At a few jobs I've had there's been a small amount on my pay stub called "Vacation Payout". What exactly is this? I tried reading the legislation but am confused. Is it basically saying each paycheck has to be increased by 4%? Can someone please add the background idea for why this exists?
When someone is terminated with severance, should this 4% be included in the calculation in anyway?
What exactly is this? ... Can someone please add the background idea for why this exists?
Basically, vacation pay is a sum of money that you get when you take your vacations, the intention is that you use that money to travel, do house renovations, or another activity during your downtime, hence it being paid at least 7 days before your vacation per 58. (2) (a).
Is it basically saying each paycheck has to be increased by 4%?
It does NOT automatically mean that your paycheck is increased by 4% unless agreed in writing between you and your employer individually (i.e. in your work contract) or collectively (i.e. collective labor agreement), as written on 58. (2) (b)
When someone is terminated with severance, should this 4% be included in the calculation in anyway?
Yes. If you are employed for more than 5 calendar days, you're entitled to 4% of total wages as vacation pay per Policy Interpretation Subsection 1, payable within 48 hours of termination if the employer terminates (i.e. you're fired or dismissed), or within 6 days of termination if the employee terminates (i.e. you quit) per Policy Interpretation Subsection 3.
Note that the law also differentiates days employed from days worked, and they make it very clear in the example for Subsection 1.
