As you may be aware, Bill 148 introduced a new method of calculating statutory holiday pay. The intention was to remove holiday pay proration for part-time and casual employees; however, the new calculation has created other inequities and unintended consequences both for employees and employers. Put simply, the new rules may result in underpayment or overpayment, depending on the circumstances and discourage employees from taking additional shifts due to the potential negative impact on holiday pay: consequences that RCC has been pushing to have revisited.
Holiday pay for an employee is currently is calculated by totalling the regular wages earned in the pay period immediately preceding the public holiday, divided by the number of days actually worked by the employee in that same pay period.
The examples below are just a few ways to illustrate the unfairness or unintended consequences that can result from the new 2018 holiday pay calculations:
|
Example |
Problem |
2017 Entitlement |
2018 Entitlement |
Difference |
|
Part-time employee earns $20/hour and works 2 x 10 hour shifts/week; Full-time employee earns $20/hour and works 5 x 7.5 hour shifts/week |
Part-time employee receives greater holiday pay than full-time employee |
Part-time employee: (2 x 10 x $20) x 4 weeks x 1/20 = $80 holiday pay Full-time: (5 x 7.5 x $20) x 4 weeks x 1/20 = $150 holiday pay |
Part-time employee: (2 x 10 x $20) / 2 =$200 holiday pay Full-time: (5 x 7.5 x $20) / 5 = $150 holiday pay |
Full-time employee working 5 days/week receives $50 lessthan part-time employee |
|
Employee receives $1,500 base pay + $3,000 in commissions week prior to holiday |
Employee receives disproportionate holiday pay |
$6,000 base pay + $3,000 commission x 1/20 = $450 holiday pay |
$1,500 base pay + $3,000 commission / 5 days worked = $900 holiday pay |
Employee receives twice as much holiday pay (+$450) as last year |
|
Two employees each normally work one day/week at 8 hours/day earning $20/hour; one accepts extra 4-hour shift week prior to holiday |
Employee “penalized” for accepting extra shift week prior to holiday, or both employees may refuse extra shift to avoid this issue |
Employee A: receives$32 holiday pay ($640 earned in four weeksprior x 1/20) Employee B: receives$36 holiday pay ($720 x 1/20) |
Employee A: receives$160 holiday pay (8 x $20 /one day worked) Employee B: receives $120 holiday pay ($12 x $20/2 days worked) = $120 |
Employee B receives $40 less in holiday pay after accepting to work additional shift, compared to receiving $4 more last year |
