Several legislative initiatives could affect the industry
Payroll professionals have to know more than just the mechanics of processing payroll. To help their employer comply with federal and provincial/territorial rules related to employment, payroll professionals must keep up to date on legislative and regulatory changes.
While governments announce and implement some changes very quickly, they can take months or even years to enact others. For busy payroll professionals, it can be challenging to keep track of all of the legislative developments, especially for those who operate in more than one jurisdiction.
To help make it a little easier, here is a look at the status of some payroll-related legislative proposals/developments across Canada:
Federal:
Legislation to enhance the Canada Pension Plan (CPP) continues to make its way through
Parliament. At the end of November, the House of Commons passed Bill C-26, An Act to amend the Canada Pension Plan, the Canada Pension Plan Investment Board and the Income Tax Act. The Senate must still pass it. The bill would implement an agreement in principle that the federal government and all provinces but Quebec signed last summer.
The bill proposes to raise CPP retirement benefits from one-quarter of pensionable earnings to one-third. To fund the increase, Bill C-26 would gradually raise contribution rates on earnings up to the yearly maximum pensionable earnings (YMPE) between 2019 and 2023, with the rate eventually rising to one percentage point more than it is now (4.95 per cent).
Beyond the CPP, the federal government is considering changes to the Employment Insurance (EI) system and the Canada Labour Code to help parents and caregivers. While changes to the code would only affect federally regulated workplaces, they could influence provinces and territories to amend their labour standards rules in a similar way.
Last year, the government held consultations on issues such as flexible work arrangements and unpaid leaves for parents and caregivers. It also carried out consultations on EI service quality, which could bring changes to the way employers complete Records of Employment.
These changes to EI or the code may not occur this year.
Alberta:
While no payroll-related bills are currently before the legislature, the provincial government is continuing with consultations into possible workers’ compensation and employment standards amendments.
A review panel studying Alberta’s workers’ compensation system released a progress report in November highlighting the input it has received so far from employers, workers, industry associations and others.
The panel is looking at a number of workers’ compensation issues, including employer funding. In the progress report, the panel noted that some stakeholders want the Workers’ Compensation Board (WCB) to be more open about how it sets premium rates.
The panel is expected to submit a final report and recommendations to the government in the spring.
Amendments to the Employment Standards Code to repeal a number of exemptions that apply to agriculture workers are still to be enacted. The provincial legislature passed the amendments in late 2015, but the government has delayed implementing them until it finishes consulting with industry stakeholders. Consultations began last summer and will continue into 2017.
Once the amendments take effect, employees employed on a farm or ranch whose jobs are directly related to the primary production of eggs, milk, grain, seeds, fruit, vegetables, honey, livestock, bees, poultry, etc., would be protected by the code’s standards for hours of work, overtime, statutory holidays, vacations and minimum wage, among other provisions.
Manitoba:
The provincial government has launched a review of Manitoba’s Workers Compensation Act. By law, there must be a comprehensive review every 10 years.
A committee reviewing the act released a discussion paper last fall, asking for feedback on a number of issues, including funding, the need for an employer advisor office, and whether there should be an assessable earnings ceiling for workers’ earnings. Although employers pay premiums up to an annual maximum amount per worker, there is no yearly maximum for wage loss benefits that the Workers Compensation Board pays to workers injured after 2005.
Comments on the discussion paper are due by Feb. 15. The committee says it plans to submit a final report to the government by the end of June.
The provincial government is also continuing to review Manitoba’s minimum wage rate. Last fall, it asked for feedback from provincial residents and its Labour Management Review Committee. The general minimum wage rate in Manitoba is $11.00 an hour.
New Brunswick:
Employers in New Brunswick may see changes to the Employment Standards Act this year. Last fall, the government released three discussion papers asking for feedback on minimum wage, youth employment and coverage.
The government is reviewing the feedback and may table amendments this winter.
One long-standing legislative change that is expected to come into force this year is an overhaul of the province’s judgment enforcement law. In 2013, the legislative assembly passed the Enforcement of Money Judgments Act, which sets out new rules for repaying debts, including allowing employees’ wages to be garnished.
Nova Scotia:
The provincial legislature is considering two private members’ bills that would affect labour standards if passed. While most private members’ bills never become law, it is important to be aware of them in case they get majority support and pass.
One bill would increase the minimum amount of vacation time to which employees are entitled. It proposes that employees have three weeks of vacation each year for the first 10 years of employment and four weeks after 10 years. Currently, employees are entitled to two weeks’ vacation in the first eight years, rising to three weeks after eight years.
The second bill would require the government to gradually raise the general minimum wage rate to $15.00 an hour by 2019 and would eliminate a separate rate for employees with less than three months of experience. The minimum wage rate is currently $10.70 an hour ($10.20 for those with under three months’ experience).
Ontario:
This year, the Ontario government is expected to release a final report and recommendations from its Changing Workplaces Review advisors.
In 2015, the government appointed lawyer Michael Mitchell and former Justice John Murray to review the Employment Standards Act, 2000 and Labour Relations Act, 1995 and make recommendations on changes that would “better protect workers while supporting businesses in our changing economy.”
Last summer, the advisors released an interim report that put forward a number of possible options for reforming the two laws. They asked for public feedback on a wide array of provisions, including the following for employment standards:
• legislating the length of pay periods
• increasing the minimum period for annual paid vacation from two weeks to three
• simplifying the rules for calculating statutory holiday pay
• reducing the overtime pay threshold from 44 hours to 40
• adding new unpaid leaves
• requiring paid sick days
• changing the requirements that apply for personal emergency leave
• changing the maximum number of weeks of notice employers must provide to employees for termination (currently eight weeks)
• reducing or eliminating eligibility criteria for severance pay
• eliminating some exemptions and special rules allowed under the act
• adding a new category of employee, called a dependent contractor.
Once the government releases the final report, it may provide details on what, if any, amendments it may make to the Employment Standards Act, 2000.
As the year progresses, these jurisdictions and others may announce more payroll-related legislative or regulatory changes.
With numerous acts and regulations governing the employment relationship, it is likely that payroll professionals will be busy again this year keeping tabs on amendments and new requirements.
