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Canadian Labour Laws for Small Business: Part One

by | Sep 30, 2021 | Blog | 0 comments

Starting your own business means wearing a whole lot of different hats, at least at the beginning. Head of Production, V.P. Marketing, HR Director. One hat you want to be careful about wearing is Head of Legal. Canada’s labour laws as outlined in the Employment Standards Act, can be difficult to navigate, and misinterpreting them can be costly. Best to hire the knowledge. But until you can afford it, knowing these 8 standards should keep you on the right path (Much of the information below is taken from the Canadian Labour Code – the Code – and some of what follows is particular to Ontario and Bill 148, the The Fair Workplaces, Better Jobs act and how it changes standards in that province. So it is best you become familiar with the standards particular to your province or territory.)
  1. Minimum Wage
    Before you hire them, you best know what you need to pay them. Here are the Provincial and Territorial minimum wages:

    British Columbia – $15.20
    Alberta – $15.00
    Saskatchewan – $11.45
    Manitoba – $11.90
    Ontario – $14.25
    Quebec – $13.50
    New Brunswick – $11.75
    Nova Scotia – $12.95
    Prince Edward Island – $13.00
    Newfoundland and Labrador – $12.50
    Yukon – $13.85
    NWT – $13.46
    Nunavut – $16.00

    Some provinces and territories may have different minimum wages for students under 16 years of age, servers of alcohol as well as some nature and hunting guides. Good idea to make yourself familiar with the policies pertinent to your business.

  2. Hours of Work
    Across the country, the standard work hours are 8 hours in a day and 40 hours in a week (or 7.5 hours a day and 37.5 hours a week when you subtract breaks), 

    During these hours, employees can take one15-minute break in the morning and another in the afternoon. When it comes to overtime pay, the usual rate in every Canadian province is 1.5 times the hourly rate of the employee. Overtime pay usually kicks in after the employee goes over 40 hours per week. In some provinces, employees can take time off as compensation for overtime worked instead of pay, often referred to as “lieu time.”

  3. Paid Vacation
    All employees who have been working for the same company for 5 years or more are now entitled to 3 weeks paid vacation instead of 2. Employees with under 5 years of service will still get 2 weeks paid vacation. It remains up to the employers to grant or deny requests for multiple periods of vacation, considering the impact it will have on operations. The Code does spell out the circumstances surrounding when these requests can be made, so employers may want to develop internal criteria for such requests, as well as procedures for processing the requests, which must be done in writing.
  4. Termination Notice & Pay
    Canadian employment laws protect employees from being laid off or dismissed without proper notice or compensation. When terminating an employee, you need to give them written notice, termination pay instead of notice or a combination of both. An employee is obligated to work until the end date specified on the notice. The amount of notice or pay received will depend on how long an employee has been with you. Every termination will undergo a process and should be based on applicable law. 

    You also need to keep records of each employee. Canada’s Ministry of Labour employment standards officer, as well as provincial labour boards, expect employers to have documented records on each employee. Terminating an employee is never pleasant. Maybe worse for small business as you probably have closer relationships than you might in a big company. If you don’t have an HR professional yet, do a little research and find out how to make the process easier for everyone involved.

  1. Three Hours Minimum Pay Rule
    An employee that usually works three hours of work or more per day that shows up and receives less than three hours must still be paid for three hours. This is also true if a shift is cancelled within 48 hours or less and the employer does not tell the employee. Also, on-call workers must be paid for a minimum of three hours work for every 24 hours they are on call, even if they don’t work.
  2. No Sick Notes Required
    Employers can no longer demand a doctor’s note when an employee calls in sick. The reason? Employees often go into work to hand in the note, giving the virus plenty of opportunity to infect other staff. It also cuts down on paperwork for  the doctors who presumably, have more important things to tend to.
  3. Equal Pay for Equal Work
    The new equal pay provisions in the Employment Standards Act (ESA)  prohibit employers from paying one employee a lower wage than a co-worker doing substantially the same job because of a difference in their employment status. Workers can request a pay review if they feel they are getting the short end of the stick. If there is a discrepancy, the employer must either adjust the employees pay or issue a written letter explaining the discrepancy. The legislation also ensures the employer cannot reduce the full-time worker’s pay to maintain consistency.

As we stated, Canadian Labour Laws and standards can be difficult to get a handle on. While the above information should in no way be considered legal advice, it should answer some of the questions you have about how they relate to your business. 

It was decided that we would impart this information in three parts so as not to give you too much to digest in one reading. The next two articles will look at the new and different Personal Leaves available, and the other Acts that every small business owner should acquaint themselves with including the Occupational Health & Safety Act, the Employment Equity Act and the Human Rights Act.