Public holiday pay for Ontario restaurant staff: the nine holidays and how to work out the pay

Restaurants are often busiest on days when other businesses close, and Ontario's public holiday rules are some of the most misunderstood in the sector. Get the pay wrong and a complaint can be expensive. This guide sets out the basics, so you can plan payroll before a long weekend. It summarizes public sources and is not legal advice. The Ministry of Labour's guide and its holiday pay calculator are the authority.

Which holidays does Ontario's Employment Standards Act list?

Nine public holidays:

1. New Year's Day.
2. Family Day, the third Monday of February.
3. Good Friday.
4. Victoria Day, the Monday before 25 May.
5. Canada Day.
6. Labour Day.
7. Thanksgiving, the second Monday of October.
8. Christmas Day.
9. Boxing Day, 26 December.

The Civic Holiday in August, Easter Monday, Remembrance Day and 30 September are not on the list. Some employers give them as extra days by choice or contract, and your own policy or contract can be more generous than the law, never less.

Who qualifies for public holiday pay?

Most employees qualify, including part-time and temporary staff. The usual test is that an employee must work their last scheduled shift before the holiday and their first scheduled shift after it, unless they have a reasonable cause for missing one. An employee who skips a shift without a reason can lose the pay. Make sure schedules are posted early enough that the rule is clear.

How is public holiday pay worked out?

Guidance on the formula describes it as the employee's regular wages in the four work weeks before the week of the holiday, plus the vacation pay payable on those wages, divided by 20. Tips and other gratuities are not wages, and they do not count in the calculation. The Ministry of Labour provides an online calculator, which is the safest way to check a result.

For an employee who works variable hours, the average smooths out busy and quiet weeks. For an employee with a fixed schedule, the result may match a normal day's pay.

What happens when staff work on a public holiday?

An employee who works on a public holiday generally gets one of two arrangements:

• Public holiday pay plus premium pay at one and a half times their regular rate for the hours worked.
• Their regular wages for the hours worked, plus a substitute day off that is paid at the public holiday rate.

The choice needs to be agreed in the way the Act requires. Document it in writing, and record which option each employee has taken. A substitute day has to be taken within a set time frame, so put the date on the record.

Is there a special rule for restaurants?

The Employment Standards Act has special rules for some industries, including restaurants and hotels, about whether an employee can be required to work on a public holiday. Guides disagree on the detail, with some saying that employees in these industries can be required to work if the holiday falls on a normal working day, and others saying that written agreement is needed in many cases. Check the Ministry's guide for the current wording before you rely on either.

Should you charge customers a holiday surcharge?

Some restaurants add a small surcharge on holidays to help cover premium pay. If you do, show it clearly on your menu, your booking page and the bill before the customer orders. A surprise on the bill creates complaints. A surcharge belongs to the business and is not a tip.

How should you plan payroll for a holiday?

1. Mark the holidays on your schedule at the start of the year.
2. Decide whether you will open, and tell staff early.
3. Work out holiday pay in advance for staff who will be off, and premium pay for staff who will work.
4. Record any substitute days and the date they are taken.
5. Check part-time and new employees for eligibility.
6. Keep the payroll records for the period the law requires.

What are the most common errors?

• Treating tips as part of regular wages.
• Forgetting vacation pay in the calculation.
• Paying part-time staff nothing because they do not work the day.
• Not recording the substitute day.
• Assuming a holiday-closed day counts as a normal unpaid day.

What if you get it wrong?

Employees can file a complaint with the Ministry of Labour. The Ministry can order payment, and repeated or serious problems can lead to penalties. Correct mistakes quickly, and keep a record of what you changed.

More guides for your business:

• AODA website rules for Ontario restaurants: who must meet WCAG 2.0 AA and what to fix first
• Smart Serve in Ontario: who in your restaurant needs it and when
• WSIB registration for Ontario restaurants: do you need it, and when to register

More in the Canadian guides for food businesses.