An act of understanding

Mention Canada’s legislative process and you may get blank stares, a glazed look of boredom or anger at perceived waste or injustice in the country’s legislatures. However, the steps involved in turning an idea (a bill) into a legislated act are a fundamental part of our democracy.

For payroll, legislation is a big part of the job. The Canadian Payroll Association says there are over 190 laws and regulations with which payroll professionals must comply. For those who want to stay on top of legislative and regulatory changes, it is essential to have at least a basic understanding of the legislative process.

Knowing that a bill has been tabled can give you a heads-up that changes may be coming. Knowing where a bill is in the legislative process can give you an idea of when you have to start preparing to implement it.

Laws get their start as bills. The process of creating or amending a law can be lengthy and complicated or short and simple, depending on the subject.

Legislation affecting payroll can come from the federal government (such as CPP, EI, income tax, GST/HST and the Canada Labour Code) or a provincial/territorial government (such as employment standards, workers’ compensation or payroll levies).

Regardless of the subject, though, the legislative process is steeped in tradition and rules.

As the House of Commons Compendium points out: "(T)here is a clearly defined method for enacting legislation. A bill must go through a number of specific stages in the House of Commons and the Senate before it becomes law."

The steps for provincial/territorial bills are the same as those for federal legislation, with the exception that there are no Senate stages.

Bills can be brought forward by cabinet ministers or by members of the House of Commons who are part of the government (called backbenchers) or by members of the opposition parties.

Cabinet ministers’ proposals are known as government (or public) bills, while those introduced by other members of the legislature are called private member’s bills.

A government bill is much more likely than a private member’s bill to pass all stages and become law; however, there are instances in which private member’s bills do make it.

A payroll-related example includes a 2007 Nova Scotia bill that amended the Labour Standards Code to require employers to provide employees with a 30-minute rest or meal break after five consecutive hours of work.

Currently, the House of Commons is considering a private member’s bill that would make Remembrance Day a statutory holiday observed across the country.

At press time, it was not known whether the bill would succeed but, if so, it would be one of the rare cases where a private member’s bill made it all the way through the legislative process.

Before a bill can be tabled in the legislature, the cabinet minister or the member of Parliament responsible for it must notify the House of Commons 48 hours in advance of his intention to introduce a bill.

The tabling of a bill is called first reading. It formally begins the legislative process. Before this reading, though, the government sometimes presents the legislation in draft form and requests public feedback.

The federal finance department often releases proposed tax changes for comment before the finance minister tables the changes in a bill in the House of Commons.

Sometimes when governments plan major legislative changes, they seek public comment before writing or finalizing a bill.

When the Saskatchewan government decided to consolidate 12 labour-related acts into one a couple of years ago, it first released a discussion paper on the topic to get feedback on possible changes.

It used the feedback when drafting the Saskatchewan Employment Act, which came into force earlier this year.

When a bill is given first reading, it means the minister or member sponsoring the bill rises in the legislature to give a brief summary of the proposed legislation.

Copies of the bill are then printed and given to all members of the House of Commons.

First reading is also the time when the bill is assigned a number. Federal bills originating in the House of Commons begin with a "C" while those beginning in the Senate start with an "S."

Some jurisdictions use a specific numbering system to designate a government bill from a private member’s bill.

Next up is second reading and the committee stage. Members of the legislature debate the purpose and "general scope" of a bill during second reading. In some cases, second reading will quickly follow first reading.

Other times, it may not take place until later in a legislative session.

During second reading, there may be lengthy debate about the bill’s purpose and scope. Once the debate is over, members vote on whether the bill should proceed.

If the majority vote for it — which is usually the case with bills that cabinet ministers in a majority government sponsor — the bill passes second reading. It is then usually referred to a committee, where a group of legislative members scrutinize it clause by clause. The committee can choose to conduct hearings and call upon expert witnesses and interested parties to provide input into the proposals.

The committee may approve the bill as is or recommend amendments to it. When the committee is finished, it submits a report to the House of Commons, including any amendments.

At the report stage, other members of the legislature (especially those who were not on the committee studying the bill) can recommend amendments. The members of the legislature then debate and vote on all of the changes.

After any amendments are reviewed, the minister or member responsible for the bill moves that the bill be given third and final reading.

At this point, members have a last opportunity to debate the bill in its final form. If a majority vote for the bill, it passes third reading, moving closer to becoming a law.

If payroll professionals have printed off a copy of a bill at first reading, it is a good idea to print or read the final version of the bill in case it was changed at the committee stage.

In provincial and territorial legislatures, the next step is royal assent. At the federal level, though, once the House of Commons passes a bill, it sends the bill to the Senate. There, it must go through a similar process, with three readings, committee study and votes. The Senate may approve the bill with or without any changes.

If it amends the legislation, the bill goes back to the House of Commons, where members decide whether to accept the Senate’s amendments.

If they accept them, royal assent happens shortly afterwards. If the House does not accept the amendments, it informs the Senate and the Senate decides whether it still wants the changes.

If the two bodies cannot agree, there is a formal procedure for resolving the disagreement, although it is rarely used.

Once the House and the Senate pass the bill in identical form, the bill is ready for royal assent. This is where the governor general formally approves the legislation. In provincial and territorial legislatures, assent is given by the jurisdiction’s lieutenant governor or commissioner.

Some acts come into force as soon as they receive royal assent. Others take effect on a date specified in the legislation (it could be on a future date or be implemented retroactively). Other acts do not come into force until proclamation, which means that the governor general (or the provincial or territorial representative), on the advice of the federal (or provincial) cabinet, issues an order stating an act will come into force on a specified date.

The implementation date is important for payroll because that is when they must make sure they are complying with the new law.

Sometimes, there is a lot of advance notice of when an act will come into effect, giving payroll departments time to implement the changes, even if they were previously unaware of them.

Other times, it will apply right away or retroactively, requiring payroll to make changes immediately or to go back and implement them.

The best way for payroll to stay on top of legislative changes is to be aware of what governments are proposing so they can take steps to prepare for it in advance, says Annie Chong, manager of Carswell’s Payroll Consulting Group.

"My advice for employers is to be mindful of the upcoming changes and that proposed legislation will become law," she says.

"It’s just a matter of time. If necessary, they should start having a conversation with their payroll service provider/vendors in preparing for implementing changes to the system. Employers should be prepared in advance for any updates once the legislation is enforced."

While many of the requirements with which payroll must comply are set out in acts, some rules come from regulations under those acts. For instance, minimum wage requirements are often found in regulations rather than the acts themselves.

Unlike acts, regulations do not have to go through a legislature to have legal effect.

Governments often publish draft regulations in a publication called a Gazette and may ask for public feedback on them.

The final regulations are published in the Gazette, with the in-force date being the date the regulation is registered or a date specified in the regulation. Most jurisdictions provide free online access to their Gazette.

It is understandable that most payroll professionals are too busy with their day-to-day responsibilities to closely follow every bill’s progress through the legislative process.

However, it is a good idea to periodically check on the status of proposed legislation through payroll hotlines or publications or by going directly to the legislature websites.

Knowing how the legislative process works can help to give payroll professionals a heads-up on changes that may be coming and when they will need to implement them.