HR rulebook

The new year ushers in new rates

‘Tis the season for a rash of rate changes, including minimum wages, workers’ compensation premiums and income tax. But lots of other changes have taken place lately — and plenty more are in the works for the coming months.

Minimum wages

Prince Edward Island’s minimum wage rate will increase 35 cents an hour, effective April 1. The new rate will be $7.15.

Saskatchewan’s minimum wage went up 40 cents an hour, to $7.05, on Sept. 1, 2005, and will rise another 50 cents per hour on March 1. The rate will be $7.55 per hour until March 1, 2007, when the rate will go up again to $7.95 an hour.

The Yukon Territory is also contemplating minimum wage increases. The Yukon Employment Standards Board has been holding public consultations on the issue, submissions closed Jan. 20. An annual cost-of-living increase is being considered.

Compassionate care leave

Draft amendments to the Employment Insurance regulations have been introduced to change the eligibility criteria for the Employment Insurance Compassionate Care Benefit. The amendments would enable additional family members, as well as other caregivers considered as family by a gravely ill individual, to apply for the benefit. The amendments have not yet become law; nor had any corresponding amendments been introduced at the provincial level to allow employees protected leaves of absence while providing compassionate care.

Hours of work for bankers

Draft regulations under the Canada Labour Code entitled “Banking Industry Commission-paid Salespeople Hours of Work Regulation” would enable domestic banks to better compete with provincially regulated financial services providers, where commission-paid salespeople are free to set their own hours of work. Commission-paid salespeople employed in the banking industry will have the freedom to set their own hours of work, and to meet with their clients when the clients are available, once the regulations become law.

Termination and severance pay

Ontario Regulation 549/05 under the Employment Standards Act, 2000 amended the Termination and Severance of Employment Regulations, O. Reg. 288/01, effective Oct. 28 last year. Under the regulation, termination and severance pay are not required to be paid where employment ends due to the frustration of contract or the impossibility of an employee performing due to an unforeseen event. Under the recent amendment, frustration due to illness or injury is specifically excluded from this exclusion. This means that employees who become unable to perform their jobs due to illness or injury — sometimes referred to as “innocent absenteeism” — are still entitled to termination and severance pay under the act. The amendment is a reaction to last year’s Court of Appeal ruling in Ontario Nurses’ Association v. Mount Sinai Hospital (2005), 75 O.R. (3d) 245 (C.A.), which ruled that a similar predecessor provision was a breach of Canadian Charter of Rights and Freedoms.

Pensions

Alberta Bill 203, Canada Pension Plan Credits Statutes Amendment Act was proclaimed in force effective Oct. 1, 2005. Bill 203 states that spouses or common-law partners may agree that, notwithstanding the Canada Pension Plan, there is to be no division between the parties of unadjusted CPP pensionable earnings. Agreements must be in writing, and are valid if dated on or after June 4, 1986, unless one of the parties was induced to enter into the agreement by fraud, duress or undue influence, or lacked the mental capacity to understand the nature of the agreement.

Ontario Bill 18, An Act to Implement 2005 Budget Measures and Amend Various Acts, received first reading last Nov. 2. If passed, it will amend the Pension Benefits Act to:

-create a new class of pension plan, the jointly sponsored pension plan (JSP), which is defined as a defined benefit plan where both the employer plan sponsor and the employee plan members contribute to the plan’s funding. Specifically, both parties share in the ongoing plan costs, and both parties must finance any unfunded shortfalls, if they occur. JSPs have actually existed for a number of years, particularly in the public sector, but have not been legislatively recognized;

-oblige members of JSPs that provide contributory benefits to make contributions, including contributions in respect of any going concern unfunded liability and solvency deficiency;

-allow corporations made responsible by an act of the legislature to act as the administrator of a pension plan; and

-govern the situation where an administrator is also the trustee of the pension fund.

If passed, these amendments will come into force on the day Bill 18 receives royal assent, and will take effect retroactive to Dec. 31, 2004.

Workers’ compensation

WorksafeBC is adopting a new penalty structure for employers that do not report their payroll or pay premiums as required. Set to come into force in March, the new penalty structure will be based on a sliding scale and include standard, fixed penalties for both non-reporting of payroll and non-remitting of payments. The minimum penalty will be $50 and will increase according to an employer’s premiums.

British Columbia announced a 3.6-per-cent decrease in the 2006 overall premium rate for employers. The reduction reflects recent years’ trends of stable injury rates and lower duration of injuries. The 2006 aggregate base rate is $1.90 per $100 of assessable payroll, compared to $1.97 in 2005.

Newfoundland and Labrador is reviewing its workers’ compensation system. A statutory review occurs every five years by law. Stakeholders can participate through public meetings, written submissions and roundtable discussions. The review committee is expected to report to government with recommendations by March 31.

The Workers’ Compensation Board (WCB) of the Northwest Territories and Nunavut has announced the average assessment rate for 2006 will not change, remaining at $1.87 per $100 of assessable payroll. There will be an increase to the year’s maximum insurable remuneration from $66,500 to $67,500. In addition, the WCB has changed the way it calculates assessment rates. Effective Jan. 1, the WCB is calculating assessment rates based on the past five years of claims experience of a subclass. The WCB has also combined particular subclasses and reduced the total number of subclasses from 29 to 23.

Effective last Nov. 1, Ontario employers are required to use a new Employer’s Report of Injury/Disease (Form 7) to report injuries and illnesses to the Workplace Safety and Insurance Board (WSIB). Similarly, the new Worker Report of Injury/Disease (Form 6) will be used by workers. Both forms can be downloaded from the WSIB’s website, www.wsib.on.ca.

The Saskatchewan Workers’ Compensation Board (WCB) has proposed a 6.6-per-cent decrease in employer premium rates for 2006. Acceptance of the proposal by employers and WCB board members will mean a drop in the average net premium rate of 13 cents from $1.97 to $1.84 per $100 of payroll. If accepted, the change will take effect as of Jan. 1 this year.

The Yukon Workers’ Compensation Health and Safety Board will introduce an incentive program for employers for 2007, due to a rise in claims from $15.7 million in 2003 to $19.5 million in 2004. As well, the board has reduced subsidies and is adjusting employers’ assessment premium rates for 2006. The average assessment rate will be $2.16 per $100 of payroll in 2006, compared to $1.74 in 2005. Employers with the highest claims costs face the highest increases, while those with low claims costs are seeing decreases.

Occupational health and safety

New Brunswick introduced Bill 13, An Act to Amend the Occupational Health and Safety Act, on Dec. 9, 2005. The bill would amend the existing act by, among other things:

-altering the definition of “health and safety representative”;

-setting a timetable for ongoing inspections;

-requiring employers to develop inspection programs and share results with the health and safety representative;

-requiring health and safety committee members to have training as stipulated by the act; and

-requiring employers to grant paid leave for safety committee members to attend educational programs.

If passed, Bill 13 will come into force by proclamation.

Human rights

The Alberta Human Rights and Citizenship Commission has developed two new publications to help the parties involved in human rights complaints understand the commission’s complaint process. They are The Human Rights Complaint Process: A guide for complainants; and The Human Rights Complaint Process: A guide for respondents.

Employment Insurance

The federal department of Human Resources and Skills Development Canada has introduced draft Regulations Amending the Employment Insurance regulations. The purpose of the proposed regulatory amendments is to provide a system for premium reduction under subsection 69(2) of the Employment Insurance Act for provinces that establish their own maternity/parental benefits plans and for which there is a signed agreement with the government of Canada. The regulations also adapt the Employment Insurance legislation to facilitate the coexistence of the EI program and provincial plans. The intention is for these regulations to be put in place in time to facilitate the implementation of the Quebec Parental Insurance Plan on Jan. 1, 2006.

Daylight saving time

Manitoba introduced legislation to extend daylight saving time in the province by four weeks. Starting in 2007, daylight saving time would start on the second Sunday in March and end on the first Sunday in November. The change would mean that clocks would be advanced three weeks earlier in the spring and set back one week later in the fall. The decision was made after the United States passed a law in an omnibus energy bill that extends daylight saving time in the U.S. beginning in March 2007. Ontario has also announced its intention to adopt extended daylight saving time to mirror the U.S. changes.

Privacy

Ontario’s Information and Privacy Commissioner has released Privacy Impact Assessment Guidelines for the Personal Health Information Protection Act. The self-assessment tool was developed to assist health information custodians in reviewing the impact that a proposed information system, technology or program may have on the privacy of individuals’ personal health information. The guidelines workbook is available online, in PDF format at www.ipc.on.ca

Income tax

A Notice of Ways and Means Motion has been tabled to amend the Income Tax Act regarding employee stock option plan (ESOP) expenses. The motion responds to a recent Tax Court of Canada decision involving shares issued under an ESOP. The employees paid less than the value of the shares at the time they were issued. The Court allowed the corporation to treat the difference as a scientific research and experimental development (SR&ED) expenditure qualifying for SR&ED tax credits.

The proposed amendments ensure that no expenditure will be considered to have been made by a taxpayer except to the extent of an actual outlay or expense. A related proposal will ensure that a taxpayer cannot deduct SR&ED expenditures, nor receive tax credits, if the taxpayer takes more than the additional 12 months allowed to make a claim under the act.

The automobile expense deduction limits and the prescribed rates for the automobile operating expense benefit will apply in 2006 as follows:

-the ceiling for capital cost allowance (CCA) purposes (passenger vehicles) will remain at $30,000 for purchases after 2005;

-the limit on deductible leasing costs will remain at $800 per month for leases entered into after 2005;

-the maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2005;

-the limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes will increase by five cents to 50 cents per kilometre for the first 5,000 kilometres driven and 44 cents for each additional kilometre; and

-the general prescribed rate determining the taxable benefit for the personal portion of automobile operating expenses paid by employers will increase by two cents to 22 cents per kilometre.

Sari Sanders is a lawyer and head of Hewitt Canada’s research group. She may be contacted at (416) 225-5001 or [email protected].

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