P.E.I. overhauls employment standards

Paid vacation, sick pay, overtime see changes

After standing pat for 15 years, Prince Edward Island has revamped its employment standards with significant alterations to paid vacation, bereavement leave, sick pay and the banking of overtime.

In making the changes, the government looked at regulations in other provinces and then tailored its legislation to the Maritime region, said Roy Doucette, director of labour and industrial relations at the Department of Community Services, Seniors and Labour in Charlottetown. Not surprisingly, employers advocated for the status quo while labour groups felt the proposed changes were baby steps.

“As a balance of that, we took what they were telling us in the business community, as well as what the (P.E.I.) Federation of Labour was telling us, and we struck what we thought was a balance,” he said.

But when the economy is still rough, the last thing the government should do is make it more expensive to employ people, said Erin McGrath-Gaudet, senior policy analyst at the P.E.I chapter of the Canadian Federation of Independent Business (CFIB) in Charlottetown. There are costs associated with these types of changes, she said, particularly when they are accompanied by pretty aggressive increases to minimum wages (P.E.I.’s minimum wage went up twice in 2010 to $9 an hour), higher taxes, statutory holidays introduced in the last few years, “pretty hefty” employment insurance increases next year and potential raises to Canada Pension Plan contributions.

“While individually some of these changes might not seem like a huge deal, at the end of the day, the cumulative impact of all these changes, particularly at a time when the economy is soft, isn’t great,” said McGrath-Gaudet. “The former act was very administratively simple, people understood it and generally in the business community there was a sense it was fair.”

But the new standards only involve modest adjustments and workers in the province have some of the lowest employment standards in the country, said Marie Burge, a staff person at the development education centre Cooper Institute in Charlottetown and member of the PEI Working Group for a Livable Income.

“Even with the changes that are a little better than the past, there isn’t really good protection” for the 62,000 workers covered by act, she said.

Biggest changes

The three areas that will have the greatest financial impact on the employer community are paid vacation, bereavement leave and sick days, said Doucette.

Employees are now allowed three weeks’ paid vacation (previously it was two weeks) after eight years of continuous employment, with vacation pay calculated as six per cent of a worker’s gross income. An employee who works for an employer for 12 continuous months, but works less than 90 per cent of the normal working hours, can request vacation pay only instead of time off.

Three weeks has become fairly standard across the country but, for some businesses, it is a tough change, both from the money side and because it means a smaller workforce and keeping track of entitlements, said McGrath-Gaudet.

“When you add another layer of complexity to these types of standards and regulations, it creates headaches and it creates more work for the business owner,” she said.

However, pay in lieu of vacation for part-time workers is appreciated by CFIB members, said McGrath-Gaudet.

“A lot of part-time workers don’t necessarily feel the need to take extra time out of the workplace,” she said. “It’s one of those small tweaks that has certainly been greeted well by our members.”

Employees who have more than five years’ continuous service with the same employer are now entitled to one day of paid sick leave and up to two days of unpaid sick leave each calendar year.

It’s the first time a paid sick day has been legislated anywhere in Canada, said McGrath-Gaudet, and it could take some time to see if issues arise with the change. Most members informally give paid time off if people are sick but, when it’s legislated, “you have to make sure your records are recording all these things, making sure you’re covering yourself according to the standards,” she said.

The change to sick leave is appreciated but “not wildly wonderful,” said Burge, as a lot of people don’t have five years’ continuous service with the same employer.

The new regulations also state an employee can choose to accumulate or bank overtime hours to be taken later as paid time off if he requests such compensation in writing and the employer agrees. The paid time off must be taken within three months of the workweek in which the overtime was earned and it is the employer’s responsibility to keep records of any overtime accumulated and used up by employees.

The time frame element was included because the government did not want employees who were owed several months of overtime finding themselves unpaid if a company went bankrupt, said Doucette.

Formalizing the banking of overtime hours was a welcome change, said McGrath-Gaudet. Certain industries in P.E.I. are seasonal and require people to work above and beyond the standard workweek.

“So having that flexibility and having it now formalized in legislation is certainly something that is welcome in a lot of businesses here, so those businesses are protected and employees are protected,” she said.

Some of the restrictions are understandable, said Burge. However, there are unwelcome exceptions for certain industries, such as agriculture and outside fish plant workers who can work up to 75 hours per week without receiving overtime.

Also new is court leave, which was not there before, said Doucette. An unpaid leave of absence is granted to an employee who serves on a jury or attends as a witness at a hearing, application or proceeding.

The new standards also state employees are due one day of paid bereavement leave (previously it was without pay) and up to two additional days of unpaid bereavement leave for the death of an immediate family member (a spouse, child, parent, brother or sister). Employees are to be given up to three unpaid days of bereavement leave for the death of someone in their extended family (a grandparent, grandchild, aunt, uncle or in-law).

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