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welcome to employee termination tips my name is christopher neufeld the newfound legal and in this particular video we're going to be discussing earned vacation days and how they impact canadian employees in particular those who have been terminated or fired from their job and the first thing to know about earned vacation days and what this represents to your termination package and your overall compensation from your former employer is that earned vacation days do not exist in canada the concept is an american concept it is not a canadian concept as such when you are looking at a pay statement and you're dealing with earned vacation days and you're being paid out for your earned vacation days you really need to question the situation and ask yourself are you being paid correctly with respect to your vacation and if you aren't being paid correctly with respect to vacation what else might be wrong with respect to your pay and your compensation owing now that you've been terminated and you can effectively pursue your employer so let's take a step back first of all and look at the concept overall what we're talking about is an all too common concept that has been passed down apparently through payroll practices and payroll software that emanates out of the united states and from the larger american companies in that they calculate earned vacation days over time which is very common in the united states of america however if you're employed in canada you will probably look at your provincial employment standards legislation and when you look at it you will be surprised to find that there is not the concept of earned vacation days there are two concepts there is a concept of vacation time meaning time you're entitled to take off in association with vacation and there is the concept of vacation pay which is typically premised on a calculation of wages and other components depending on the province and is paid out either just prior to one's annual vacation or if agreed upon with the employer in a structured fashion over time so when you see the aspect of earned vacation days which is you accumulate days off that are fully paid and if you don't use all your allotted earned vacation days you are entitled to get paid for them well if that is a situation with yourself you might be legally entitled to them by contract the question is are they sufficient do they cover all the aspects that are due to you have they met the statutory minimum because the concept is not written into the law at least not in canada so what you have is effectively a perversion of the law and this perversion or reconstruction has become very commonplace in our observations because of the fact that u.s payroll systems and u.s payroll software pervades in canada it's a far more efficient means to operate stuff to just simply go to a foreign payroll software that is inexpensive commonplace often one component of many parts of human resources and results in lower numbers being paid out and why do i say it results in lower numbers being paid out because in many instances it effectuates payments of vacation pay that are under the statutory minimum even during the course of one's employment because remember how i mentioned that vacation pay is based on wages and potentially other components well only one component of wages by itself is one's hourly pay are other components that go into wages and there are components above and beyond wages that might well go into the number that is used to calculate one's vacation pay on a year-over-year basis and as such if one's an hourly employee it's entirely possible when you see this manipulation of the system this reliance upon american law in one aspect you're going to come across reliances upon american law and american practices in other aspects which are going to result in your potentially being underpaid because just because your employer indicates that you're getting paid 25 an hour it does not mean that your vacation is eight hours at 25 an hour no that is not how it works the base number that's being utilized is in fact these wage numbers which include various other components based upon the province within you which you're working so those components could very easily include allowances that you're entitled to premiums that are paid to you employer contributions health and safety pension rrsp and even some provinces the previous year's vacation pay can be a component part in this whole calculation so when you look at it from the hourly perspective it is but one component of a larger picture and because of that you could find yourself getting underpaid and having this occur year after year after year and you say to yourself wow it's year after year how far can i go back and collect well if you're going to go to employment standards employment standards are a very controlled process very strong limitations and they're restricted to the last two years nevertheless what the courts are able to do is far greater because there are other provisions in employment standards legislation which says vacation paid a minimum and often time all of wages that have been earned by an employer held in trust so you could effectively be going back and pursuing your vacation pay for many years not just two years if you worked for a company for 10 years it's entirely possible you could argue and have the legal justification to get 10 years of underpayments of vacation pay and now i'm going to move on to the very scary part of vacation pay scary in the sense that if you miss this aspect you could be out of a lot of money and that pertains to salaried employees because when you operate in the united states on the earned vacation day system you're operating on the basis that you have vacation as part of your salary and this comes a lot in turn from the fact that salary and is dictated by contract employment laws are dictated by contract the united states contracts play a role in canada but they cannot go below the statutory minimums of canada unfortunately for canadians employment standards are more protective of employees in canada than is the case in the united states so i want you to get rid of their concept of earned vacation days you simply look at the fact that you have vacation days that are due to yourself you're on salary you're entitled to receive the entirety of the salary unless there is a contractual arrangement between you and the employer to reduce your salary in certain circumstances and even then because of the unequal imbalance in power between employer and employee that might not even stand so once you consider your salary you need to have been paid the entirety of your salary that is your legal entitlement contractual right and you have no deductions from it until the next phase you don't take you don't reduce salary you can deduct from salary but one of the things you're typically not allowed to deduct from salary is one's vacation pay and likewise one's general holiday or statutory holiday pay these amounts in most provinces there are some questions in british columbia as to how the wording is and how the government postulates on certain aspects of it but in provinces such alberta and other provinces vacation pay statutory holiday pay is separate and distinct from one's salary the courts have come down on this you can try to write it out but if it's not written out and the writing out might not even succeed it is a separate component so you cannot effectively deduct it or count against one salary when paying those amounts so by the sake of example if an individual is owed a hundred thousand dollars in salary they need to be paid a hundred thousand dollars a salary and then paid their vacation pay let's say six percent and then paid their statutory holiday or general holiday pay of four percent so we're talking about is a hundred thousand dollars six thousand dollars and four thousand dollars in canada in the united states should be able to actually effectively with earned vacation days offset it as against the time that is not being worked so that your offsets will result in a net of a hundred thousand dollars in canada however subject to other adjustments which are typically upwards you're actually gonna be looking at at least a hundred and ten thousand dollars but there you come into the problem of the software american software that effectively braces out the vacation pay braces out the statutory holiday pay and leaves you with the net hundred thousand dollars before deductions all things being equal and that works fine in the united states once again it does not work in canada that is not the law in canada you're not dealing with earned vacation days once again you're dealing with vacation pay and you can't simply calculate vacation pay on the basis of how americans do things you have to do it on the basis of studying canada and more specifically on the province in which you are employed and you when you operate on the province in which you are employed and you actually correctly do this you're looking at payments 100 000 in excess of ten thousand dollars if you're on a salary of fifty thousand dollars you're looking at under payment in excess of five thousand dollars and so on and so forth so there are justifiable numbers to pursue [Music] and once again going back to our last comment with respect to statute of limitations employment standards officers those are limited but once again most of the provinces put into place trust provisions that protect and employees earned wages and more specifically in all almost every circumstance their earned vacation pay so that if ten years back you were earning a hundred thousand dollars i'll just say it stayed constant for ten years and let's say all things being equal we're not looking at any other numbers you got underpaid ten thousand dollars in combined vacation pay and statutory holiday pay year over year that's a hundred thousand dollars in that money alone that's owed to yourself from a vacation standpoint it's at least six thousand dollars in vacation pay that's owed to yourself now you're gonna think that's a bit ridiculous and how do they not pick this up and why does nobody address it i can't give you the answer for that other than to say people have fought it on an individual basis within the limitations employment standards and thus within the confines of the two-year period and from everything that we've read and everything we've seen and consistent with the statute and consistent what the law says that entitlement is there people have succeeded when they fought for it but too few people have fought for it it's because there's a lack of understanding as to the concept of vacation pay as opposed to earned vacation days and i see it all the time you see in the contracts of the biggest companies in canada well a lot of those big companies are actually american and they put it down and nobody picks up on it and nobody deals with it and what happens people operate on that system if they don't pick it up they leave considerable amounts of money on the table so whether you're hourly employee or a salaried employee remember in canada you do not have earned vacation days instead you have vacation time and you have vacation pay and because of the misapplication of the one for the other it's highly possible that in both circumstances you could find yourself significantly underpaid and when you've been terminated or fired from your job and you're looking at the paperwork that you have you go look back at your contract you look at if you get a section 14-5 request put in and you get some answers on it and you see something talking about earned vacation days and you're questioning your payroll and question what you're owed this is where you should be looking among other things because all too often all too frequently people are not getting paid vacation pay or if they are in the hourly circumstance their vacation pay is being miscalculated and underpaid but as you say with respect to those salaried employees the situation is even worse in the fact that too often what we are seeing is that by using the u.s system of earned vacation days people are getting underpaid significantly year over year over year and when it comes time to get and they lose their job if you don't collect upon it you're not gonna get it and simply because nobody's paying attention to it it's your responsibility to look into it it's your responsibility take a look at it because your boss clearly doesn't know what's happening they look at the payroll software it seems to all be operating fine you have to take onus you have to take responsibility and you have to pursue the vacation paid that you are due because it's a vacation pay not earned vacation days that you were due it's probably gonna be a lot of money especially if it's due from years back also thank you