A few weeks ago I attended an employment standards seminar at Small Business BC. Although this is not an area I specialize in, I am often asked by clients and their employees about various employment issues so figured I should get some information to share. Here is what I learned:
What are Employment Standards? It is a set of guidelines and regulations (aka The Act) which sets the minimum work standards that employers must provide to their employees. The Act applies to all employees covered under provincial jurisdiction, including temporary foreign workers.
If you are a contractor or union employee, the Act does NOT apply to you as it is superseded by your employment contract or collective agreement; however, contracts and collective agreements must meet the standards of the Act.
So just to clarify, you MUST be an EMPLOYEE to be covered by the Act.
Although this Act covers most workers employed in BC, there are certain sectors that have alternate provisions, such as, high technology, agriculture, taxis, oil and gas…etc. Fact sheets for these sectors are available through the Labour Canada website.
The Employment Standards Act is very involved and details all aspects of employee entitlement and employer liability. If I were to write about all of it, I think it would be a book not a blog. So, I have outlined some of the key points that I think every employer AND every employee should know.
MINIMUM WAGE: Currently, in BC, the minimum wage is $10.85 per hour for regular employees and $9.60 per hour for employees who serve liquor as part of their regular duties (effective September 15, 2016; set to increase to $11.35 and $10.10, respectively, as of September 15, 2017). This wage applies to all employees; hourly, salary, commission or incentive based. If you are paying employees by commissions, salaries or piece rates, the amount of pay must be at least equivalent to minimum wage.
What does this mean? If their commission is less than minimum wage based on the number of hours worked, you must pay the minimum wage. If their commission is higher, then you disregard the minimum wage rate.
Example: Employee A is paid on commissions. Her commissions for September were $2,000 and she worked 160 hours that month therefore minimum wage for the month would be $1,763 (160 hours * 10.85). Since her commissions were higher than the minimum wage, she is paid the commissions.
Using the same facts as above, Employee B’s commissions were $1,200 therefore since they were less than the minimum wage of $1,763, Employee B would be paid the minimum wage rate.
TRAVEL AND TRAINING: An employee must be paid for time spent in training, staff meetings, travel time (i.e. time spent going to the airport, on the flight when traveling for business, etc.) and for on call work. Working time incurred during travel and training should be clearly communicated between employer and employee.
MINIMUM DAILY WAGES: When an employee reports for scheduled work, he/she is entitled to be paid at least two hours, even if you don’t have any work available or they work less than two hours. If the employee is scheduled for more than eight hours then a minimum of four hours must be paid. If work is stopped for a reason beyond the employer’s control (i.e. power outage, pipes bursting/flooding, etc.) and the employee has worked more than the two or four hour pay entitlement, you only need to pay them for the number of hours they have worked.
MEAL BREAKS: An employee is entitled to a 30-minute unpaid meal break after five consecutive hours of work. If the employee is required to work or be available to work during that time then the meal break must be paid. Coffee breaks are not required under the Act.
OVERTIME: Overtime must be paid at a rate of time-and-a-half after eight hours worked in a day and double time after 12 hours worked in a day. Weekly overtime is paid at time-and-a-half after 40 hours worked in a week. The employee is not allowed to waive their right to overtime and must be paid. An employer may allow an employee to take time off in lieu with a written agreement.
Managers are exempt from overtime rates-of-pay unless otherwise outlined in an employment contract.
PAYROLL: Employees must be paid AT LEAST twice a month with a pay period no longer than 16 days. An employer’s business costs cannot be deducted from an employee’s wages (i.e. wcb premiums, cash shortages, breakage, damage to company property or loss from customers leaving without paying).
STATUTORY HOLIDAYS: To be eligible for statuary holiday pay an employee must have been employed for at least 30 calendar days and have worked a minimum of 15 of the 30 days prior to the stat. Qualified employees must be given a paid day off or be paid time-and-a-half for the first 12 hours worked and double-time after 12 hours AND an average day’s pay. There are 10 statutory holidays in BC that must be paid:
New Year’s Day Family Day Good Friday Victoria Day Canada Day
BC Day Labour Day Thanksgiving Day Remembrance Day Christmas Day
Easter Sunday, Easter Monday and Boxing Day are NOT statutory holidays.
Managers are exempt from statutory holiday pay unless otherwise outlined in an employment contract.
VACATION PAY: Vacation pay is earned on regular wages, overtime wages and commission. Once you have worked five consecutive days you are entitled to vacation pay; however, you must work for a full year before you are eligible to take a vacation (or at the discretion of the employer). An employee is entitled to two weeks’ vacation after completing one year of full-time employment and three weeks after five years. Any entitled vacation pay must be paid to the employee on termination of employment.
UNIFORMS AND SPECIAL CLOTHING: An employer that requires an employee to wear a uniform or special clothing (anything easily identified with the employer; i.e. with company logo or unique colours) must provide, clean and maintain it at no cost to the employee unless otherwise stated in an employment contract. This does NOT include a dress code, but DOES include the requirement to wear clothing the business is currently selling.
BEREAVEMENT LEAVE: Employees are entitled to three days of unpaid leave upon the death of an immediate family member.
FAMILY RESPONSIBILITY LEAVE: Employees can take up to five unpaid days for the care, health or education of a child or a member of the employee’s immediate family.
COMPASSIONATE CARE LEAVE: Employees can take up to eight unpaid weeks within a 26 week period to care for a gravely ill family member. The employee must provide a medical certificate proving significant risk of death to the family member.
JURY DUTY: Jury duty is unpaid for the duration of the leave.
EMPLOYEES UNDER 15 YEARS OF AGE: To employ a person under 15 years of age, the employer must have written consent of the employee’s parent or guardian. If that person is under the age of 12, the employer must also have the written consent of the Director of Employment Standards.
TERMINATION OF EMPLOYMENT: After three consecutive months of employment, the employee is eligible for severance pay upon termination of employment by the employer; however, the liability is waived if the employer provides adequate written notice.
After 3 consecutive months of employment: 1 weeks’ wages OR 1 weeks’ written notice
After 12 consecutive months of employment: 2 weeks’ wages OR 2 weeks’ written notice
After 3 consecutive years of employment: 3 weeks’ wages OR 3 weeks’ written notice
Add 1 week for every year above 3 years to a maximum of 8 weeks
If an employee quits, retires or is terminated with just cause the employee is no longer entitled to severance. Payroll records for terminated employees must be kept for two years.
The Act also sets forth provisions for disputes, investigations, Tribunal or Director determinations and consequences, treatment of employees, monetary fines and more. I think it is definitely worth your time to learn what you are entitled to as an employee AND what you are liable for as an employer.
Keep in mind, by exclaiming “I didn’t know” and claiming ignorance of the Employment Standards Act will not get you off the hook!
Please note that I am referring to the employment standards in British Columbia only so you may want to review the standards applicable to you if you are located in another province or country. If you have any questions or comments, please let me know. Otherwise, if you have any employment related issues, I suggest you contract your local Employment Standards office.
***This blog is for information only and not to be used as tax advice or planning. Information is subject to change without notice.