Canada: Big Changes for PEI Workplaces – Inside the New Employment Standards Act

Prince Edward Island’s (PEI) Bill 76, which replaces the province’s existing Employment Standards Act (ESA), received Royal Assent in November 2024 and has been proclaimed into force as of June 30, 2026. 

While the new legislation introduces numerous changes, employers should take note of the following key updates:

Working Hours, Scheduling, and Overtime

• The standard number of hours of work per week is reduced from 48 to 44, such that an eligible employee will now be entitled to overtime pay equal to 1.5 times the employee’s regular wage rate for all hours worked in excess of 44 hours. 
• Employers must provide a written work schedule to employees at least one week in advance, except if there is a change in schedule that is unexpected, unusual, or due to an emergency.
• Employees must be provided with at least eight hours of rest every 24-hour period, subject to certain qualifications, and split shifts must be completed within 12 hours of each other.
• Employers and employees may agree in writing to overtime averaging over a period of up to four weeks.

Leaves of Absence

• Sick leave: an employee with at least 30 days of continuous employment is entitled to four unpaid sick days per calendar year for illness or injury.  In addition, after a year of continuous employment, an employee is also entitled to one paid sick day, which increases to two paid sick days after two years and three paid sick days after three (or more) years. An employer may only request a sick note to verify the employee’s entitlement to sick leave if the leave is for five or more consecutive days.
• Medical leave: an employee with at least 90 days of continuous employment is entitled to up to 27 weeks of unpaid medical leave in a year for reasons related to illness, injury, organ or tissue donation, gender-affirming care, or other prescribed treatments.
• Citizenship ceremony leave: an employee with at least 90 days of continuous employment is entitled to up to one unpaid day of leave to attend their citizenship ceremony.

Vacation and Public Holiday Pay Entitlements

• An employee is entitled to three weeks of paid vacation after five years of continuous employment (reduced from eight years).
• Part-time, seasonal, and short-term employees may elect to receive vacation pay each pay period. 
• Paid holiday pay is calculated as five percent of the employee’s wages, excluding overtime pay, earned in the four weeks preceding the holiday.

Termination Entitlements

• An employee will be entitled to individual notice of termination after 90 days of continuous employment (reduced from six months).
• A mass termination framework is introduced, with an employee being entitled to six weeks’ notice of termination if the employer terminates 10 or more employees within a two-month period. This does not apply if the group of employees terminated does not represent at least 25% of the employees at the impacted workplace.

Complaints and Enforcement

• An employee may file a complaint within two years of the alleged contravention (increased from one year).
• Employment Standards inspectors can issue penalties for contraventions of the ESA.

In accordance with the new law, the province has released several updated regulations, including a new general regulation under the ESA. This regulation includes information related to exemptions from the law, information that must be included in an employer’s wage deduction notice, calculation of pay for certain leaves, and administrative penalties for violations of the new ESA.

Employers operating in PEI should consult knowledgeable employment counsel to ensure that they are compliant with these new and amended provisions.