2.5 Employment Standards Legislation

Meena K. Gupta; Gayle St. Denis; Ikram Ibrahim

Chapter 2: Laws Impacting Payroll

2.5 Employment Standards Legislation

2.5.1 What are employment standards?

Employment standards legislation creates rules for the employer-employee relationship that protect employees and safeguard certain workplace rights. Employment standards set minimums that employers must follow in areas such as minimum wage, breaks and days of rest, holiday, overtime pay, termination notice, frequency of pay, and record-keeping obligations. Employers cannot provide less than what employees are entitled to under employment standards legislation, but they are free to provide the minimum or more in contracts or collective agreements.

Several of these minimum standards impact payroll. For example, if the employer has minimum-wage workers, and the minimum wage rate rises, the employer must pay the new minimum wage rate on or before the legal effective date. Each jurisdiction has enforcement mechanisms for employment standards to ensure that these standards are met.

2.5.2 Determining Whether an Organization Is Impacted by Federal or Provincial Employment Legislation

Most employer organizations must follow the employment regulations in the province or territory in which the organization operates. When employers operate in more than one province or territory, the payroll obligations are determined by the laws in those provinces and territories. Only specific industries and types of employers are federally regulated. Federally regulated industries include banking, air transportation, broadcasting (radio and television), road and rail transportation (if the road or railway crosses provincial or international lines), and postal and courier services. Federal government employees are also subject to federal employment standards. For a complete list of federally regulated industries see the List of federally regulated industries and workplaces.

Most employers are provincially regulated. Provinces in Canada have broad jurisdiction pertaining to local matters. If an industry is not listed as federally regulated, it will be provincially regulated. This applies to employers operating in more than one province in areas other than federally regulated industries. For example, if Chamak, a clothing retailer, operates in BC, Alberta, Saskatchewan, and Ontario, then Chamak would apply the employment standards of each of these provinces to the employees working in those provinces. If employers operate in more than one province, payroll will likely have to keep track of multiple pieces of employment standards legislation.

2.5.3 Employment Standards: Minimum Wage

Minimum wage is the lowest hourly, daily, or monthly wage that employers can legally pay to employees or workers. Under federal and provincial labour legislation, minimum wage rates fluctuate from one province and/or territory to the next. In some provinces, minimum wage is indexed to reflect increases in the cost of living, as well as for the price of consumer products that are needed for basic needs. Payroll must check for updates to employment legislation and make changes to their system accordingly. Increases to minimum wage are often announced by governments well in advance of the legislation coming into effect, giving employers who employ minimum-wage workers a chance to update their systems and adjust.

In Canada, minimum wage is different in each province and territory. There is also a federal minimum wage for federally regulated industries. The table below indicates the current minimum wage amounts in Canada.

Jurisdiction	Minimum Wage	As of (Effective Date)	Updates Annually?
Federal	$17.30/hour	April 1, 2024	Yes, on April 1
British Columbia	$17.40/hour	June 1, 2024	No
Alberta	$15.00/hour	October 1, 2018	No
Saskatchewan	$15.00/hour	October 1, 2024	No
Manitoba	$15.80/hour	October 1, 2024	No
Ontario	$17.20/hour	October 1, 2024	Yes, on October 1
Quebec	$15.75/hour	May 1, 2024	No
New Brunswick	$15.30/hour	April 1, 2024	No
Nova Scotia	$15.20/hour	April 1, 2024	Yes, on April 1
Prince Edward Island	16.00/hour	October 1, 2024	No
Newfoundland and Labrador	$15.60/hour	April 1, 2024	Yes, on April 1
Yukon	$17.59/hour	May 1, 2024	Yes, on April 1
Northwest Territories	$16.70/hour	September 1, 2024	Yes, on September 1
Nunavut	$19.00/hour	January 1, 2024	No

Several jurisdictions have recently opted to update their minimum wage annually on the basis of a formula or standard, such as indexing to the Consumer Price Index. Several other jurisdictions have announced forthcoming minimum wage increases but do not have an ongoing annual rate update.

The Retail Council of Canada maintains an up-to-date listing of provincial and territorial minimum wage rates, which can be accessed here: Minimum Wage by Province. Payroll can and should verify this information by reviewing legislation or checking the appropriate jurisdiction’s employment standards website. Links to employment standards for each province and territory are provided below in section 2.4.3.5 Where to Find Employment Standards Information.

2.5.4 Employment Standards: Other Minimums

Employment standards legislation has a lot of variation across the 14 Canadian jurisdictions, and payroll professionals should be aware of the employment standards in their specific jurisdiction(s) to ensure that the employer is in compliance. Each jurisdiction has a process for employees to follow to resolve situations in which the employer is not following employment standards law.

Some common employment standards that impact payroll are compared below for Alberta, Ontario, and federally regulated workers. There are exceptions and details (such as when an employee becomes eligible for certain rights) that payroll may need to be aware of, and these exceptions and details vary by jurisdiction. It is advisable to review this information by checking legislation or the appropriate jurisdiction’s employment standards website. Links to employment standards websites are provided below in section 2.4.3.5 Where to Find Employment Standards Information.

Minimum Standard	Alberta	Ontario	Federal
Vacation pay (annual)	4% or 6% of wages OR 2 weeks or 3 weeks paid vacation depending on length of employment	4% or 6% of wages OR 2 weeks or 3 weeks paid vacation depending on length of employment	4% to 8% of wages OR 2 to 4 weeks paid vacation depending on length of employment
Holiday pay for statutory holidays (may differ in each jurisdiction) Note: Holiday pay for a day worked is paid at a different rate than than holiday pay for a day off.	Day off: The employee is entitled to their average daily wage. Worked on holiday: 1.5 times regular earnings for hours worked PLUS an amount equivalent to the employee’s average daily wage OR Hours worked × hourly wage, followed by a future day off at their average daily wage	Day off: Holiday pay is 1/20th of the regular earnings and vacation pay of employees in the 4-week period before the holiday. Worked on holiday: Holiday pay as above PLUS 1.5 times regular earnings for hours worked OR Regular wages and another day off at the public holiday rate See Ontario holiday pay calculator	Day off: Holiday pay is 1/20th of the employee’s wages, excluding overtime pay, in the 4-week period prior to the week in which the holiday occurs. Worked on holiday: 1.5 times regular rate of pay See Federal holiday pay calculator
Frequency of pay	Employees must be paid at least once per month.	Employers must pay employees on the regular payday established by the employer.	Employers must pay employees on the regular payday established by the employer.
Termination notice Minimum statutory notice is required when an employee’s job is terminated by the employer on a without-cause basis.	1 to 8 weeks depending on the length of employment OR Pay in lieu of notice	1 to 8 weeks depending on the length of employment OR Pay in lieu of notice	2 weeks notice or 2 weeks regular pay in lieu of such notice, PLUS severance pay of 2 days per full year worked (minimum 5 days’ pay)
Overtime Overtime rates are typically paid after a certain number of hours worked in a day and/or in a week. Rates differ by jurisdiction, as do eligibility requirements. Overtime may be banked; rules about banking vary by jurisdiction, including the rate of pay for banked overtime and the length of time that overtime can be banked before it must be used.	1.5 times the employee’s regular rate of pay after the employee has worked more than 8 hours in one day or 44 hours in one week Many occupations are excluded (e.g., professionals, managers, and some salespersons) Some occupations have exceptions to the overtime rules (e.g., ambulance attendants, truckers, and caregivers) Check Alberta employment standards for complete information.	1.5 times the employee’s regular rate of pay after the employee has worked more than 44 hours in one week Many occupations are excluded or have exceptions to the overtime rules Check Ontario’s special rules and exemptions resource. Exemptions and exclusions are organized by industry and occupation.	1.5 times the employee’s regular rate of pay after the employee has worked more than the standard hours (8 hours in one day or 40 hours in one week) OR Time off with pay equivalent to 1.5 hours of time off for every hour worked There are specific exemptions and different standard hours of work for truck drivers, shipping industry employees, railway trades employees, and commission salespersons in banking and broadcasting.
Averaging agreements Employers and employees can agree in writing to “average” hours when there is variability week-to-week.	Employers can average 1 to 52 weeks pay and either pay overtime for days exceeding 8 hours or calculate overtime at the end of the averaging period.	Employers and employees can agree to average wages over a period of 2 or more weeks (maximum 4 weeks). Averaging agreements must expire within 2 years (for non-unionized employees).	Employers and employees can agree to average hours over a 2-week period or longer; standard (40) and maximum (48) hours apply in each 2-week period and are used to calculate overtime.
Temporary layoffs (time period) A temporary layoff is a “pause” in the employment relationship. Employers must file an ROE. After a certain period of time, if the employee is not recalled, the layoff becomes a termination, and the employee is entitled to termination pay.	Maximum time before a layoff becomes a termination: 90 days total in a 120-day period. The maximum duration of a temporary layoff depends on the reason for the layoff and when the layoff occurred.	Maximum time before a layoff becomes a termination: 13 weeks out of a consecutive 20-week period OR 35 weeks out of a consecutive 52-week period if certain conditions are met (if the employee continues to be paid, if the employer pays into a health or retirement plan, and other conditions listed)	Maximum time before a layoff becomes a termination: 3 months OR 6 months if the employee is given a fixed date or period in which they will be recalled to work OR Indefinitely under certain conditions, such as the employee continuing to be paid and other conditions set by Canada Labour Standards Regulations (s. 30).
Deductions from earnings Each jurisdiction has rules about what amounts may be deducted from employees’ pay, aside from mandatory (e.g., court-ordered wage garnishments) and statutory deductions.	May be deducted: – Set amounts for food and/or lodging – Recovery of overpayment errors, with written notice to the employee – Recovery of vacation pay paid before it was earned, with written notice to the employee – Other amounts authorized in writing by the employee May not be deducted: – Uniforms – Faulty work – Cash losses	May be deducted: – Specific amounts or amounts calculated by a specific method when the employee has authorized the specific amount or method in writing May not be deducted: – Faulty work, including transaction mistakes and broken tools	May be deducted: – Collection of overpaid wages – Amounts authorized by the employee in writing, where the amount is specific, for a particular stated purpose, and with a specified frequency May not be deducted: – Faulty work – Cash losses
Job-protected leaves Different jurisdictions have different leaves that employees may take for specified lengths of time without losing their jobs. These are generally unpaid leaves. The employer should file an ROE if there is an interruption of earnings (there typically will be if an employee is taking an unpaid leave).	12 job-protected leaves, including the following: – Maternity leave (16 weeks, unpaid) – Parental leave (62 weeks, unpaid) – Personal and family responsibility leave (5 days, unpaid) – Critical illness leave (36 weeks for an ill child, unpaid; 16 weeks for an adult, unpaid) – Domestic violence leave (10 days, unpaid) – Bereavement leave (3 days, unpaid)	12 job-protected leaves, including the following: – Pregnancy leave (17 weeks, unpaid) – Parental leave (63 weeks, unpaid) – Family responsibility leave (3 days, unpaid) – Critical illness leave (37 weeks for an ill child, unpaid; 17 weeks for an adult, unpaid) – Domestic or sexual violence leave (10 days, first 5 days paid, then 5 days unpaid) – Bereavement leave (2 days, unpaid)	13 job-protected leaves, including the following: – Maternity leave (17 weeks, unpaid) – Parental leave (63 weeks, unpaid) – Personal leave (5 days, first 3 days paid) – Critical illness leave (37 weeks for an ill child, unpaid; 17 weeks for an adult, unpaid) – Leave for victims of family violence (10 days, first 5 days paid, then 5 days unpaid) – Bereavement leave (10 days, first 3 days paid, remaining days unpaid)

2.5.5 Where to Find Employment Standards Information

Links to government information for each of the 14 Canadian jurisdictions for employment standards are listed below. Legislation can be found on CanLII.org, the Canadian Legal Information Institute website. Government websites often present information about legislation in a manner that is easier to understand than the actual legislation.

Jurisdiction	Link to More Information
Federal	Federal labour standards website
British Columbia	British Columbia employment standards website
Alberta	Alberta employment standards website
Saskatchewan	Saskatchewan Employment standards website
Manitoba	Manitoba employment standards website
Ontario	Ontario employment standards website
Quebec	Quebec CNESST website
New Brunswick	New Brunswick employment standards website
Nova Scotia	Nova Scotia employment standards website
Prince Edward Island	PEI employment standards website
Newfoundland and Labrador	Newfoundland and Labrador employment standards (PDF)
Yukon	Yukon employment standards website
Northwest Territories	Northwest Territories employment standards website
Nunavut	Nunavut Labour Standards website

References

Canada Pension Plan, RSC 1985, c. C-8. (2023). https://canlii.ca/t/549kp

CNESST. (n.d.). Working conditions. https://www.cnesst.gouv.qc.ca/en/working-conditions

Employment Insurance Act, SC 1996, c. 2. (2023). https://www.canlii.org/en/ca/laws/stat/sc-1996-c-23/latest/sc-1996-c-23.html

Government of Alberta. (2024). Employment standards. https://www.alberta.ca/employment-standards.aspx

Government of Alberta. (2024). Employment standards rules – Overtime hours and overtime pay. https://www.alberta.ca/overtime-hours-overtime-pay

Government of British Columbia. (n.d.). Employment standards. https://www2.gov.bc.ca/gov/content/employment-business/employment-standards-advice/employment-standards

Government of Canada. (2024). Hours of work – Federally regulated workplaces. https://www.canada.ca/en/services/jobs/workplace/federal-labour-standards/work-hours.html

Government of Canada. (2023a). Employers’ guide – Payroll deductions and remittances. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4001/employers-guide-payroll-deductions-remittances.html

Government of Canada. (2023b). Federal labour standards. https://www.canada.ca/en/services/jobs/workplace/federal-labour-standards.html

Government of Canada. (2023c). Provincial and territorial tax and credits for individuals. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/provincial-territorial-tax-credits-individuals.html

Government of Canada. (2023d). Remit (pay) payroll deductions and contributions: When to remit (pay). https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/remitting-source-deductions/how-when-remit-due-dates.html

Government of Canada. (2020). General holiday calculator. https://wages.esdc.gc.ca/OLSCT-OCLNT/gen_holiday.aspx?GoCTemplateCulture=en-CA

Government of Manitoba. (n.d.). Employment standards. https://www.gov.mb.ca/labour/standards/index.html

Government of New Brunswick. (n.d.). Employment standards. https://www2.gnb.ca/content/gnb/en/departments/post-secondary_education_training_and_labour/People/content/EmploymentStandards.html

Government of Newfoundland and Labrador, Labour Standards Division. (2023). Labour relations at work. https://www.gov.nl.ca/ecc/files/Publications_Labour_Relations_At_Work_Updates_October-2022.pdf

Government of Northwest Territories. (n.d.). Employment standards. https://www.ece.gov.nt.ca/en/services/employment-standards

Government of Nova Scotia. (2021). Employment rights. https://novascotia.ca/lae/employmentrights/

Government of Ontario. (2023). ES self-service tool. https://www.apps.labour.gov.on.ca/es-self-service-tool/

Government of Ontario. (2023). Government of Ontario. (2023). Minimum wage. https://www.ontario.ca/document/your-guide-employment-standards-act-0/minimum-wage

Government of Ontario. (2022). Industries and jobs with exemptions or special rules. https://www.ontario.ca/document/industries-and-jobs-exemptions-or-special-rules

Government of Prince Edward Island. (2019). Employment standards in PEI. https://www.princeedwardisland.ca/en/information/economic-growth-tourism-and-culture/employment-standards-in-pei

Government of Saskatchewan. (n.d.). Employment standards. https://www.saskatchewan.ca/business/employment-standards

Government of Yukon. (2024). Employment standards. https://yukon.ca/en/employment/employment-standards

Income Tax Act, RSC 1985, c. 1 (5th Supp). (2023). https://www.canlii.org/en/ca/laws/stat/rsc-1985-c-1-5th-supp/latest/rsc-1985-c-1-5th-supp.html

Nunavut Labour Standards Compliance Office. (2024). Home page. https://nu-lsco.ca/faq-s

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