A reader asked:

My company has no policy, whether it be written or oral, in place in terms of carry over of vacation time. In the 5 years of employment, at no time did they ever say that carry over of vacation time was not allowed. Like my co-workers, I've accumulated 3 months of unused vacation time over 5 years. Can my employer wipe out vacation days that are earned but not taken?

Michael Fu answered:

In regards to annual vacation pay, the Employment Standards Act states that an employer has to make sure that every year vacation time and money earned are paid out to the employee. There is no carry over.

Sometimes an employer lets the employee take a vacation right away in the first year. That is vacation time and money paid in advance. Technically you should work one year and then you have earned your vacation entitlement. The employer is then required to make sure that you are taking your vacation time and money during the following 12 months, in other words during your second year. In your second year you're earning what is to be your entitlement up to the third year. So the first year, technically, there is no vacation time that you can take, but you are earning it all the way through. If you're taking it in advance and you are terminated before your time is up, the money has to be accounted for and paid out.

Back to the carry over, the employer has to make sure that the time is used up during the following 12 months. If there is carry over the employer has failed to comply with the Employment Standards Act. That means that the time and money are considered to be unpaid wages. If a complaint is filed with us we can force the employer to pay back two years of unpaid wages.

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