What happens to employees' pay if closing happens partway through a pay period?

This depends on the deal's structure. In a share sale, the employer entity itself doesn't change — the corporation just has new owners — so payroll typically continues straight through the pay period without any real interruption or need to split responsibility. In an asset sale where the buyer hires the seller's employees as part of a going-concern purchase, the Employment Standards Act's continuity-of-employment rule generally treats those employees as not having been terminated, carrying prior service forward for entitlements like vacation and notice.

Because the employer of record does change in that scenario, the purchase agreement should specifically address who pays wages for the split pay period — commonly the seller pays up to the closing date and the buyer picks up from there, sometimes with a reimbursement adjustment built into the statement of adjustments. Accrued vacation pay and similar carried-over entitlements also need to be tracked carefully at the same time, since continuity of service means those obligations don't simply reset with the change in ownership.