Changes in payroll laws and regulations from across Canada
Federal
Feds finalize CPP amendments
The federal government has finalized amendments to Canada Pension Plan (CPP) regulations that incorporate new rules for calculating contributions.
For the most part, the changes are retroactive to Jan. 1, the date amendments to CPP legislation took effect. The legislative amendments will see contribution rates gradually rise between 2019 and 2025 to fund improvements to the CPP’s retirement,
post-retirement, survivor, and disability benefits.
Between 2019 and 2023, the government is gradually raising the CPP contribution rate for employers and employees from 4.95 per cent to 5.95 per cent for earnings up to the yearly maximum pensionable earnings (YMPE). The rate consists of a base contribution of 4.95 per cent rate, plus an extra rate called the first additional contribution rate.
For 2019, the first additional contribution rate is 0.15 per cent. It will rise to 0.3 per cent in 2020, 0.5 per cent in 2021, 0.75 per cent in 2022, and one per cent in 2023 and later years.
Combined with the base contribution, the total CPP employee and employer contribution rate is 5.10 per cent in 2019. It will increase to 5.25 per cent in 2020, 5.45 per cent in 2021, 5.70 per cent in 2022, and 5.95 per cent in 2023 and later years.
Beginning in 2024, the government will implement another contribution rate of four per cent each for employers and employees with pensionable earnings between the YMPE and a new upper earnings limit.
The amended Canada Pension Plan Regulations, published in the Feb. 20 issue of the Canada Gazette Part II, now include formulas for calculating the base, first additional, and second additional contribution rates.
They also set out new rules for calculating contributions when employees move from Quebec to other parts of Canada during the year.
To account for the new rules, the Canada Revenue Agency revised its payroll deductions formulas as of Jan. 1.
New CLC compliance and enforcement rules take effect
On April 1, the federal government implemented new labour standards compliance and enforcement rules for federally regulated workplaces.
The new requirements under the Canada Labour Code (CLC) were part of Bill C-44, the Budget Implementation Act, 2017, No. 1, which received royal assent on June 22, 2017.
The following provisions, published in the Feb. 20 issue of the Canada Gazette Part II, are among the rules now in effect:
Labour Program inspectors have the power to determine wages and other amounts owed to an employee based on available evidence if an employer does not keep payroll records.
The labour minister has the power to order employers to carry out internal audits to determine whether they are complying with labour standards rules. Employers have to report their findings to the minister, including steps taken to address situations where they were not in compliance.
The period that may be covered by a payment order for unpaid wages has increased from one year to two years before the day on which a complaint was made, an employee’s employment was terminated, or an inspection was started.
Labour inspectors have the authority to issue notices of voluntary compliance if an employer voluntarily pays amounts that an inspector has found it owes to an employee without the inspector having to issue a payment order.
The Labour Program can charge administrative fees on payment orders issued to employers who fail to pay wages or other amounts to employees. The fees will be equal to either 15 per cent of the amounts listed in the payment order or $200, whichever is greater.
Employers requesting a review or an appeal of a payment order must pay an administrative fee, along with the amount shown in the payment order. Fees will be adjusted, with overpayments reimbursed to the employers, if the review or appeal changes the payment order.
With the agreement of the labour ministry, employers and corporate directors may provide security (for example: bond or irrevocable letter of credit) instead of a monetary amount when asking for a review of a payment order. Previously, they had to pay the full amount of the payment order before applying for a review.
Labour Program regional directors have the authority to issue orders to any person indebted to a director of a corporation, ordering them to pay amounts owing to an employee directly to the minister.
“Some employers will face increased financial and administrative costs and burdens as a result of the overall compliance and enforcement package (primarily due to the addition of administrative fees on payment orders),” said a government statement in the Gazette.
“However, these costs should not affect law-abiding employers. The latter should also benefit from measures that will help ensure that they are not undercut by competitors who fail to comply with the code’s requirements.”
New Brunswick
Minimum wage rising April 1
On April 1, the New Brunswick government raised the province’s minimum wage rate from $11.25 an hour to $11.50.
In 2018, the province began indexing the rate to increases in the consumer price index for New Brunswick, with wage adjustments set to occur every April 1.
“Linking the minimum wage to an economic indicator like the consumer price index will allow New Brunswick employers and employees to be better prepared for increases when they occur,” said Trevor Holder, the province’s labour minister.
Newfoundland and Labrador
Base pay rising
The Newfoundland and Labrador government raised the province’s minimum wage rate from $11.15 an hour to $11.40 on April 1.
Last year, the government began indexing the minimum wage rate to increases in the consumer price index for Canada, with wage adjustments occurring on April 1 every year.
Nova Scotia
55-cent increase now in effect
On April 1, the Nova Scotia government raised the province’s general minimum wage rate from $11 an hour to $11.55.
The rate applies to employees with at least three months of experience. The rate for employees with less than three months of experience will increase from $10.50 per hour to $11.05.
On April 1 in 2019, 2020, and 2021, the government will raise the minimum wage for experienced workers by $0.30 an hour, plus an adjustment for percentage changes in the projected annual consumer price index for the previous calendar year. The results will be rounded to the nearest $0.05.
The minimum wage rate for inexperienced workers will continue to be $0.50 less per hour than the rate for experienced workers.
Regular indexing without the additional $0.30-an-hour increase will resume on April 1, 2022.
Yukon
Minimum wage bump tops $1
On April 1, the Yukon government raised the territorial minimum wage rate from $11.51 per hour to $12.71.
The rate hike includes an increase of $0.90, plus a $0.30 adjustment for percentage changes in the annual consumer price index for Whitehorse for 2018. Last year, the Employment Standards Board recommended that the government gradually raise the rate to $15.12 by April 1, 2021.
The government did not indicate whether it would do this. Instead, it asked the board to consider a number of factors for wage hikes in 2020 and 2021, including an economic impact analysis of additional increases and a comparison to other jurisdictions.
