Most workplaces in Ontario are covered under the Ontario Employment Standards Act (2000), which contains provisions about vacation and vacation pay. For workplaces covered under the Employment Standards Act (ESA), workers with less than 5 continuous years of service earn vacation pay at 4% of their earnings. The 4% must include all earnings for hours worked, such as overtime worked, but not payments for incentives or bonuses. Further, vacation pay does not accumulate during a leave of absence, as no hours are worked during this time.
Employees are entitled to see their vacation pay on their pay stub, and vacation pay may be paid throughout the year (ie. as wages are earned) or in a lump-sum (ie. at the end of the year or stub-period). Under the ESA, vacation pay entitlement increases to 6% after 5 continuous years of service, and 8% after 10 continuous years of service, with the same rules applying as stated above.
There are exemptions for certain workers and/or industries that are covered by legislation other than the ESA. For instance, a non-exhaustive list of professions that are not guaranteed vacation pay include fishers, landscape gardeners, chiropodists, dentists, massage therapists, naturopaths, optometrists, pharmacists, physicians and surgeons, physiotherapists, psychologists, and veterinarians. Your employer may always choose to provide an employee with benefits that are greater than what the law guarantees; however, employers may not offer less.