Vacation pay | DrumhellerMail
Last updateFri, 14 Jun 2024 6pm

Vacation pay


Dear Working Wise:

My employer recently started to pay vacation pay of 4% only on regular wages when earlier it was paid on regular plus overtime wages. Can you please clarify whether vacation pay is payable on only regular pay or regular plus overtime pay.

Signed, Vacation Cut Short


Dear Cut Short:


With the summer fast approaching, vacation pay may be a little more top-of-mind for those of us planning a summer getaway.


Your employer is right to pay you vacation pay only on your regular hours. Vacation pay is based on your regular wages, which do not include overtime, general holiday pay, unearned bonuses, gratuities, termination pay, expenses or allowances.


Vacation and vacation-pay entitlements are intended to ensure that you have a rest from work without loss of income.


Employees are entitled to two weeks of vacation with pay after one year of employment. After five years of employment, they are entitled to three weeks vacation with pay.


Vacations must be taken sometime in the 12 months after the employee becomes entitled to the vacation.


If you are unable to take your vacation, your employer can pay you vacation pay in lieu.


Employees who are paid by the hour receive vacation pay as a percentage of their wages.


"Wages" includes any previously paid vacation pay, but does not include overtime earnings, general holiday pay, pay in lieu of a notice of termination or an unearned bonus.


In the first four years of employment, minimum vacation pay is four per cent of earned wages. In the fifth and subsequent years, minimum vacation pay increases to six per cent.


Vacations must be given in one unbroken period unless the employee requests to take their vacation in shorter periods. This is permissible so long as those periods are at least one day long.


If a mutually acceptable time for the employee's vacation cannot be found, the employer can decide on the time. However, the employee must receive at least two weeks written notice of the start date of their vacation. The employee must take their vacation at that time.


Part-time employees

Part-time employees have the same vacation and vacation-pay entitlements as full-time employees. The one important distinction is that their vacation or vacation pay will reflect their reduced hours. For example, part-time employees who only work two days per week are entitled to four paid vacation days after one year of employment.


Construction workers

Construction workers are not usually given annual vacation time, but are entitled to vacation pay. All construction employees (full-time and part-time) must be paid vacation pay equal to six per cent of the employee's wages.


Other workers who are exempt from vacations and vacation pay entitlements:

·         employees on a farm or a ranch

·         salespersons working mainly away from the employer's premises who solicit orders for later delivery

·         professionals such as real estate brokers, and licensed insurance and securities salespersons

·         extras in a film or video production

·         employees covered by other Acts (e.g., academic staff)

·         municipal police officers


For more information on Vacation Pay entitlements, visit:


Do you have a work-related question? Send your questions to Working Wise, at Charles Strachey is a regional manager with Alberta Employment and Immigration. This column is provided for general information.


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