Each province has an Employment Standards Act that each business that hires employees needs to follow. It is quite a comprehensive act and contains a ton of information, which is why I need to refer to it often when answering questions for my clients.
Luckily, the Employment Standards website now has factsheets which are an explanation of the act regarding certain issues in layman’s terms.
For example, when you terminate an employee you need to provide that employee with written notice or compensation based on length of service. Did you know that you need to pay that employee all wages owing within 48 hours?
You also need to pay vacation pay and compensation pay. If the employee has worked less than a year and at least three months, the compensation is one week’s pay. If the employee has worked more than a year, then compensation is two week’s pay and after three years, its three weeks pay plus an additional weeks pay for each additional year worked up to eight weeks.
If the employee quits, you need to pay all outstanding monies within six calendar days including any time banked.
Many employers are now using direct deposits to pay their employees, but are neglecting to provide a ‘pay statement’ which is in direct contravention of the act. Every employee is required to receive a pay statement with each pay and there are strict guidelines as to what is required to be shown on the pay statement.
Employment Standards also has an excellent on-line complaint system for employees. It is a step-by –step system that allows you to first determine if your issue is something that falls under the act. The second step is to send a form to the employer that lists the money that you think you are owed. The employer has 15 calendar days to reply.
Hopefully at this point, you and the employer can communicate and come to a satisfactory resolution. If not, you can then open a formal complaint with the department. Then if the department is unable to resolve the issue to your satisfaction there is still the legal route.
Did you know that any deductions from an employee’s paycheque other than the regular statutory deductions must be agreed to by the employee in writing? These other deductions might be union dues, donations, pension plan, extended health and dental and family maintenance payments.
One thing for employers to note is that now that the CRA has exchange of information agreements with other government bodies, I wouldn’t be surprised if Employment Standards was one of these bodies, so if your case does get investigated by the department, there is a good chance that a CRA audit could follow.
If you are faced with an employee issue or are thinking of hiring employees, please contact your accountant for assistance.
