Employment Standards: Why Ignorance is Not Bliss for Employers

Lawyer Erin Brandt (nee Kizell)Erin Brandt Vancouver Startup Week, Contributor.

Ignorance of the law is no excuse.

Lawyers know this idiom well, since it’s one of the first things taught in law school. Unfortunately, some non-lawyers are not familiar with it and, even when they are, may not have a full understanding of its implications.

A group of Ontario employers recently learned what it means the hard way.

Earlier this year, following a “proactive inspection blitz”, the Ontario Ministry of Labour found that 78% of the 304 workplaces it investigated had violated the province’s employment standards legislation. The most common monetary infractions related to overtime, statutory holidays, and vacation pay. Following the inspections, the Ministry collected $361,000 in unpaid wages from the law-breaking employers.

In a news story covering the blitz, the Toronto Star reported that of the 14 employers it contacted, most claimed the infractions were “unintentional” and resulted from confusion about their legal obligations. One employer was even quoted as saying “no one ever told me of my responsibilities”.

In our experience, such blanket employer ignorance is rare. We know that most employers want to do the right thing by their employees, and that they take the necessary steps to make sure that they do. But we also know that legal compliance is only one of a business owner’s many priorities.

While it’s beyond the scope of this blog post to summarize all of an employer’s obligations under the BC Employment Standards Act (ESA), we were inspired by the Ontario inspections to offer a “refresher” on the three employment standards areas that caused the most trouble for Ontario employers: overtime, stat holidays, and vacation pay.

As in Ontario, the BC Employment Standards Branch (ESB) can investigate employers to ensure they are complying with the ESA, whether or not the ESB has received a complaint from an employee. And, as in Ontario, BC employers who violate the ESA are on the hook for any unpaid amounts and subject to monetary penalties, starting at a minimum of $500.

So, it’s important that you know your stuff! Here are a few basics to get you started:

Overtime

Part 4 of the ESA deals with hours of work and overtime. Some of the highlights:

  • Employees may work a maximum of 8 hours a day or 40 hours a week before being entitled to overtime pay.
  • If you “directly or indirectly” allow an employee to work beyond these hour thresholds, you must pay her overtime. This means that even if you didn’t require her to work those extra hours, but simply allowed her to do so, you are still liable for overtime.
  • Generally speaking, if an employee works more than 8 hours a day, the employer must pay her “time and a half” for the next four hours she works in that day, and double time for all hours she works in excess of 12 hours in a day. These overtime entitlements apply even if the employee works less than 40 hours in that week. Similarly, if an employee works more than 40 hours in a week, he must receive “time and a half” after 40 hours worked, even if he never works more than 8 hours in a day that week.
  • Employees are entitled to a 30 minute unpaid meal break after a certain number of hours of work, and to a minimum amount of pay for reporting to work.
  • Averaging agreements and overtime banks are both permitted, subject to the conditions set out in Part 4.

To learn more about your OT obligations, check out our Top 10 Overtime Tips for Employers here.

Statutory Holidays

“Stat” holidays are covered in Part 5 of the ESA, which includes the following rules:

  • An employee is eligible for statutory holiday pay if she has been employed for 30 calendar days prior to the holiday and has worked or earned wages on at least 15 of those 30 days.
  • An eligible employee who works on a stat holiday is entitled to be paid time-and-a-half for the first 12 hours worked and double-time for any work over 12 hours, plus an average day’s pay (as calculated under the ESA).
  • If an eligible employee is given the day off on a statutory holiday, or the stat falls on a regular day off, the employee is entitled to receive an average day’s pay.

For a list of the ten statutory holidays in BC, see section 1 of the ESA.

Annual Vacation

Part 7 of the ESA deals with employee vacation, including the number of weeks off work an employee is entitled to annually, as well as the annual vacation pay owed to all workers (4% initially, which increases to 6% after five completed years of employment). The ESA does not permit an employee to forego an annual vacation and only receive the pay; employers must ensure that employees take time off for their annual vacation and receive their vacation pay.
Bottom Line

Our goal with this post is to offer a high level overview of three areas of your employment standards obligations to your employees.

We recognize that there’s a lot to know and that, sometimes, the wording of the ESA or other employment-related legislation can be a bit…confusing. If you’re unsure of your responsibilities regarding OT, stat holidays, or vacation pay (or any other area of the ESA, for that matter), the ESB offers a variety of online resources, in the form of Fact Sheets and Guidelines, that you may find useful.

If you still have questions, we encourage you to contact the ESB directly, or consult with your employment lawyer. As the Ontario inspection blitz shows, when it comes to employment law, ignorance is not bliss.

Have questions about your employment standards obligations? Contact us!


NOT LEGAL ADVICE. Information made available on the Kent Employment Law website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action, based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. One of our lawyers would be pleased to discuss any specific legal concerns you may have.

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