Am I on the hook for public holiday pay the seller never paid out?

It depends on your deal structure. In a share purchase, yes — unpaid public holiday pay is a wage debt of the corporation, and since the same corporation continues under your ownership, that outstanding obligation continues with it regardless of when it was actually earned.

In an asset purchase, this liability generally stays with the selling corporation as the employer during the period the holiday pay was earned, provided your purchase agreement makes clear you aren't assuming pre-closing wage liabilities. As with other accrued wage entitlements, this can get layered for employees you continue to employ under going-concern continuity: their broader entitlement calculations continue based on combined service, but the specific unpaid amount from before closing should, in a properly drafted deal, remain a debt the seller is responsible for settling, not something quietly absorbed into your side of the ledger.

Review payroll records specifically for unpaid public holiday pay as part of financial and employee due diligence, since it's easy to overlook alongside larger wage categories like overtime or vacation pay, and make sure your purchase agreement clearly allocates responsibility for any pre-closing shortfall. A Treadstone business lawyer can help build this into your review.