Statutory pay covers the wages employees earn on public holidays — typically their regular pay plus 1.5 times their rate for every hour worked. But for small business owners, it’s not just about the math. The real challenge is keeping up with the provincial and territorial rules that decide which holidays are observed and how pay should be calculated.
New Year’s Day, Canada Day and Labour Day. These are all statutory holidays, also commonly called stat, public, civic, or general holidays. Collectively, statutory holidays are set by federal, provincial, or territorial law.
The 11 federally recognized statutory holidays are:
While the federal government sets the list of national civic holidays that apply to federal workers, in the private sector, the provinces and territories determine which holidays are observed and which employment standards apply. This means that while there are 11 federally recognized statutory holidays, there are differences in the ways each province and territory regulates employment standards for public holidays. There may also be civic holidays that are unique to a region, province or territory.
At its most basic level, statutory pay (stat pay) refers to the income an employee earns (or doesn’t earn) on a public holiday. For small businesses with employees, it also means understanding the rules and regulations that apply to you and your employees.
In most cases, most employees qualify for statutory holiday pay. However, two main factors affect civic holiday pay:
1. Location: Stat pay rules are determined by the province or territory where the employee does the work. If all of your employees are in Ontario, this means you follow Ontario’s rules. If you have some workers in Manitoba and some in Alberta, that means the Manitoba rules apply to the Manitoba workers and the Alberta rules apply to the Alberta workers.
2. Industry: There’s no one-size-fits-all for small businesses. Certain industries, like retail and hospitality businesses, as well as those deemed essential services, like pharmacies and tow truck drivers, may be subject to industry-specific holiday pay laws.
The best way to know the rules that apply to stat holidays is to check with the appropriate governing body:
Most workers get paid on statutory holidays. But there are exceptions, like Ontario’s Last and First Rule, which requires shift workers to work their last regularly scheduled shift before and their first scheduled shift after the holiday to qualify for public holiday pay.
Actually, employees who work on a stat holiday can choose one of the following:
Nope. Both hourly and salaried workers get premium pay.
Since the stat pay is calculated based on the number of hours in the prior four weeks, part- or full-time status is already taken into account. (See the next section for more on calculating statutory holiday pay.)
To know which option’s best, consult the provincial and territorial rules. Or connect with bookkeeping or human resources experts for further clarification.
There are two ways to calculate statutory holiday pay: manually or automatically. As you read on, you’ll quickly see which option stands out.
Statutory holiday pay calculations include both the rate of pay and the total number of hours you’ll have to pay the employee for on the public holiday.
To determine the rate of pay, you total all the employee’s regular pay for the previous four weeks, including any other vacation* and statutory holiday pay. Then you divide this by the number of days worked during those four weeks.
To do the math for the number of hours the employee gets paid for on the holiday, you take the total hours worked in the previous four weeks and divide them by the total days worked in the same period.
Then you multiply the rate of pay by the number of hours for the stat holiday.
It goes without saying that for manual calculations, you’ll need accurate payroll records, a good calculator, and a lot of patience.
Note: *As there are different ways to calculate vacation pay, you’ll also need to know which method you’ve been using.
Yes. It’s true, you can automate stat pay calculations. Huumans Payroll makes it easy. These kinds of processes are built into the software, so you can spend more of your time and energy on vital business decisions instead of mundane math.
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