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I have been at my employer, (located in BC), for over 10 years, and am a non-union salaried employee.
I get 5 weeks of paid vacation. On top of this, I get an annual one time vacation pay of 6% of my previous years commission.
This year my employer has changed the formula they use to calculate the vacation payout on commissions, leading to a smaller payout.
Historically: Box 42 of T4 x 0.06 = payout. This had nothing to do with the weeks of vacation the company offered which increased over time based on tenure. It was a straight 6% of the previous commissions earned in the previous year.
New formula: salary + commission x 0.06 - vacation taken ($) = payout
While the minimum vacation pay in BC legally is 6% and my employer has not gone below that amount, they have in previous years opted to pay more. This year they decreased the amount paid, without advance notification of the change.
Can a company legally change the way an employee gets paid, which equates to less money, without advance notification?
The new formula which allows your employer to base your payout on salary + commission and then deduct your vacation days already taken is permitted.