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statutory holidays

Correctly processing statutory holidays is a complex task in Canadian payroll. Not only are there significant differences between the employment standards requirements by jurisdiction, but there can also be wide variances among employer policies and practices. There often isn’t even agreement about what these days are called. In some jurisdictions, these are termed general or public holidays.

In an article of this type, it’s not possible to fully describe all the different requirements that apply, with the level of detail they deserve. However, what can be done is to define what payroll has to know about these.

As a first step, payroll must know which holidays in your jurisdiction are subject to employment standards requirements. Currently, one of the more reliable sources for such a list is Wikipedia. The next thing you must know are the exemptions that apply. In most jurisdictions, exemptions specific to statutory holidays are defined by regulation. CanLII is the best source for these.

While most employees are not in fact exempt, there may still be specific entitlement rules that have to be met. Such rules don’t exist in all jurisdictions, for example, there are none in Ontario. Where they do exist, they’re generally of two types: based on length of employment or on the number of days worked. BC has both types: to qualify, employees must have both been employed for at least 30 calendar days prior to the holiday and have worked on at least 15 of those prior 30 days.

Once employees are eligible, the basic entitlement is to statutory holiday pay. To calculate this properly, payroll has to know:

  • Whether this must be calculated as an average of prior earnings?
  • If an average is required, what earnings are included in the calculation?
  • Over how long a period are such earnings averaged?
  • What’s the divisor used in calculating this average?

The general rule is that statutory holiday pay is a daily rate, an average of earnings over a period of time prior to the statutory holiday. But that’s not always the case.

Some jurisdictions permit employers to pay employees what they would otherwise have earned for the pay period, so long as this isn’t reduced because of the statutory holiday. Under the federal Canada Labour Code, for employees paid by fixed salary, the only calculation required is splitting that amount between regular salary and statutory holiday pay.

In most other cases, a daily average has to be calculated. This means knowing which wages are included in this calculation. In some jurisdictions, this calculation includes all earnings covered by the employment standard definition of ‘wages’. In others, there are limits on what’s included. These limits can be on ‘regular wages’ or to the wages earned on a normal working day.


For example, in Ontario the wages used in this average are limited to ‘regular wages’, plus vacation pay paid within the averaging period. However, because of the base definition of ‘wages’ in Ontario, this calculation includes some variable or exception earnings, primarily non-discretionary bonuses and sales commissions.


The general rule is that the averaging period is a fixed number of calendar days or weeks. If weeks, you have to know whether the weeks used are Sunday to Saturday calendar weeks or can be employer-defined work weeks. For example, in BC this average is based on the earnings in the 30 calendar days before the statutory holiday. In Saskatchewan, this must be the 4 calendar weeks prior.

The two basic choices for the divisor used in calculating this average are, one, the actual days worked in the period and, two, an integer based on the length of the averaging period itself. For example, in BC earnings in the prior 30 days are divided by the count of days actually worked in this 30-day period. In Ontario, the earnings in the 4 prior work weeks are divided by a fixed 20.

Normally, for each statutory holiday, entitled employees receive two things: one, a day free from work, and, two, statutory holiday pay for that day, as described above. However, that’s not always the case nor is it always the only employer option.

In Alberta, employees only receive statutory holiday pay for days that would otherwise have been working days. For example, most statutory holidays fall on a Monday. Employees in Alberta who normally work Tuesday to Saturday have no entitlement to statutory holiday pay unless they either work the Monday or are away on vacation on that day.

Other than simply providing employees with a day off and statutory holiday pay, there are 3 other options:

  • The statutory holiday can be shifted, so it’s recognized on another day;
  • Employees can be given another day in lieu; or
  • The right to time off can be waived.

For example, in Ontario an employee with a Tuesday to Saturday work schedule may still be entitled to any statutory holiday that falls on a Monday but, instead of further time off, the employee may agree to simply being paid the statutory holiday pay owing.

However, payroll has to understand who has the right to exercise such options. In some circumstances, this right is solely that of the employer; in others this must be by agreement with each employee concerned.

If an employee actually works a statutory holiday, the pay for any hours worked must be calculated at time and a half, even if employees aren’t otherwise entitled to overtime for that week. In jurisdictions with daily overtime requirements, there may be a requirement to pay some of these hours at double time, such as in BC, for work past 12 hours. Further, where employees are not paid on a strictly hourly basis, other earnings must be included in the base rate that is multiplied by 1.5 or 2. For example, in Alberta, the time-and-a-half rate for work on a statutory holiday, has to take into account variable or exception pay such as sales commissions, shift premiums and non-discretionary bonuses.

Statutory holidays also interact with overtime requirements. To properly calculate overtime, when there has been a statutory holiday, payroll must know:

  • Whether the hours that would otherwise have been worked on a statutory holiday count against overtime thresholds;
  • Whether any hours actually worked on a statutory holiday similarly count; and
  • Whether weekly overtime thresholds change when statutory holidays occur.

For example, in Ontario the work week threshold for overtime is 44 hours. This threshold doesn’t change for statutory holidays. The hours that would otherwise have been worked and any hours actually worked on that day, don’t count towards either.

Syndicated content from author Alan McEwen for the Wagepoint blogThis article was originally published on the HR reporter blog.

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