Types of PTO In Canada

As a Canadian business owner, you’ll probably be aware that your employee’s are entitled to Paid Time Off (PTO). From vacation to sickness, such paid breaks can be taken for a variety of reasons. However, eligibility requirements and time-off period varies across Canadian jurisdictions..

So, how does paid time off work and what if your employees need to take time off for other reasons?

Thankfully you can count on us as we cover the different types of paid leave and point you toward our more comprehensive guides in this article.

Paid vacation

Employment standards legislations across Canadian jurisdictions requires employers to give their employees a certain period of paid time off (vacation time) after having completed their vacation year (at the end of the vacation year. For example, if you run a federally regulated business and your employee has worked for you for at least a year they will be entitled to a certain amount of paid leave for rest and recuperation.

This begins with cover for two weeks (10 working days) of annual vacation after employment for 12 consecutive months. After 5 years with your business, there’ll be an entitlement to 3 weeks. And this will increase to 4 weeks after 10 years of employment.

It is important that you’re familiarized with Employment Standards legislation in your jurisdiction as the period of paid vacation time entitlement varies.

Generally speaking, paid vacation may be taken at a time that’s been agreed with you as their employer. However, employees must communicate their vacation request to their employer with at least two weeks' notice for such an agreement to be made. You may allow for the vacation to be taken in a single block or specify that it has to be spread out given the likely business impact.

For more information about annual paid vacations for your employees, see Paid Vacation.

Unauthorized Leave

An unauthorized absence is when your employee takes leave without advanced warning or your agreement. So, it technically doesn’t apply to PTO.

However, it shouldn’t be assumed that any employee who takes such leave should automatically be in the wrong. After all, they may be forced into an unplanned absence as a result of sickness, emergency care of dependents, or adverse weather conditions that make it unsafe to travel. The appropriate response will vary depending on the reason and how your employee acts in the event of unauthorized leave. In the first instance, contacting the employee and checking their welfare will be vital. If there isn’t an emergency and the absence isn’t authorized under your company’s attendance policy, then disciplinary action may be taken.

For more information about the appropriate management of unauthorized leave, see our article Mastering Unauthorized Absence.

There are several job protected leaves your employees are entitled to in line with employment standards in most Canadian jurisdictions. Many employers often wonder if it’s their responsibility to pay for these leave types which we will explore in further detail below.

Sick leave

If an employee falls ill or sustains an injury that prevents them to work as usual, then they’ll be entitled to sick leave.

However, eligibility requirements, amount of time that may be taken, and pay received will depend on the Canadian jurisdiction that your business is based within. It’s best practice to seek advice from employment relations experts to make sure you remain on the right side of the law.

You should know that Employment Standards legislation in most Canadian provinces do not prescribe paid sick leave. However, many employers do provide their staff with paid sick leave as part of their benefits package.

Employees can take partial sick leave instead of taking a full day off work. However, you should note that not all Canadian jurisdictions allow for partial sick days. In Ontario, while employees can take partial sick day leave, the employer is entitled to count them as a full day of sick leave.

You may allow for more than the legal minimum as part of your employee’s benefit package. Such provisions should apply regardless of whether an employee is working for the same company in different Canadian provinces. Such provisions should be detailed in the employment contract or collective agreement and made available from the first day of employment.

Employers should note that employees on long-term sick leave continue to accrue vacation time while they are on a job-protected statutory leave of absence. In such a case the job-protected leave does not constitute a break in an employee’s continuity of service. As a result, the employee’s time on leave still counts towards their vacation time accumulation.

For more information about handling your employees’ sick leave, see our article Navigating Sick Leave.

Compassionate care leave

Your employees are legally entitled to compassionate care leave for the support of gravely ill family members. This includes but isn’t limited to the care of a spouse or common-law partner, children, siblings and other close relatives.

While there’s some variation across Canadian jurisdictions, the general compassionate care allowance extends to 28 weeks within a 52-week period. Up to 37 weeks may be taken for the care of a critically ill child, with up to 17 weeks for the care of a critically ill adult. Again, we recommend checking your specific jurisdiction guidelines for compassionate care leave in Canada.

Compassionate care leave may be taken at any point within the 52 weeks and separated into multiple blocks as needed. However, such leave may only be granted after showing the employer a certificate confirming that the family member is at significant risk of death. While there’s no legal requirement to provide paid compassionate leave this is common practice.

For more information on compassionate care leave in Canada, see our article Compassionate Care Leave.

Bereavement leave

Your employees are also legally entitled to take bereavement leave following the death of a family member. You aren’t legally required to make paid provisions for bereavement leave across every Canadian jurisdiction.

For example, Ontario’s Employment Standards Act (ESA) doesn’t specify the need to provide paid bereavement leave cover. However, if you are a Federally regulated Employer, under the Canada Labour Code you must grant paid bereavement leave to your employees.

There’s also some variation in the categorization of immediate family members across Canada. So, be sure to check the Employment Standards legislation in your jurisdiction to review the applicable requirements for bereavement leave.

And while you don’t have to make paid provisions, offering such or other forms of support in a situation where your employee needs to take bereavement leave can help.

For more information on bereavement leave, see our article Bereavement Leave: Advice for Canadian Employers.

Pregnancy leave

As a Canadian employer, you must grant a period of job-protected maternity leave leading up to and directly after childbirth. Again, there’s some provincial variation, with federal employees legally entitled to take up to 17 weeks of pregnancy leave.

There’s also a legal allowance for parental leave, with a father entitled to five weeks' absence after a child has been born or placed with their family for adoption.

Although you aren’t legally required to provide paid cover for pregnancy leave, such a provision is commonly included within employee benefits packages. Your employees may also be eligible for the arrangement of financial support in the form of Employment Insurance (EI) for pregnancy and parental leave. In this case, the employee may be granted 55% of their weekly earnings, up to a maximum of $668 per week.

For more information about maternity leave in Canada, see our article on Maternity Leave.

Parental leave

Recognizing the importance of parental-child bonding time, the Canadian authorities have set some of the most generous parental leave allowances in the world.

There’s a standard leave allowance of up to 40 weeks and an extended period of up to 69 weeks which can be shared by the parents. 5 of these weeks are specifically meant for Dads to take time off work to care for their newborn also known as “daddy days”.

Employers don’t have to offer paid-for paternity leave, given that it’s covered by Employment Insurance (EI). However, the parents must make separate applications, with the level of paid cover depending on the choice of standard or extended leave.

The standard benefit rate is 55% of the parent’s average weekly insurable earnings up to a maximum of $668 a week before taxes. And the extended benefit rate is 33% of the parent’s average weekly insurable earnings up to a maximum of $401 a week before taxes.

You should note that employees continue to accrue vacation time while they are on a job-protected statutory leave of absence. Employers must understand that a leave of absence does not constitute a break in an employee’s continuity of service. Thus, time on leave counts towards the accumulation of vacation time entitlements.

For more information on Canadian paternity leave rights, see our article on Paternity Leave.

Time-saving support from BrightHR

Hopefully, you’ll now have a better understanding of Canadian leave types, including those allowances that fall under and outside the umbrella of PTO.

It’s important to recognize the range of benefits associated with the granting of such leave types. Even if you aren’t required to make leave payments under law, such provision is bound to have a positive impact on employee satisfaction and commitment.

Arrange your leave policies in the knowledge that rested employees are most likely to be engaged and productive.

You can simplify managing unpaid leave and PTO with BrightHR's staff vacation planner and absence management tools. From the identification of request clashes to the monitoring of staff allowances, BrightHR will save you time and headaches. Go ahead and book your free demo today!