Vacation pay and sick days for Ontario restaurant staff: 4 percent, 6 percent and no medical note

Most restaurant teams include people who have worked for you for two weeks and people who have worked for you for ten years. The vacation and sick leave rules treat them differently, and getting the line wrong is a common reason for a complaint to the Ministry of Labour.

How much vacation time do staff get?

Under the Employment Standards Act, an employee with less than five years of employment gets two weeks of vacation time per vacation entitlement year. An employee with five or more years gets three weeks. A contract can give more. The standard entitlement year is the 12 months from the hire date, and an employer can set an alternative year with a prorated "stub period" before it begins.

How much vacation pay?

Four percent of gross wages, excluding vacation pay, earned in the entitlement year for an employee with under five years of service; six percent at five years or more. An employee who reaches five years partway through the year gets six percent for the whole year. For a part-time server on an 18,000 dollar year, that is 720 dollars at four percent.

When you work out the wages, remember what counts as wages. Tips paid by customers are not paid by you, but a service charge you distribute is. See Ontario's tip law, and for how tips reach your payroll, tips on payroll.

When must vacation be taken, and paid?

Vacation must be taken within 10 months after the entitlement year ends. Under five years, the two weeks can be taken in one block or two one-week blocks; at five years, three weeks in a block, a two-week and a one-week block, or three one-week periods. Shorter periods are possible if the employee asks and you agree in writing or electronically.

Vacation pay is usually paid as a lump sum before the vacation. The exceptions are periods under one week, pay accrued on each paycheque by a written or electronic agreement, and any other time the employee agrees to in writing or electronically. When employment ends, unpaid vacation pay is due within seven days or on the next regular pay day, whichever is later.

How many sick days?

Most employees are entitled to up to three unpaid, job-protected days per calendar year for their own illness, injury or medical emergency. They need not be consecutive and they do not carry over. The right starts after at least two consecutive weeks with you, and it is not prorated, so a part-timer hired in October still gets three days for the rest of the year.

Can you ask for a doctor's note?

No. Since 28 October 2024, an employer cannot require a certificate from a qualified health practitioner (a physician, registered nurse or psychologist) to prove an employee is eligible for sick leave. You may still ask for medical documentation for other purposes, such as accommodation or a return to work.

What about a part day?

If an employee leaves early because they are ill, they can take the rest of the day as sick leave. You may count it as a full day against the three-day limit, but you must pay for the hours already worked. Oral notice is enough, and a missed notice does not cost the employee the right.

How do tips and service charges fit into the pay?

Vacation pay is a percentage of the wages you pay. Tips that customers hand directly to staff are not wages from you, so they do not add to the base. Be consistent in your payroll and keep a written note of how you treat each type of pay, because when a complaint arrives, the Ministry will ask how the vacation pay was calculated and what it was calculated on. If your accountant has a different view of a particular payment, such as a service charge you collect and share out, ask for it in writing.

Making it work in a restaurant

1. Record each person's start date and entitlement year.
2. Calculate 4 or 6 percent from payroll, and keep a running balance.
3. Plan summer vacation by October, not June.
4. Write the sick-day policy in the staff handbook, with "no note needed".
5. Pay public holidays correctly: see Ontario public holiday pay.

On scheduling limits, read shift rules and the three-hour rule. If you hire for the summer, hiring teenagers covers the ages that apply.

More in the Canadian guides for food businesses.