How to Create a Time Off Policy (Sick Leave, Vacation, Personal Days)

Danielle FreedlandDanielle Freedland
Oct 3, 2019
8
min read

You’re sitting across the room interviewing a potential candidate for a new role, deciding whether or not they’re a good fit. In the midst of all this, a question gets directed at you. “So, what can you tell me about the organizational culture?” Now, there are multiple ways to answer this. But one thing is for sure, they’re determining if they'd enjoy working for you.

A paid time off policy offers a great benefit to your employees and is an attractive offer. Not all locations are required to offer paid time off, so it's up to you to figure out what kind of policy fits best with your culture.

Don’t know where to start? Not a problem. We’ll help you find a policy that follows both the Employment Standards Act and fits perfectly with your organizational culture.

Sick leave

Hachoo! Now that’s something you don’t want to hear in the office.

Selecting the perfect sick leave policy for your organization can be tricky. You definitely don’t want employees showing up to work sick but we understand if you’re feeling nervous that someone may take advantage by using unnecessary days off. To create a successful paid time off policy, let’s start off by determining what is required.

How many sick days are required?

The Employment Standards Act provides employees with job-protected sick leave each year, whether paid or not. Specifically in Ontario, anyone who’ve worked with you for at least 2 consecutive weeks is entitled to 3 days of unpaid sick leave each calendar year. Special rules apply to some occupations.

Who can take sick leave?

Any employee who experiences a personal illness, injury or medical emergency regardless of the cause. But, your employees can’t take a sick leave for a non-medical cosmetic operation or if it’s unrelated to their illness or injury.

How to create a sick leave policy

At Humi, we offer our employees unlimited sick leave, which fits perfectly with our organizational culture. We know our employees don’t like being sick, so why risk it? Our employees have the ability to take as much time as they need to rest and prevent others from becoming sick as well. Our employees really appreciate it!

But we know that’s not a policy for everyone. Evaluate your organization's needs and culture to see what works best for your team. For instance, your organization might want a culture that supports unlimited sick leave but can’t risk it due to limiting factors like shift work.

TIP: Start with 3 days in your sick leave policy.

Vacation

Everyone’s favourite day off - vacation time! In Ontario, the act separates this term into two sections: vacation leave and vacation pay.

Vacation leave: How many vacation days is an orgaization required to give employees each entitlement year.

Vacation pay: A government mandated form of guaranteeing employees can either receive paid time off for vacation or are paid for vacation time not taken.

Now you might be wondering, “how much vacation leave do you need to give your employees?” Your employees in Ontario are entitled to vacation time based on the length of time they’ve been working for you. If they’ve worked for less than 5 years, they've earned a minimum of 2 weeks and if more than 5 years, they’ve earned a minimum of 3 weeks.

Note: If an employee starts on an alternative vacation entitlement year or isn’t employed at the beginning of the entitlement year, they’re entitled to a pro-rated amount of vacation time, also known as a stub period.

TIP: Provide your employees with 2 weeks of vacation at 4% if they’ve worked less than 5 years. Then offer 3 weeks of vacation at 6% for employees who’ve worked more than 5 years.

Personal leave

Wouldn’t it be nice to have a day off to move into your new home or to attend your grandfather’s unveiling? That’s where personal days come in. Personal days off offers employees an additional form of paid time off that contributes to a healthy work environment. Employees can use this time off for things that shouldn’t count as a vacation day or sick leave, and use it as a personal day.

Currently, Ontario does not require employers to provide personal days off but it’s definitely something to consider in your policy.

Personal emergency leave

You’re not required to offer personal days in Ontario but you’re required to offer personal emergency leave. So keep in mind that this policy grants your employees the right to take up to 10 days of job-protected leave each calendar year due to illness, injury, death, and emergencies. Special rules apply to some occupations.

Find a policy that works best for you

Some companies may choose to provide unlimited paid time off as long as their employees meet their performance goals, while others may decide to offer it right off the back. Perhaps your organization is only qualified to offer what’s within the requirements. It all depends on the goals you're trying to accomplish. Let’s explore some pros and cons of offering unlimited paid time off:

Pros

  • Helps to attract and retain top talent
  • Reduces employee burnout to increase productivity
  • Cut down costs (employees can’t accrue time off)
  • Employees gain trust and flexibility, leading to an increase in morale

Cons

  • Fear of employees abusing the system  
  • Lose vacation as a reward
  • Employee might not take time off or get paid out
  • Expectations for how much time off to take are unclear

An unlimited paid time off policy doesn’t mean that you’re obligated to offer an unlimited policy for all 3 leave types. The world’s your oyster. You’re able to structure your policy in various different ways, as long as your following the requirements. Maybe it bests to offer unlimited sick leave but only offer what’s required for vacation? Whatever works best for your workplace environment.

When deciding on a vacation policy, some questions you might want to consider are:

  • Does it offer a competitive advantage that attracts and retains talent?
  • Will it support a positive work environment?
  • Can this lead to an increase in employee productivity?
  • Will you create a reward structure with your time off policy?

Employment Standards by Province

Does your organization reside outside of Ontario? Canada’s employment standards differ from province to province. Use the following links below to review what your province’s employment standards are.

Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland and Labrador
Northwest Territories
Nova Scotia
Nunavut
Ontario
Prince Edward Island
Quebec
Saskatchewan
Yukon

Danielle FreedlandDanielle Freedland

Danielle is a Content Marketer at Humi who is skilled at drawing. Some may say she’s a professional doodler.

Illustration of man riding a bike delivering mail

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