PEI's New Employment Standards Act Is in Force: What Island Employers Need to Do Now
Prince Edward Island has a new Employment Standards Act, and it brought significant changes with it. The legislation received Royal Assent in November 2024, and as of June 30, 2026, it is in force alongside its companion regulations. The old Act and its Exemption Regulations have been revoked.
About this legislation
Prince Edward Island's Employment Standards Act, SNS 2024, received Royal Assent on November 29, 2024 and came into force on June 30, 2026, replacing the previous Employment Standards Act and its Exemption Regulations (EC574/17). The companion regulations came into force on the same date. This legislation applies to all PEI employers covered by provincial employment standards. Employers operating across Atlantic Canada should note that employment standards are jurisdiction-specific — New Brunswick, Nova Scotia, and Newfoundland and Labrador each have their own legislative frameworks, and obligations differ by province.
For PEI employers, this is not a future planning exercise. The new requirements apply to your workforce today. What follows is a plain-language breakdown of what has changed, what it means practically, and where your attention needs to go first.
Who is covered
The new Act largely follows the coverage of the old one, but with some clarifications worth noting. Salespersons who earn their income primarily from commissions and farm labourers in non-commercial undertakings are exempt from most provisions — but the pay-related provisions and enforcement provisions still apply to both groups.
Home care workers and employees of non-profit organizations required to live in a facility operated by their employer are not subject to the standard weekly hours or entitlement-to-pay provisions.
What this means for PEI employers: If you have been treating any of these categories of workers as entirely outside employment standards requirements, revisit that assumption. Failing to apply pay provisions to otherwise exempt employees creates real exposure.
Hours of work and scheduling
The maximum work week in Prince Edward Island has been reduced from 48 hours to 44 hours. PEI employers who have been scheduling employees up to 48 hours before overtime obligations arose need to recalibrate their operations accordingly.
The new Act also introduces a written scheduling obligation. PEI employers must now provide employees with a written work schedule specifying when work begins and ends, when shifts begin and end, when rest and meal breaks occur, and the number and timing of any overtime hours. The schedule must cover at least one full work week.
Split shifts must now be completed within 12 hours of when the first shift began. Employees are entitled to at least eight consecutive hours of rest in every 24-hour period, outside of unforeseeable circumstances.
What this means for PEI employers: Operating without formal written schedules is no longer an option. This is a contravention of the Act and can be reported. PEI employers should review their scheduling practices and implement a compliant system now.
Averaging agreements
The new Act introduces averaging agreements, which allow a PEI employer and employee to agree in writing to average work hours over a period of two to four weeks for the purpose of calculating overtime. This is a useful tool for employers with fluctuating or seasonal staffing needs.
What this means for PEI employers: Averaging agreements must be in writing and agreed to by the employee. Employers in sectors with variable workloads — tourism, agriculture, construction — should assess whether averaging agreements are a practical fit for their workforce.
Pay statements and tips
Pay statements must now include the gross amount of any holiday pay and the gross amount of any pay for paid leave being taken, as separate line items.
PEI employers who pool tips or gratuities must post a copy of their tipping policy in a location visible to employees.
What this means for PEI employers: If your payroll system does not currently break out holiday pay and paid leave as separate gross amounts, you need to work with your payroll provider to make that change. If you pool tips, post your policy now.
Vacation
The threshold at which PEI employees reach the higher vacation entitlement has been reduced from eight years of service to five. Employees who have been with your organization between five and eight years may now be entitled to more vacation than you have been providing.
Where a PEI employer and employee cannot agree on when vacation begins, the employer may now set the vacation commencement date unilaterally and notify the employee.
What this means for PEI employers: Audit your workforce for employees with five or more years of service. Update your vacation tracking and entitlement calculations accordingly.
Paid sick leave
The new Act introduces paid sick leave on a graduated basis. PEI employees employed for at least 30 continuous days are entitled to four days of unpaid sick leave per year.
Paid sick leave accrues for employees who have been continuously employed for at least one year: one paid sick day in year two, two paid sick days in year three, and three paid sick days in year four and each year after that. Unused sick days do not carry over.
If an employee takes more than five consecutive sick days, a note from a qualified practitioner is required. The definition of "qualified practitioner" has been broadened to include any person registered or licensed to practice a health profession under an applicable enactment, as long as the diagnosis falls within the scope of their practice.
What this means for PEI employers: If your organization has not previously offered paid sick days, you must update your policies now. The obligation is immediate, and it applies to unionized employees under collective agreements as well.
Medical leave
The new Act introduces an entirely new medical leave entitlement that did not exist before. A PEI employee continuously employed for at least 90 days is entitled to up to 27 weeks of unpaid medical leave for recovery from or treatment of illness or injury, organ or tissue donation, gender-affirming care, or any other condition that prevents the employee from working for an extended period. A medical professional's note is required.
What this means for PEI employers: This is a new obligation with meaningful operational implications. PEI employers should add a medical leave policy to their handbooks and consider how extended absences of this length will be managed.
Family leave
The eligibility threshold for family leave in Prince Edward Island has been reduced from six months of continuous employment to 30 days, meaning more of your workforce will qualify sooner.
Employees are entitled to three days of family leave per year, which cannot be carried over. The definitions of "immediate family member" and "family member" have been expanded to include stepchildren, spouses' siblings, aunts, uncles, nieces, nephews, children-in-law, and persons with a relationship akin to a close relative.
What this means for PEI employers: Update your leave definitions and tracking processes. The broader family definition means more PEI employees will qualify for family leave than before.
Leave for domestic violence, intimate partner violence, or sexual violence
PEI employees continuously employed for at least 90 days are entitled to three days of paid leave and seven days of unpaid leave under this provision. When a PEI employer requests supporting evidence, the employee must provide it in writing. Acceptable sources include social workers, registered nurses, police officers, and spiritual leaders.
What this means for PEI employers: Review your existing policy on this leave. A policy that sets an inappropriately narrow evidentiary bar will not be compliant with the new Act.
Sexual harassment
The Sexual Harassment section from the previous Act has not been carried forward into the new legislation. Sexual harassment in Prince Edward Island workplaces is now addressed under the Occupational Health and Safety Workplace Regulations.
What this means for PEI employers: This is a change that many employers will miss. Your existing sexual harassment policy needs to be reviewed against the OHS Workplace Regulations to confirm it meets the current standard. A policy written to comply with the old ESA may no longer be sufficient.
Termination and notice
The eligibility period for termination notice in Prince Edward Island has been reduced from six months to 90 days of continuous employment. The revised notice scale is as follows:
90 days to less than 1 year: 1 week
1 year to less than 5 years: 2 weeks
5 years to less than 10 years: 4 weeks
10 years to less than 15 years: 6 weeks
15 years or more: 8 weeks
Vacation time cannot be counted as part of a required notice period.
A new group termination provision now applies when a PEI employer terminates 10 or more employees who represent at least 25 per cent of the workforce within a continuous two-month period. In those circumstances, the employer must provide six weeks' notice to the affected employees, any trade union representing them, and the Minister, along with the number of employees affected, the effective dates, and the reasons for the termination or layoff.
What this means for PEI employers: Employment agreements must be reviewed and updated to ensure termination provisions reflect current minimum standards. The group termination provision catches many employers off guard. If you are considering a significant workforce reduction in Prince Edward Island, get advice before taking any steps.
Key definitional changes
The definition of "work" under PEI's new Employment Standards Act has been expanded to include trial periods of employment, employer-required training, and time spent being available to work at a location designated by the employer, other than the employee's own home. On-call time at an employer-designated location may now count as work for the purposes of wage and hour obligations.
The definition of "termination" has been clarified to mean the ending of an employee's employment by the employer, removing previous ambiguity.
Enforcement: the rules are stronger now
The enforcement regime under the new Act is materially more robust. Any person with reasonable grounds to believe a contravention has occurred may now report it to the Chief Inspector — not just the directly affected employee. The limitation period for complaints has been extended from 12 months to two years.
What this means for PEI employers: The combination of a longer limitation period, broader standing to complain, and expanded inspector powers means the consequences of non-compliance are significantly higher than before. The time to audit your practices is now, not after a complaint is filed.
Reprisal protections
The new Act consolidates anti-reprisal protections into a single provision. PEI employers cannot take adverse action against an employee for inquiring about pay, disclosing pay information, exercising rights under the Act, providing information to an inspector, making a complaint or report, or participating in a proceeding under the Act.
What this means for PEI employers: If a complaint is filed and an adverse employment action follows, the timing will attract scrutiny. Any performance or disciplinary decisions made around the time of a complaint must be well-documented and clearly disconnected from the complaint itself.
What PEI employers should do right now
The most urgent actions for PEI employers are:
Review and update employment agreements to reflect new notice periods, the expanded definition of work, and overtime thresholds
Review and update employee handbooks and HR policies to address new leave entitlements, the medical leave provision, and the shift of sexual harassment obligations to OHS regulations
Implement a written scheduling system that meets the new requirements
Post your tipping policy if you pool tips
Update your payroll system to break out holiday pay and paid leave as separate gross line items on pay statements
Audit your workforce for employees with five or more years of service and adjust vacation entitlements accordingly
If you are considering a significant reduction in force in Prince Edward Island, seek advice before issuing any notices
Frequently asked questions: PEI's new Employment Standards Act
When did PEI's new Employment Standards Act come into force?
The new Employment Standards Act came into force on June 30, 2026. The old Act and its Exemption Regulations (EC574/17) were revoked on the same date.
What is the new maximum work week under PEI's Employment Standards Act?
The maximum work week has been reduced from 48 hours to 44 hours. Overtime obligations arise once a PEI employee works more than 44 hours in a week.
Are PEI employers now required to provide written work schedules?
Yes. PEI employers must now provide employees with a written work schedule specifying shift times, rest and meal breaks, and any overtime hours. The schedule must cover at least one full work week.
What paid sick leave are PEI employees entitled to under the new Act?
Employees continuously employed for at least one year are entitled to one paid sick day in year two, two paid sick days in year three, and three paid sick days in year four and beyond. Employees employed for at least 30 days but less than one year are entitled to four days of unpaid sick leave per year.
What is the new medical leave entitlement in PEI?
PEI employees continuously employed for at least 90 days are now entitled to up to 27 weeks of unpaid medical leave for illness, injury, organ or tissue donation, gender-affirming care, or any other condition that prevents them from working for an extended period. This entitlement did not exist under the old Act.
How has the termination notice period changed under PEI's new Employment Standards Act?
The eligibility threshold for termination notice has been reduced from six months to 90 days of continuous employment. The notice scale now ranges from one week for PEI employees with 90 days to less than one year of service, up to eight weeks for employees with 15 or more years of service.
What is the new group termination requirement in PEI?
When a PEI employer terminates 10 or more employees who represent at least 25 per cent of the workforce within a continuous two-month period, the employer must provide six weeks' notice to the affected employees, any trade union representing them, and the Minister responsible for employment standards.
Where does sexual harassment policy now sit for PEI employers?
The Sexual Harassment section from the previous Employment Standards Act was not carried forward into the new legislation. Sexual harassment obligations for PEI employers now sit within the Occupational Health and Safety Workplace Regulations. Existing policies should be reviewed against those regulations to confirm compliance.
Does PEI's new Employment Standards Act apply differently to employers in other Atlantic provinces?
Yes. Employment standards are provincially regulated. The new PEI Employment Standards Act applies only to employees working in Prince Edward Island. Employers with operations in New Brunswick, Nova Scotia, or Newfoundland and Labrador are subject to the separate employment standards legislation of each of those provinces.
Ready to protect your organization?
Resonance HR Law provides trusted HR and employment law advice to employers across Atlantic Canada. Whether you are navigating the transition to PEI's new Employment Standards Act or looking to review your policies and employment agreements, we are here to help.
This article is for general informational purposes only and does not constitute legal advice. Employment law is jurisdiction-specific and changes frequently. Contact Resonance HR Law for advice tailored to your circumstances.