There is a difference between vacation time and vacation pay in Canada. While your employee is away on maternity/parental leave, she is earning vacation time. However, the vacation pay she earns will be determined by what is stated in her employment contract. If her contract states that she will receive 4% vacation pay based on hours worked, then your employee will not have earned vacation pay during her maternity leave, only vacation time. If, however, the contract stipulates your employee will earn two weeks of paid vacation on an annual basis, then she will earn two weeks of paid vacation while away on a one year maternity/parental leave, regardless of the hours worked that year. Then you will owe both vacation time and pay in that instance. Note there may be exceptions to this in Quebec.
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