We know that vacation pay and time off aren’t just perks—they’re essential rights that impact your well-being and your wallet. Every week, we hear from employees who are unsure about their vacation entitlements or from employers who want to get their policies right. Whether you’re planning a dream getaway or just want to ensure your paycheque is correct, understanding Ontario’s vacation laws is key
Vacation pay is more than just a line on your pay stub. It’s a legal entitlement under Ontario’s Employment Standards Act (ESA) that ensures you’re compensated for your time off, regardless of your role or industry. If you’re working in Ontario, these rules apply to you—whether you’re full-time, parttime, or on contract.
We’ve had clients come to us after being told their unused vacation days would simply “expire” at yearend. Here’s the truth: Ontario law does not allow employers to wipe out your statutory vacation pay or time if you don’t use it by a certain date. Any policy that says you lose your minimum ESA vacation entitlement is not enforceable.
Employers must ensure you take your vacation within 10 months after each entitlement year. If you don’t, they must pay out your unused vacation pay. While some companies offer extra vacation daysabove the ESA minimums, only those extra days (not the ESA minimum) can be subject to “use-it-or-loseit” rules, and only if your contract says so.
Ontario’s vacation entitlements are straightforward, but we often see confusion around long service:
After 1 year: You’re entitled to 2 weeks of vacation and at least 4% of your gross wages as vacation pay.
After 5 years: You’re entitled to 3 weeks of vacation and at least 6% of your gross wages as vacation pay.
Contrary to some workplace myths, the ESA does not increase vacation entitlement again at 10, 15, or 20 years. If you’ve worked for the same employer for 20 years, your minimum entitlement remains 3 weeks of vacation and 6% vacation pay each year—unless your contract or company policy gives you more.
Recently, we helped a client who had worked for her employer for 20 years and was told she was only entitled to 3 weeks of vacation. She wondered if she should be getting more. We confirmed that, under the ESA, 3 weeks is the minimum after 5 years, even at 20 years. However, some employers do offer more generous packages, so always check your contract!
Many employees ask us if they can “cash out” vacation pay instead of taking time off. The ESA’s default is that vacation time must be taken, not just paid out, unless you and your employer agree in writing to substitute pay for time off. Employers can pay vacation pay with each paycheque, or as a lump sum before vacation, but only with your agreement.
Employers do have some flexibility in scheduling vacations, but they must act reasonably and in good faith. If you want to take your vacation at a certain time, your employer should accommodate you unless there’s a legitimate business reason not to.
If your employment ends—whether you resign or are terminated—your employer must pay out any vacation pay you’ve earned but haven’t received. This includes vacation pay from previous years and any you’ve accrued in the current year. The law requires this payment within seven days of your employment ending or on your next regular payday, whichever is later.
We’ve assisted clients who, after leaving a job, were shocked to see their final paycheque missing vacation pay. In every case, we helped them recover what they were owed—sometimes with interest.
Employers can require you to take vacation at certain times, especially if it’s necessary for business operations. However, they can’t prevent you from taking your minimum ESA vacation, nor can they revoke already-approved vacation without a good reason. If you’re denied your statutory vacation, you have the right to file a complaint with the Ministry of Labour.
Minimum vacation: 2 weeks (4% pay) after 1 year, 3 weeks (6% pay) after 5 years.
No “use-it-or-lose-it”: Statutory vacation can’t just disappear—unused vacation pay must be paid out.
End of employment: All earned vacation pay must be paid promptly.
Employer scheduling: Employers can schedule vacation but must respect your statutory rights.
For more details, see the [official Ontario ESA guide]
Share via:
Severance Package Red Flags” Checklist
Copyright © 2025 All Rights Reserved By Thrive Law
