CANADA Law and Practice Contributed by: Christopher Pigott, Rachel Younan, Jacob Wagner and Felisha Jagiah, Fasken
aging” agreements that allow for hours of work to be averaged over a period of several weeks for the pur - pose of determining entitlement to overtime pay. 1.4 Compensation Each jurisdiction in Canada, including the federal juris - diction, has enacted legislation providing for a mini - mum wage for most full-time, part-time, and casual employees. The minimum wage is typically adjust - ed by regulation on an annual basis. If a provincial minimum wage rate exceeds the federal wage rate, employers must pay the higher of the two. In addition to providing employees with their base wage or salary, employers in Canada often provide end-of-year bonuses to employees or offer employees the opportunity to earn performance-related pay to motivate productivity. Grants of shares, stock options and profit-sharing programmes are also common for executive-level employees. Employers may be liable to provide payment on account of any bonus, performance-related pay, or other perquisite that an employee would have received had they continued to be employed during either the statutory or reasonable notice period (see 7.2 Notice Periods ). Courts will consider whether the applicable perquisite formed part of the employee’s compensa - tion package or was simply provided at the employer’s discretion on occasion. Carefully drafted employment contracts and policies may serve to limit such pay - ments during any reasonable notice period, so long as statutory requirements are met. Such terms are typically included in executive employment contracts where perquisites may be a significant component of the executive’s compensation. Compensation Beyond minimum wages, some jurisdictions have enacted legislation regulating executive compensa - tion in the public sector. That legislation typically pre - scribes requirements for public disclosure, caps on salary and performance-related pay, signing bonuses, severance payments, etc. By contrast, executive compensation in the private sector is not specifically regulated by employment law. However, certain corporate, securities and tax laws
governing compensation (particularly where com - pensation includes grants of shares and options) as well as board requirements and shareholder approv - als may be triggered and must be considered when determining the compensation of executives. Equal Pay Various federal and provincial governments have enacted pay equity legislation to achieve equal pay for work of equal value. Federally regulated public and private sector employers with ten or more employees must develop a pay equity plan to address gender- based pay inequities as of September 2024. Provin - cially, pay equity is legally required in separate pay equity legislation for the public sector in Manitoba, Nova Scotia, New Brunswick and Prince Edward Island and for the public and certain private sectors in Quebec and Ontario. 1.5 Other Employment Terms Vacation and Vacation Pay In each Canadian jurisdiction, employees are entitled to paid vacation. Most often, employees are initially entitled to a minimum of two weeks of paid vacation per year. However, employers commonly provide their employees with a total of three to four weeks’ paid vacation per year. Many jurisdictions have tiered vacation allotments, whereby employees with three or more years of service can be entitled to three weeks of vacation. Furthermore, many jurisdictions entitle employees to vacation pay dependent on length of service and usually equal to a percentage of accumulated wages earned per year, such as 4% to 6% for Ontario, British Columbia, and Quebec. In addition, public holidays are also prescribed by fed - eral, provincial and territorial employment standards legislation. Employees are generally entitled to take public holidays off with regular pay. However, employ - ees can agree to work on a public holiday and will normally be entitled to receive a day off in lieu of the public holiday or be paid at a premium rate for hours worked that day. The Canada Labour Code was amended to add a tenth paid holiday, designated as the National Day for
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