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Everything You Need to Know about Ontario's Changes to Public Holiday Pay

Posted by Karen McMullen

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Jul 9, 2018 9:00:00 AM

Everything-You-Need-to-Know-About-Ontario's-Changes-to-Public-Holiday-Pay-compressorAs you head into the summer season, you likely have long weekends on your mind. After all, Ontario has four of them, one each month from July until October. Things kick off with Canada Day on July 1. The Civic Holiday, or Simcoe Day, falls on the first weekend of August and, although it’s not a statutory holiday, it is a day off for many Ontario workers. September brings Labour Day, and Thanksgiving is always the second Monday of October. 

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While your workers may be thinking about summer vacations, day-trip holidays, and long weekends at the cottage, you probably have another concern on your mind. With four holidays in the next four months, you need to know about Ontario’s changes to public holiday pay.

A Proposed Formula

With the passage of Bill 148 last November, the Ontario government introduced a new formula for calculating public holiday pay. The formula made its way into law with the passage of the bill, despite many stakeholders voicing concerns about the effect of the new formula. 

The new formula appeared to complicate public holiday pay calculations, and there were some concerns it could lead to confusion, particularly in the temporary staffing industry. It appeared that, under the new formula, workers could be paid multiple times over for the same holiday.

Out with the New, in with the Old

Responding to concerns, the Minister of Labour reviewed the new formula and considered options. In early May 2018, the government opted to return to the previous public holiday pay calculation. The previous policy came back into effect on June 1, 2018. It will be in place until December 31, 2019. 

What does this mean for you? From now until the end of next year, you can continue using the old formula. While there were a few public holidays that had to be calculated under the new formula in 2018, you don’t need to continue using it for the rest of this year or next year.

A New Policy Is Coming

The Minister of Labour said the government would use the period July 1, 2018, to December 31, 2019, to study the issue of public holiday pay and develop a new formula to address the concerns of stakeholders. Chances are what will be enacted will not be the same as the formula in Bill 148.

As the government studies the issue and makes recommendations about solutions, employers and staffing agencies can continue to use the old formula.

What Is the Old Formula?

Since employers had to begin using the new public holiday pay formula on January 1, 2018, most will need to change their payroll to use the previous formula again. Be sure to advise your HR and payroll teams, or your payroll provider. While many will take steps on their own, a gentle reminder will help you avoid any mistakes.

In case you need it, here’s what the old formula stated. The employee’s public holiday pay for a given public holiday shall be equal to the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred, divided by 20.

You can find many examples on the government’s website, along with other sites. A public holiday pay calculator may also be a useful tool. Just be sure to find one that’s up to date and reflects the recent changes the Ontario government has made.

Stay Tuned

While going back to the previous formula is helpful for now, a new formula will eventually be passed into law. You’ll want to keep an eye on this situation as the government may make additional changes to public holiday pay in the near future. Maintaining compliance is a tall task, but it doesn’t have to be with the right back office support.

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Topics: Compliance and Legislation

Karen McMullen

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