Act respecting labour standards Chapter IV - Larbour standards (Section 39.1 to 97)

Calculation of indemnity

For each statutory general holiday, the employer must pay the employee an indemnity equal to 1/20 of the wages earned during the four complete weeks of pay preceding the week of the holiday, excluding overtime. However, the indemnity paid to an employee remunerated in whole or in part on a commission basis must be equal to 1/60 of the wages earned during the twelve complete weeks of pay preceding the week of the holiday.

Interpretation

This provision establishes the method for computing the indemnity payable under this Division, which has been simplified since May 1, 2003. Moreover, a greater number of employees have become eligible for the payment of the indemnity (see the interpretation of section 65 ALS).

The indemnity calculation method is the same as that of section 4 of the National Holiday Act for the national holiday leave.

Calculation of the indemnity

The employee must receive, for each statutory holiday, an indemnity corresponding to 1/20 of the wages earned during the four complete weeks of pay preceding the week of the holiday, excluding overtime. Overtime is determined on the basis of the employee’s regular workweek or, failing that, the regular workweek provided for under the Act or the regulation.

In the case of an employee remunerated in whole or in part on commission, the indemnity is equal to 1/60 of the wages earned during the twelve complete weeks of pay preceding the week of the statutory holiday, without regard for the amount of the commissions. In this case, the wages earned correspond to the basic wages (where such is the case) and the commissions earned during the twelve-week period, even if they are not yet paid to the employee.

Annual leave periods are assimilated with days worked for the purposes of the calculation. The indemnity received in this respect during the reference period constitutes wages and must be taken into account in the calculation of the statutory holiday indemnity. (See the definition of “wages” of paragraph 9 of section 1 ALS).

The computation is based on the wages earned during the reference period, regardless of the number of days or hours actually worked by the employee. If the employee did not work complete weeks during the pay period, the indemnity of 1/20 of the total wages earned for this period will be less than that paid to the employee who worked full time during the entire period.

Examples

An employee is remunerated at an hourly rate of $12.50. He always works 8 hours per day.

1. Full-time employee

   The employee ordinarily works 5 days per week. He receives a regular pay of $500 per week and will receive an indemnity of $100.
   $500 x 4 weeks = $2 000
   $2 000 ÷ 20 = $100

2. Employee with an irregular shedule

   The employee works 5 days the first week, 4 days the second week, 5 days the third week and 2 days the fourth week. Consequently, his pays are not always of the same amount. He will receive an indemnity of $80.
   $500 (week 1) + $400 (week 2) + $500 (week 3) + $200 (week 4) = $1 600
   $1 600 ÷ 20 = $80

3. Employee having worked only two of the four weeks

   The employee works 5 days per week, but has only been in the employ of the undertaking for two weeks. He receives a regular pay of $500 per week. He will receive an indemnity of $50.
   ($0 x 2 weeks + $500 x 2 weeks) = $1 000
   $1 000 ÷ 20 = $50

4. Employee having worked overtime

   During the four weeks preceding the week of the leave, the employee works 6 days per week for a weekly total of 48 hours. The regular 40-hour workweek of section 52 of the Act applies to the worker, who will receive an indemnity of $100.
   40 hours x $12.50 per hour = $500 (weekly wages, without overtime)
   $500 x 4 = $2 000
   $2 000 ÷ 20 = $100

1979, c. 45, s. 62; 1990, c. 73, s. 20; 2002, c. 80, s. 20.