Planning a Vacation This Year? Don’t Bank on It.

Bella FonsecaOctober 26, 2021October 26, 2021

Blue skies, sunshine and white sandy beaches . . . It’s what you dream about to get through the long, cold winter. But if you had any travel plans in 2020 (or even 2021), chances are they were cancelled.

COVID-19 has clearly impacted both our work and our vacation schedules. According to a May 2020 Robert Half survey, 30% of Canadian employees surveyed were planning to take fewer days off in the summer months compared to the previous year, 27% were saving their vacation time for later in the year and 20% said they would like to take a vacation but were tightening their belts due to the pandemic.

And while travel has started to pick up since vaccines have become more widely available, we still aren’t back to our normal travel patterns. For example, in a May 2021 Leger survey, more than half (54%) of Canadians said they were very or somewhat unlikely to take a summer vacation this year.

Give Me a Break

When it comes to vacation, there are minimum standards under the employment legislation for each province as well as federally under the Canada Labour Code. In a number of jurisdictions, the minimum requirement is two weeks of vacation for those with up to five years of service and three weeks thereafter. Of course, employers may offer extra time off as a means of attracting and retaining talent—an incentive that has become even more valuable in today’s fluid labour market. A 2020 survey of 1,000 Canadians by Rakuten.ca found that, given a choice between a pay increase or more paid vacation days, most Canadians (57%) would choose the time off.

At a time when many are still unable or unwilling to travel, deferring vacation and banking the days might seem like a good strategy for employees, but it’s a real concern for employers. Why? Because an employer must pay employees for any accrued and unused vacation when employees leave the organization. If a lot of employees are banking a lot of vacation days, then the organization could be carrying a significant liability on their balance sheet.

The Employer’s Role

So can you force employees to take vacation? Technically, yes—but just because you can doesn’t mean you should. An employer does have the authority to require an employee to take vacation and can even schedule it for them. However, it’s important to consider the impact that those actions could have on employee morale.

Some employers have a “use it or lose it” provision for vacation. However, this can only apply to vacation over and above the minimum legislated requirements. If an employer introduces this type of policy, the policy applies on a go-forward basis to vacation over the statutory minimum—not to vacation that an employee has already accrued.

With all this in mind, here are a few action items for employers when it comes to vacation time:

Recognize the benefits of taking time off. There’s a reason why vacation is such a highly valued benefit among employees. Particularly in sectors that are dealing with labour shortages and burnout, time off can provide a much-needed mental and physical break and may even reduce turnover for your organization.
Ensure you have a documented policy around vacation carryover and that it has been clearly communicated to employees. Employees need to know the rules and the employer’s expectations.
Consider introducing a process to encourage employees to use up accrued vacation and limit vacation carryover in the future. This will help limit the liability going forward.
Make sure your culture supports truly disconnecting while away from work. Especially for those working remotely, it can be easy to fall into the habit of checking email at midnight or working on Saturday to finish a big project. But, in the long term, an “always on” work culture won’t benefit the employee—or the employer.
Be flexible and engage with employees. We are all still dealing with the impacts of the pandemic, so rather than taking a hard stance on using vacation, take the time to listen to employees and make reasonable efforts to be fair and flexible. Working together toward solutions that meet both the employee’s and the employer’s needs will yield better long-term results.