act, 2000 (“ESA”) (Ontario Regulation 375/18), which will take effect on July 1, 2018. Under that Regulation, an employee’s public holiday pay will be equal to the total amount of the regular wages earned and vacation pay payable to the employee in the four weeks before the work week in which the public holiday occurred, divided by 20. This is the “old formula” that was in place prior to the changes that took effect on January 1, 2018.

It should be noted that while this change will impact the public holiday pay payable for the Canada Day holiday, the Victoria Day holiday, which falls on May 21, 2018, will still have to be paid according to the “new formula” introduced under Bill 148.

This appears to be a temporary, transitional fix, as the government has announced that it will be conducting a review of the rules in relation to public holiday pay in 2018. As part of this review, the government has invited submissions which may be sent to the following email address: exemptions.review@ontario.ca. The Regulation which changes the public holiday pay formula is in place until December 31, 2019, which suggests that the government expects to amend the public holiday pay provisions of the ESA following its review.

 

In Our View

The new public holiday pay formula that took effect on January 1st, 2018, had resulted in significant inequities as between full time employees and certain part-time and casual employees and may have created a disincentive for employers to give part-time employees work hours in the weeks leading up to a public holiday. Employers who wish to have a say in how public holiday pay is to be calculated going forward are encouraged to make submissions as part of the government’s ongoing review of this issue.

For further information please contact Porter Heffernan at 613-940-2764 or Mélissa Lacroix at 613-940-2741.