Earn a fixed salary? You might be working for free tomorrow

Rohith Krishnan was “bummed” when he found out he’s not getting paid for the extra day of work during leap years. 

Employers typically pay their salaried workers the same yearly amount, whether the calendar year has 365 or 366 days, unless the contract states otherwise. As a result, the average salaried worker is potentially losing out on hundreds of dollars, while employers collectively save billions.

“You still have your expenses for that day,” the senior tax associate working in Toronto pointed out. Meals, gas and transit fares still add up for many people on Feb. 29, Krishnan said. 

“I think we should be compensated.”

“I think it’s pretty brutal. I know, for myself, if I’m working, I want to be paid. Day-to-day things cost and prices are going up,” said William Georgopoulos, who spoke to CBC News in Toronto’s financial district.

But not everyone is losing sleep over this. Many said being salaried comes with a slew of coveted benefits, such as massage therapy and dental care, as well as flexibility with their schedules.

Sara Loriot, an executive at an investment management firm in the city, argues it’s a bit of give and take.

“I’m not necessarily a 9-to-5 kind of gal even if that’s what my contract says. The reality is, I’m expected to yield a certain amount of work and that’s what I’m getting paid to do,” she said.

“It’s a quarter of a day every four years,” said Ian Reed, an accountant from Kitchener, Ont. 

“That doesn’t really kind of move that bottom line for me a whole lot.”

Is this ‘wage theft’?

But for many, that extra work day adds up to hundreds of dollars.

Consider this: the average salaried worker earned the equivalent of $43.88 an hour, including overtime pay, according to the latest figures from Statistics Canada. So for a typical eight-hour day, someone would be losing out on $351, before taxes and other deductions.

That means, with about 6.5 million salaried workers in this country — more than a third of Canada’s workforce — employers could collectively save about $2 billion.

“We use the term ‘wage theft’ because it is a form of theft that workers are experiencing,” said Ella Bedard, lawyer and organizer with the Workers’ Action Centre, which advocates for better working conditions for people in the Greater Toronto Area.

She says the leap day issue is part of a much broader problem her organization is looking to tackle where workers are “not getting paid everything that they’re legally entitled to.” That includes unpaid overtime, unpaid public holidays and withheld employee benefits.

This is a real crisis in Canada and people are feeling it more because every dollar counts when there is when the cost of living is as high as it is now.– Ella Bedard, lawyer with the Workers’ Action Centre

She encourages people to keep track of their hours, particularly if they’re not paid hourly, to avoid getting underpaid.

But for Annie Boilard, a human resources consultant in Montreal, occasionally putting in extra hours to meet deadlines is just part of the job — and it’s usually accounted for in the employee’s compensation.

“People who receive an annual salary will usually spend more hours of work in a year than what they’re actually paid for, like 40 hours a week,” she said.

“It’s kind of expected [of] them. It’s included in their salary.”

Who is impacted?

Unlike salaried employees, hourly wage workers will get paid for any hours worked on Feb. 29, just like any other day. More than 11 million employees were paid hourly last November, according to the most recent data from Statistics Canada.

For the 6.5 million employees who earn a fixed annual amount, there is a distinction to be made between those who are paid every two weeks (biweekly) and those who are paid twice a month (bimonthly).

If you have two paydays each month, you clearly won’t see the extra day of work added to your pay stub in February. Your fixed salary is divided into 24 paycheques, and you receive the same amount whether the month has 28, 29, 30 or 31 days.

It’s not as straightforward for employees paid biweekly, especially since Feb. 29 lands on a weekday this year, which was not the case in 2020. These employees get the same amount for the same number of days worked.

But the fact remains that, over the entire year, they will still have worked one day more (or even two, depending on where weekends land) than they did during non-leap years. In several provinces, including Ontario and British Columbia, the calendar has 252 work days in 2024, excluding statutory holidays, while there were 250 last year.

Extra compensation for leap day?

Currently, no law states that salaried workers must be paid extra in a leap year. It’s ultimately up to employers to decide.

There are contracts that include some form of compensation for employees on a salary if they work on Feb. 29, but it’s still pretty uncommon, Boilard said.

There doesn’t seem to be a trend to start paying for that additional day.– Annie Boilard, human resources consultant

“It certainly seems like a day of volunteering. However, our entire ecosystem is set up this way: our car payments don’t go up in February during a leap year. Rent doesn’t go up either,” the HR consultant said. 

The Public Service Alliance of Canada, one of Canada’s largest unions, is one of those trailblazers for leap year compensation. Members have their annual salary spread over a constant period (365.25 days per year), in an effort to even out the discrepancies between calendar years.