Public holidays sound simple until you run payroll for one. Who qualifies? What do you pay someone who stays home? What about the employee who agrees to work Canada Day? Ontario’s Employment Standards Act has clear answers, and getting them right keeps your payroll clean and your team happy.
Ontario’s public holidays
Ontario currently recognizes nine public holidays: New Year’s Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day and Boxing Day. Note that Civic Holiday in August and Remembrance Day are not public holidays under the ESA, although many employers choose to observe them anyway.
Who qualifies for the day off with pay
Most employees qualify, whether they are full-time, part-time, casual or seasonal, and there is no minimum length of service. The main condition is the last and first rule: the employee must work all of their last regularly scheduled shift before the holiday and all of their first regularly scheduled shift after it, unless they have reasonable cause for missing one. An employee who qualifies gets the day off and receives public holiday pay.
How public holiday pay is calculated
The formula is straightforward: add up the regular wages the employee earned in the four work weeks before the week with the holiday, plus any vacation pay payable in that period, and divide the total by 20. That result is the public holiday pay. Because the formula averages recent earnings, part-time employees receive a proportionally smaller amount, which is exactly how the system is designed to work. There is no need to guess or prorate by instinct; run the numbers.
When someone works the holiday
If an employee agrees in writing to work on a public holiday, the employer generally has two options:
- Pay their regular rate for the hours worked, plus a substitute day off with public holiday pay, or
- Pay public holiday pay plus premium pay, which is 1.5 times their regular rate, for every hour worked on the holiday
Some workplaces, such as hotels, restaurants and hospitals, have special rules where employees can be required to work a holiday, but the pay options are similar. Whichever route you choose, put the agreement in writing and note it in your payroll file.
Mistakes we see most often
A few errors come up again and again in small business payrolls:
- Assuming new or part-time staff do not qualify; length of service does not matter in Ontario
- Paying a flat day’s wage instead of using the four-week averaging formula
- Forgetting to include vacation pay payable in the calculation
- Paying premium pay but skipping the public holiday pay that goes with it
- Treating the Civic Holiday as a required paid holiday when the ESA does not list it
None of these mistakes are malicious, but they add up across a team and across a year, and they are the kind of thing an Employment Standards claim will surface.
Keep it consistent
Write your holiday practices into a simple policy, apply the formula every time, and keep records of written agreements to work holidays. If your payroll provider or bookkeeper handles this for you, confirm they are using the ESA formula and not a shortcut.
This article is general information, not professional advice. For guidance on your specific situation, contact CAL Accounting at 705-728-6469.
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