Electronic pay statements

Question: Are there specific legal considerations or liabilities a company should take into account when offering employees the option of an electronic pay statement?

Answer: Only a few provinces have legislated that employers can provide employees with an electronic pay statement (British Columbia, Ontario and P.E.I., all through their respective employment standards legislation). However, an informal poll indicates that most provinces will allow this practice. Manitoba’s Employment Standards website, for example, states that employers can issue electronic pay statements. The legislation permitting electronic pay statements does not require employers to have consent from their employees before issuing electronic statements but, as with any change in an employer practice, it may be prudent to seek such consent. Employers will still be required to provide written statements on request.

The biggest legal considerations for employers issuing electronic pay statements will be to ensure that the statements are confidential, accessible, and comprehensive.

For example, P.E.I.'s Employment Standards Act allows an employer to provide the employee with an electronic pay statement, provided that the employer establishes, at the place of employment, “confidential access to the electronic pay statement and a means of making a paper copy of the electronic pay statement.”

In providing such access, the employer will also need to ensure that the employee is not able to see anyone else's statement or payroll information. Given the Ontario Court of Appeal’s recently recognized tort of invasion of privacy (Jones v Tsige), employers who mistakenly grant an employee access to another employee's payroll records may find themselves liable for mistakenly sharing confidential information.

There is very little case law on the subject of electronic pay statements but, in a recent Ontario Labour Board decision (Instaloans Inc. v. Whalen), a Notice of Contravention was issued to the employer for failing to provide one of its employees with a written or electronic pay statement. Vice-Chair Patrick Kelly later rescinded the Notice because, even though the employee was not able to view her statement online, there was no evidence that the employee had asked for and been denied a written statement or that the employee was unaware that she could be given a written statement.

Electronic pay statements have to be comprehensive. Every province's employment standards legislation prescribes certain information (such as wage rate and number of hours worked) that must be included.

Another factor employers will need to consider is how long the statements are available online. Human Resources and Skills Development Canada, for example, requires that pay statements must remain accessible to employees for three years from the date that the statement was first made accessible electronically.

Finally, if employees are unionized, the employer will want to ensure that making the unilateral decision to issue electronic pay statements does not infringe on the collective agreement.

Issuing electronic pay statements is still relatively new. It is possible that there may be novel legal issues which arise from this practice. However, if employers ensure confidentiality and accessibility, that the statements provide the requisite information and are retained for a sufficient period of time, and that the issuing of the statements does not conflict with any existing employment terms, employers should be able to avoid any legal liability when issuing electronic pay statements.

For more information see:

•Jones v Tsige, 2012 CarswellOnt 274 (Ont. C.A.).
•Instaloans Inc. v. Whalen, 2011 CarswellOnt 3803 (Ont. L.R.B.).