Avoid costly errors this Canada Day and Civic Holiday. A quick guide to statutory holiday pay, scheduling, and substitute holidays under Ontario’s ESA, including detailed rules on Civic Holiday. 

Long weekends are a cherished part of Canadian summers, and unofficially define summer itself. While for many employees summer long weekends mean the opportunity to get away to cottages, camping and road trips, for Ontario employers, these weekends come with statutory holiday pay obligations under the Employment Standards Act, 2000 (ESA). 

Non-compliance with ESA statutory holiday pay rules or improper employee scheduling can lead to Ministry of Labour complaints and penalties. This guide outlines key considerations to ensure your practices are compliant.

Statutory Holidays

Statutory Holidays, also referred to as Public Holidays, are paid holidays established by law. Where the date lands on a weekend, the following workday is usually observed as the holiday. 

Each province and territory in Canada recognizes statutory holidays. While some are common across Canadian jurisdictions, others are unique to the province or territory. For employers with multiple locations, it is important to know the entitlements of the employees at each of your locations. 

Statutory Holidays in Ontario 

• New Year’s Day

• Family Day

• Good Friday

• Victoria Day

• Canada Day

• Labour Day

• Thanksgiving

• Christmas Day

• Boxing Day 

Note on Civic Holiday: Although many workplaces observe the first Monday in August as Civic Holiday, it is not a statutory holiday under the ESA. However, some employers may have implied obligations based on past practice (See discussion below). 

Eligibility for Public Holiday Pay

Most employees are entitled to statutory holiday pay regardless of whether they are classified as full-time, part-time, temporary or contract. There is no minimum length of employment to qualify for statutory holiday pay. 

Employees are eligible by default, unless one of the following reasons apply:

1. The employee failed the “First and Last Rule” which requires an employee to work all of their last regularly scheduled day/shift before the statutory holiday and all of the first regularly scheduled day/shift after the holiday, unless the employee has a “reasonable cause” for absence; OR

2. The employee agreed to work on the statutory holiday and failed to work their full shift without “reasonable cause”.

“Reasonable cause” refers to any reason for missing work for reasons beyond the employee’s control, such as illness, injury, transportation issues, or emergency situations.

Calculating Public Holiday Pay 

Public Holiday Pay

= (regular wages in the preceding 4 weeks + vacation pay payable in the preceding 4 weeks) ➗ 20

• “Regular wages” do not include overtime, premium pay, leave pay, vacation pay, or other public holiday pay

• “Vacation pay” refers to any vacation pay the employee received during the 4 weeks preceding the week in which the public holiday falls.

It is crucial to verify your payroll system's accuracy in applying this calculation.

Part-Time and Hourly Employees: Equal Entitlement

A common oversight is forgetting that part-time and hourly employees are fully entitled to public holiday pay. Prorating their holiday pay is not permissible unless a compliant formula is used.

Working on a Public Holiday

Most employees are entitled to statutory holidays off with pay. However, if an employee in most industries agrees electronically or in writing to work on the holiday, there are two options:

Option A: Premium Pay

• The employee receives premium pay plus public holiday pay. 

• Premium Pay is calculated as 1.5x the employee’s regular rate of pay. 

• The employee would NOT receive a substitute holiday.

Option B: Substitute Holiday

• The employee receives a substitute holiday on another working day in lieu of the public holiday.

• The substitute holiday must be agreed upon by the employer and the employee and must be scheduled within 3 months absent a written agreement, or within 12 months if agreed upon in writing or electronically by the employer and the employee. 

• Substitute Holidays are paid as public holidays in the pay period in which they are elected to fall. As such, an employee working on a public holiday would receive their regular pay, and would not receive premium pay or holiday pay.

In certain industries—hotels, restaurants, hospitals, nursing homes, or continuous operations—employers may require work without employee agreement, but must follow either option above.

Avoiding Common Public Holiday Mistakes

Employers should be vigilant to avoid these frequent errors:

• Incorrectly classifying public holidays as "floating" days off.

• Assuming contractors or interns are exempt from holiday pay (unless they are genuinely independent contractors).

• Failing to provide the required substitute holiday days off.

Civic Holiday (First Monday in August)

• Under the ESA, Civic Holiday is not included among statutory holidays, so there is no automatic entitlement to take it off or receive holiday pay.

• However, if you’ve historically given the day off or paid for it, employees may argue it is an implied term of their employment, risking constructive dismissal claims if revoked.

• Best practice for employers who wish to change Civic Holiday expectations:

• Provide advance notice;

• Update employee contracts or handbooks; and,

• Maintain consistent application.

Getting Summer Long Weekends Right

To get holiday long weekends right:

1. Communicate clearly in contracts whether Civic Holiday is given.

2. Calculate public holiday pay correctly using the 4‑week average formula.

3. Obtain clear written agreement if employees work on statutory holidays.

4. Track substitute holidays to ensure compliance with ESA timelines.

These steps will help you reduce ESA compliance risks and maintain workplace goodwill during Canada Day, Civic Holiday and Labour Day celebrations. 

Need help updating your holiday policy or drafting written agreements? Workly Law is happy to assist.

This article is for informational purposes only and does not constitute legal advice. For guidance specific to your workplace, consult legal counsel. 

 

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