From pensions to garnishments to labour standards, governments are looking at changes that could affect payroll
Federal: Parliament is examining a private member’s bill that would make Remembrance Day a statutory holiday across Canada. NDP MP Dan Harris tabled Bill C-597, An Act to amend the Holidays Act (Remembrance Day), last fall. Private members’ bills rarely pass first reading but Bill C-597 has passed second reading and been referred to a legislative committee for further study. It is not yet known if Parliament will pass the bill and, if it does, whether the legislation would be enacted before this year’s Remembrance Day.
Alberta: Legislation to allow for pooled registered pension plans (PRPPs) in the province is expected to come into effect this year, according to an official with the Alberta Finance Ministry.
PRPPs are defined contribution-style retirement savings plans designed to provide a way of saving for retirement for individuals whose employer does not have its own registered pension plan or for those who are self-employed. Unlike registered pension plans, employers do not have to administer PRPPs. Instead, authorized financial institutions run them. Employers can choose whether or not they want to sign up for a plan. If they do, they will be responsible for enrolling employees, deducting PRPP contributions from employees’ earnings and sending them to the administrator.
Changes to the province’s Employment Standards Code may be coming this year. A year ago, the previous government launched a review of the code to ensure it meets the needs of a changing workforce. Jay Fisher, public affairs officer at the province’s Ministry of Jobs, Skills, Training and Labour, says the ministry is reviewing the results of public consultations on the review and legislative amendments have not yet been written.
British Columbia: PRPP legislation is also awaiting implementation in British Columbia. The provincial legislature passed its PRPP act last year. and it is similar to Alberta’s legislation.
One change that will affect some payroll departments this year is a minimum wage hike on Sept. 15. The province recently published regulations that will raise the general minimum wage rate to $10.45 an hour from $10.25. Other minimum wage rates will also go up at that time. The wage hike comes before a move to tie provincial minimum wage rates to B.C.’s consumer price index in September 2016.
New Brunswick: Legislation to overhaul the province’s judgment enforcement law is expected to take effect this year. It has been almost two years since New Brunswick’s Legislative Assembly passed Bill 56, the Enforcement of Money Judgments Act.
The act would establish new rules for enforcing payment of debts, including the garnishment of employees’ wages. Currently, New Brunswick is the only province in Canada that fully exempts employees’ wages from garnishment (with the exception of wage garnishments to enforce orders for family support covered under the province’s Support Enforcement Act).
Nova Scotia: Nova Scotia has also passed legislation to allow for the creation of PRPPs. The Department of Finance and Treasury Board says it expects the legislation to take effect this year.
Ontario: The provincial legislature is considering a number of bills that would affect payroll departments if enacted. One would allow for the creation of PRPPs. Another would regulate when employers can withhold tips or gratuities from employees or deduct amounts from them.
The legislature recently passed legislation that lays the foundation for the Ontario Retirement Pension Plan (ORPP), a mandatory provincial pension plan, that would be phased in beginning in 2017. It would be structured much like the CPP, with mandatory contributions from employers and employees. Participation would be mandatory for employees and their employers if the individuals are employed in eligible employment in Ontario, are 18 to 70 years old and do not take part in a "comparable" workplace pension plan.
The government has yet to define "comparable," but said it was considering restricting the definition to only defined benefit pension plans and target benefit multi-employer pension plans.
Labour groups generally supported the plan, but called on the government to remove exemptions for employers with "comparable" plans.
"Our reasons for opposing the exemptions are, first, that the CPP doesn’t allow exemptions. It would be difficult for an Ontario plan with exemptions to be folded into an enhanced CPP in the future," said Katha Fortier, Ontario director for Unifor. "(And) if Ontario creates a plan with exemptions, it could become a model for any future CPP enhancement. That would be a step backwards for Canada’s retirement income system."
Business groups expressed concern the ORPP could hurt the employers and threaten defined contribution pension plans and group RRSPs.
"The government would be significantly jeopardizing the health and viability of these plans for employers and for employees’ futures across Ontario," Scott Allinson, vice-president of the Human Resources Professionals Association.
He said a recent survey of association members showed 41 per cent would have to cancel or invest less in their current workplace pension/savings plan or consider staff cuts if the ORPP is implemented with a narrow definition of "comparable."
The Retail Council of Canada expressed concern about the government’s interest in setting the minimum earnings threshold for the ORPP at $3,500, which is the same as the annual basic exemption for the CPP. The council said the threshold should be well above $3,500 to reduce the amount employers and employees have to contribute.
"There is a limit to the payroll contributions that retail businesses in this province can be expected to pay without there being an adverse economic impact," said Gary Rygus, director of government relations for the council.
Quebec: Revenu Québec often implements tax changes long before the provincial legislature has passed legislation to enact them. This is the case with Bill 13, currently before the National Assembly. It would amend the province’s Taxation Act to incorporate a number of measures announced last year and already put in place by Revenu Québec.
The changes include an extra income tax bracket for high earners at a rate of 25.75 per cent and lowering the threshold from three hours to two hours of overtime as one of the criteria for a meal allowance not to be taxable.
They also include an amendment to make employer-paid premiums under a group insurance plan taxable if plan benefits are paid in a lump sum. Although most payroll departments have already adjusted their systems to incorporate these changes, the amendments will officially become part of the province’s tax legislation once the passed.
The legislature is also considering a bill that would consolidate a number of labour-related government organizations, as the government proposed in this year’s budget. The Commission de la santé et de la sécurité du travail (CSST), the Commission des normes du travail (CNT) and the Commission de l’équité salariale would be replaced by a new workplace rights, health and safety commission (Commission des droits, de la santé et de la sécurité du travail). The Commission des relations du travail and the Commission des lésions professionnelles would be replaced by an Administrative Labour Tribunal (Tribunal administratif du travail).
Saskatchewan: The province has not yet enacted its Pooled Registered Pension Plans (Saskatchewan) Act. The legislature passed the act two years ago. Shannon McMillan, director of communications with the Financial and Consumer Affairs Authority of Saskatchewan, says she expects the government to enact the legislation soon.
"Before the act can be proclaimed in force, regulations must be passed. Another important part of the regulatory framework for PRPPs is a multilateral agreement among jurisdictions that will have PRPP legislation in place," McMillan says. "Financial and Consumer Affairs Authority officials are currently working to complete the regulations. They are also working with other jurisdictions to complete the multilateral agreement."
Another legislative amendment that would affect payroll if is a proposal to extend the period in which a notice of seizure of employment income applies from 12 months to 24 months. The proposal is in Bill 162, An Act to amend The Enforcement of Money Judgments Act. The government tabled the bill last fall. It has passed third reading, but still needs to be proclaimed before coming into force.
Currently, if an employee’s wages are to be garnished, the applicable sheriff’s office in the province will send the worker’s employer a notice of wage seizure. This will set out the amount to be garnished and the date it will begin to apply. Unless a notice has an earlier expiry date, it will only apply for 12 months, although it could be renewed for a further 12 months. The amendment would allow the garnishment notice to last up to 24 months before renewal.
The amendments would not affect the exemption rules that apply for employment income. The Enforcement of Money Judgments Act exempts, per pay period, 70 per cent of an employee’s remuneration or $1,500 per month plus $300 for each dependant, whichever is more.
The amendments would also not affect the period in which garnishment notices under The Enforcement of Maintenance Orders Act, 1997 remain in effect. They would continue to apply until the province’s Maintenance Enforcement Office sends the employer a notice withdrawing the garnishment.
