What you need to know about paid leave in Canada

August 17, 2021

paid leave canada

If you’re looking to hire in Canada, one important task is understanding the country’s labor rules and regulations, especially when it comes to paid leave entitlements for employees (which can add up quickly for local employers).  

Paid time off is governed by the Canada Labour Code in federally regulated workplaces, but many employers will be held to the specific laws of each province and territory where employees reside. 

Read on to learn more about paid leave laws in Canada and how to navigate the legislative complexity as a local employer.  

Vacation and paid time off  

As you prepare international benefit and compensation packages, it’s important to know how much time off the government requires you to give employees. Canadian workers are entitled to the following vacation time, based on their length of employment:  

  • One or more year of service. At least two weeks of vacation pay at 4% of their gross earnings.  
  • Five or more years of service. At least three weeks of vacation pay at 6% of their gross earnings.  
  • Ten or more years of service. At least four weeks of vacation pay at 8% of their gross earnings.  

But what about the timing of vacations? Can employees take their vacation all at once or can employers require them to spread it out? In some cases, for example, it might pose a risk to your business to have an employee away for a full month of earned vacation.  

Under the code, eligible employers have the discretion to come to a collective agreement in regards to allowing employees to take their vacation at one time or spread it out over multiple periods.  

Types of unpaid and paid leave 

Employees need to take time off for a variety of reasons including, personal illness, illness of a child or close relative, death of a family member, or domestic violence. For these life situations, there are various types of leaves that apply and rules around what eligible employers must provide (which vary by province). Consider the following:  

Personal leave. You must provide every worker with at least five days of personal leave a year. Qualifying for this leave requires an employee to first work for three consecutive months for the employer. Three of these leave days must be paid. Qualifying reasons for an employee to take personal leave vary and may include illness or the need to take care of a family member. 

Leave for traditional or aboriginal practices. Employees of aboriginal descent may take up to five days of unpaid leave annually to participate in aboriginal practices. This may include hunting, harvesting, fishing and more. The employee must first work for at least three consecutive months to qualify. Additionally, the employer can require documentation proving the employee is of aboriginal descent be provided within 15 days of his or her returning from leave.  

Family violence victims leave. Employees that are the victim of family violence have access to up to 10 days of leave per year. Having worked for at least three consecutive months is required to qualify for the leave. Five of the days must be paid by the employer. 

Jury duty or court leave. Employers are required to offer leave to those that need to serve as witnesses in court or participate in the jury process. This leave is not required to be paid.  

Maternity and parental leave. Employees are entitled up to 17 weeks of maternity leave and up to 63 weeks of unpaid parental leave (depending on the province). Employers are not required to pay employees or provide benefits during maternity leave. But employees may be eligible for pay and benefits under the federal Employment Insurance program. 

Pregnant and nursing leave. In addition to maternity leave, if an employee is unable to work because of a pregnancy or nursing, they are eligible for unpaid leave—from the start of a pregnancy until 24 weeks after birth.  

Bereavement leave. Employees that have completed at least three consecutive months of employment are entitled to take up to five days of bereavement leave. The first three days must be paid by the employer.  

Medical leave. Employers must provide up to 17 weeks of leave for illness, medical appointments or organ and tissue donations. The leave isn’t required to be paid sick leave and there is no minimum regarding how long an employee must first be employed to qualify. Employers may request a note from a health provider if an employee’s sick days continue past 3 days.  

Paid holidays. Employees are also entitled to paid holidays. The nine general holidays in Canada include New Year’s Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Remembrance Day, Christmas Day and Boxing Day.  

Navigating paid leave in Canada  

Not only do local employers need to account for different types of employee leave, but they may also need to navigate scenarios when an employee stacks multiple leave entitlements. For example, an employee may need to take a personal leave and medical leave simultaneously. HR teams will need to know when it’s possible for an employee to use multiple types of leave and how to structure it legally.  

For employers in Canada, the area of paid time off can be challenging to navigate, especially with recent revisions to the Canada Labour Code. If you’re considering business growth in the Canadian market, it’s important to consider any employment contracts that you’ll have in place and any collective agreements, as well as how those fit into the code.  

How an employer of record can help  

Working with aemployer of record can help if you’re considering expanding your business in Canada. An employer of record can:  

  • Keep you up to date with employment regulations as they change   
  • Make sure every contract, for every worker, meets all requirements  
  • Provide guidance about cultural norms and hiring best practices 

Learn how our employer of record solution in Canada can help ensure you stay in full compliance with all statutory benefits and paid leave requirements in the local market. 

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