Working Through Covid-19: Vacation Policies Working Through COVID-19: Vacation Policies

Vacation Policies Survey

Clothing and department stores account for 17 per cent of total retail sales, which has remained constant over time. After four years of contraction, employment rebounded in the first two quarters of 2019. Both British Columbia and Ontario have seen relatively constant growth since 2010. Quebec’s share of clothing and department store retail has been sliding since 2010, likely due to the province’s population aging more rapidly than the Canadian average. Large retailers continue to close stores, with Gap, Home Outfitters (Hudson’s Bay), and J.Crew all expected to close locations in Canada in 2019. Fast-fashion giant Forever 21 will shutter all 44 of its Canadian locations by the end of the year. The industry has been challenging for both very small and very large players, with significant declines in the number of businesses with fewer than 10 employees and more than 100 employees since 2015. By contrast, there are now 1,000 additional Canadian clothing and retail stores with 10 to 19 employees.

The median annual income for sales representatives is $17,800, while for cashiers it is $9,900. Together, they represent half of the industry’s workforce. Since the industry relies on low-wage workers, recent minimum wage increases in Ontario and Alberta have put upward pressure on operating costs. Ontario’s retail trade employees saw a 5.2 per cent increase in wages between December 2017 and April 2018

GDP growth is expected to be weak, averaging just under 2 per cent from 2020 to 2024. This is due to larger economic trends that affect Canadians’ wealth—higher debt levels, rising interest rates, and weaker home prices. Employment will enjoy a strong boost this year, growing 8.5 per cent in 2019. However, this will be short-lived. A 2.1 per cent decline is in the cards for 2020, and little to no growth is expected between 2021 and 2024.

Summer is typically prime vacation time. Will it be this year? The Conference Board of Canada asked organizations across the country how they’re managing employees’ vacation usage, and what changes they’re making to vacation policies.

Note: Survey responses were collected on Monday, May 25, 2020. These findings are part of a Conference Board series on work and pay during the COVID-19 pandemic. Stay tuned for updates as this situation evolves.

Working Through COVID-19

More encouragement than requirement

Q: As a result of COVID-19, how is your organization directing employees to use vacation before year-end (or other deadline)?

(n = 296; percentage of organizations)

Note: Total does not add to 100 as more than one response could be selected. Source: The Conference Board of Canada.

Here’s what we found.

Q: Do any of the following circumstances exempt employees from being required to use vacation before year-end (or other deadline)?

Note: Totals may not add to 100 due to rounding. Source: The Conference Board of Canada.

(n = 82; percentage of organizations)

Even high-demand workers must use up vacation

For organizations requiring employees to take vacation, few are exempting employees in high-demand roles from this requirement.

June 1, 2020

This is a top concern among employers that could lead to paying out large amounts of unused vacation, or more employees taking time off at year-end. Organizations are encouraging—or even requiring—their employees to draw down their accrued vacation. Only a small number of organizations are directing when employees must take this time off.

With nowhere to go and travel restrictions still in effect, employees may be less motivated to use their vacation in the coming months.

Everyone needs a break. Now that workers are balancing new demands and stressors from COVID-19, the risks to their mental health are greater than before. Employers are also encouraging the use of vacation days to mitigate these risks, and help employees balance family responsibilities.

Q: Is your organization encouraging/requiring vacation usage to address any of the following current challenges?

Note: Total does not add to 100 as more than one response could be selected. Source: The Conference Board of Canada.

(n = 283; percentage of organizations)

Addressing balance and burnout with vacation

Q: Has your organization changed its approach to vacation policies as a result of the COVID-19 pandemic?

Note: Total does not add to 100 due to rounding. Source: The Conference Board of Canada.

(n = 311; percentage of organizations)

Vacation policies are getting a second look

Q: During COVID-19, for unused vacation that employees cannot carry over, which of the following applies?

Source: The Conference Board of Canada.

(n = 287; percentage of organizations)

Nearly half unsure how to tackle unused vacation

Plan for return

Safety measures

Exempt

Not exempt

Under review

Employee is in a critical role

Employee is a front-line worker

Employee has increased workload due to COVID-19

How are employers’ vacation policies changing?

of organizations have changed their approach to vacation.

32%

Among organizations that have made or are considering making changes to vacation policies, 92 per cent are not touching vacation entitlements. Of the organizations that are modifying entitlements, most are looking to increase them.

Q: Has the amount of vacation time employees are allowed to carry over changed as a result of COVID-19?

Note: Sample size indicates the number of organizations providing a response for at least one of the above options. Source: The Conference Board of Canada.

(n = 309; percentage of organizations)

28%

72%

Less carryover than before

More carryover than before

One in five organizations changing carryover policies

Having too much accrued vacation on the books can be a financial liability for an organization. Half of organizations are reviewing their approach to unused vacation that cannot be carried over—whether that involves paying it out, having employees forfeit it, or a hybrid of the two.

Want more info? Explore more topics in our ongoing Working Through COVID-19 series.

Amanda Holmes

Kelsey Coburn

Research Associate

Senior Research Associate

Get an inside look at our respondent profile.

Download the data.

Vacation carryover: Use it or lose it?