Company argued worker worked for minimum wage, but salary indicated otherwise
The British Columbia Employment Standards Tribunal has dismissed an employer’s appeal arguing that the calculation of a salaried employee’s wage rate for unpaid wages and overtime pay should be based on minimum wage.
Cactus Flower Restaurant operates a hotel and restaurant in Osoyoos, BC, called the Sol Grill Room and Lounge. The worker started working there on March 14, 2021, as a guest services agent at the hotel. However, two days later, he transferred to the restaurant side of the business as a supervisor with an hourly wage of $16.
A short time later, on April 1, the worker was promoted to the position of restaurant manager and his wage was changed from hourly to an annual salary of $45,000. On July 1, he received a raise to $52,000 per year and he was paid a set amount of wages each pay period, regardless of how many hours he worked.
The worker’s employment ended on Oct. 11, 2021. The next day, he filed a complaint under the BC Employment Standards Act (ESA) alleging that Cactus Flower failed to pay him all his wages, including overtime pay.
Cactus Flower argued that the worker was a manager and was exempted from overtime pay under the ESA.
Worker owed wages, overtime pay
A delegate of the Director of Employment Standards investigated. Cactus Flower agreed that the worker normally worked a minimum of 40 hours per week, with seven-to-eight-hour shifts over six or seven days each week.
The delegate found that the worker didn’t meet the ESA definition of a manager because his principal duties did not consist of supervising or directing employees or the employer’s resources.
In order to determine the amount of wages owing, the delegate found that the employee’s regular wage was based on a normal work week of 40 hours. To calculate the worker’s wage rate, the delegate broke down the worker’s salary as a manager divided by 52 weeks and then divided that number by 40 hours, arriving at $21.63 per hour from April 1 to June 30, 2021, and then $25 per hour after the July 1 raise.
Using these figures, the delegate referred to records of the worker’s hours and wage statements and determined that the worker was entitled to $10,690.90 in regular wages, overtime page, vacation pay, and interest.
Weekly hours, wage rate wrong: employer
Cactus Flower appealed the decision to the BC Employment Standards Tribunal. The company didn’t dispute the finding that the worker wasn’t a manager, but it contended that new evidence had become available that was not available at the time the determination was made.
The company argued that the calculation of the worker’s wages was incorrect, as his salary was based not on 40 hours per week, but rather on the “hours required to accommodate the restaurant’s workload each day.” In addition, the worker received tips that were improperly paid, the company said in maintaining that minimum wage should have been used in the wage calculation.
Cactus Flower also submitted a document showing the hours that the restaurant was open during the worker’s tenure, the worker’s “punched” hours, the amount of tips the worker received, and the restaurant’s revenue. It pointed out that the hours submitted by the worker were higher than the number of hours that the restaurant was open.
Finally, the company provided a summary of the restaurant’s revenue during the worker’s employment showing that business was slow during the COVID-19 pandemic and wildfires in the area, and there was no reason for extended hours at that time.
Introduction of new evidence
The tribunal noted that in order for an appeal an employment standards determination on the basis of new evidence that wasn’t available at the time of the determination, the evidence itself “could not, with the exercise of due diligence, have been discovered and presented to the director during the investigation or adjudication of the complaint and prior to the determination being made.”
The tribunal found that the documents were only indirectly related to the worker’s hours and were not as useful as the record of daily hours and wage statements provided by both parties during the delegate’s investigation and weren’t disputed by the company. In addition, Cactus Flower provided no indication that the documents could not have been provide during the investigation, the tribunal said.
The tribunal noted that the company seemed not to be really introducing fresh evidence, but instead was arguing that the delegate made an error of law in how the worker’s regular wages were calculated. Cactus Flower argued that the worker’s regular wages should have been calculated using minimum wage, but it didn’t provide a basis for that argument given the worker’s salary, said the tribunal.
The tribunal determined that the delegate’s calculation of the worker’s regular wage was reasonable and dismissed the company’s appeal. See Cactus Flower Restaurants Ltd. (Re), 2024 BCEST 7.
