Payroll professionals have many legislative initiatives to track
It is essential that payroll professionals stay on top of legislative and regulatory changes to ensure they comply with the rules; however, this can be challenging for busy payroll professionals, especially if they pay employees in multiple jurisdictions.
To help make it a little easier, here is a review of some payroll-related legislative initiatives in various Canadian jurisdictions:
Federal
Recently passed amendments will bring a variety of payroll-related changes in the coming months and years.
Beginning with 2017 year-end reporting, Income Tax Act amendments will allow employers to deliver T4s to employees electronically (with some exceptions) without their written consent. To do so, employers must provide a secure electronic portal for employees to access and print their T4, and give the option to receive paper copies of the form if workers request it. Like the T4 change, Quebec’s parallel RL-1 measure would begin with 2017 year-end.
Earlier this year, Parliament passed amendments that will raise the income replacement level for Canada Pension Plan (CPP) retirement benefits from one-quarter of pensionable earnings to one-third. The changes will result in higher employer and employee contribution rates.
Between 2019 and 2023, CPP rates will rise from 4.95 per cent to 5.95 for earnings up to the yearly maximum pensionable earnings (YMPE). The YMPE for 2017 is $55,300.
Beginning in 2024, there will be a separate four per cent contribution rate for earnings between the YMPE and a new upper earnings limit. In 2024, the new upper earnings limit will be 107 per cent of the YMPE. In 2025, it will rise to 114 per cent.
Although the government must still update CPP regulations to reflect the changes, the Finance Department said Parliament passed the legislation well in advance of the implementation date to give employers and others time to adjust.
Parliament has also passed amendments to the Employment Insurance Act and Canada Labour Code (CLC). The government has not yet announced when it will implement the changes other than saying it will be later in the 2017-18 fiscal year.
Employment insurance (EI) amendments will allow recipients to choose between receiving parental benefits for up to 35 weeks at a rate of 55 per cent of their average insurable weekly earnings or for up to 61 weeks at 33 per cent, up to a maximum amount.
They will also permit EI maternity benefits to begin up to 12 weeks before a claimant’s due date instead of eight weeks and create a 15-week benefit for employees who take time off work to care for a critically ill adult family member.
For federally regulated workplaces, the CLC amendments will increase the maximum length of unpaid parental leave from 37 weeks to 63 weeks, extend the period for when a maternity leave may begin from 11 weeks before the estimated date of birth to 13 weeks, and create a 17-week unpaid leave for employees who need to provide care or support to an adult family member who is critically ill.
Employers who offer EI benefit top-up plans should review their policies to determine if they need to make changes because of the amendments, while federally regulated employers should review their collective agreements and employment contracts to prepare for the CLC changes.
Canada has also proposed CLC amendments that would affect bereavement leave, work schedules and unpaid interns, but has yet to table legislation.
Alberta
Wide-ranging changes to employment standards rules are coming into force Jan. 1. Earlier this year, Alberta passed amendments to the Employment Standards Code that will introduce unpaid leaves and make changes to a number of standards, including those affecting overtime, statutory holiday pay, vacations, and termination pay. The Labour Ministry is amending the Code’s regulations ahead of the in-force date.
Yet, the province’s Pooled Registered Pension Plans Act is still to be enacted more than four years after the legislature passed it. The NDP government, which came to power after the act received royal assent, says it has not yet decided if it will bring the law into force.
If an employer signs up for a pooled registered pension plan (PRPP), it is responsible for enrolling employees, deducting contributions from their earnings and sending them to the administrator.
British Columbia
With a change in government over the summer, payroll professionals in B.C. can expect to see changes affecting employee health-care premiums and employment standards in the coming months.
The previous Liberal government promised to reduce premium rates for the Medical Services Plan by 50 per cent for households with annual net incomes of up to $120,000 as of Jan. 1, 2018. The change would affect employers who deduct premiums at source and those who pay the premiums as an employee benefit.
The new NDP government says it will implement the proposal and work towards eliminating premiums altogether within four years.
It also promises to increase the minimum wage rate to $15 an hour by 2021 and amend the Employment Standards Act to better “reflect the changing nature of workplaces,” though a timetable has not yet been set.
New Brunswick
The province has said it is considering amendments to the Employment Standards Act that would index minimum wage rates, strengthen the rules for hiring youths, and affect who is covered under legislation. To date, it has not said when it will table amendments.
The government is also still working on implementing legislation passed in 2013 that would establish new rules for enforcing payment of debts, including using employer garnishment of employee wages. The attorney general’s office says it is finalizing regulations and other details of the new enforcement system.
Ontario
Last spring, the provincial government tabled a bill that would amend much of the Employment Standards Act, 2000, including minimum wage, scheduling and call-in pay, vacations, statutory holiday pay, and unpaid leaves, with some of the changes taking effect Jan. 1, 2018.
Over the summer, a legislative committee held hearings on the bill and suggested amendments to it. The amendments included adding a new unpaid leave for domestic or sexual violence. It would consist of two components, a 10-day leave and a 15-week leave. The committee also passed amendments that would extend the length of parental leave in line with EI amendments, increase the amount of time employees may take off if they suffer a miscarriage or stillbirth, reinsert substitute holiday provisions, and add record-keeping requirements. The committee voted down a motion to conduct economic analyses of the bill. Ontario will vote on the amended bill this fall.
Quebec
Payroll professionals in Quebec may soon learn how the government plans to reform the Quebec Pension Plan (QPP), following public hearings earlier this year. The province is deciding whether to adopt measures that the federal government is taking to enhance the CPP, implement more modest QPP-specific proposals, or leave the plan as is.
The government is continuing to phase-in legislation requiring employers to sign up for a voluntary retirement savings plan (VRSP). VRSPs are similar to PRPPs, but will be mandatory for all employers in Quebec except those with fewer than five employees. While obligatory for employers, VRSPs are optional for employees.
Employers with 20 or more eligible employees had to sign up for a plan by the end of last year, while those with 10 to 19 eligible employees as of June 30 this year have until Dec. 31 to register. The government has not yet announced when employers with five to nine employees will have to comply.
