Statutory holiday pay for new employees; whether employee permission is required to garnish wages; underpaying CRA; and defining ‘fair market value’
Question: All of our employees are on probation for the first three months they are employed with us. Do we have to pay them for statutory holidays that fall during the probation period if we give them the day off?
Answer: Employees who meet the eligibility requirements for a paid statutory holiday under the applicable employment/labour standards law must be paid for the day whether or not they are on probation. (Note: These requirements apply to employees covered by provincial and territorial employment and labour standards laws.)
In most jurisdictions, eligibility is based on the employee having worked for the employer for a specified period of time and having earned wages for a minimum number of days. In order to be paid for a day off on a statutory holiday, employees must meet the following requirements:
Canada Labour Code: Employed with the employer for at least 30 days, and
must have earned wages for a minimum of 15 of the 30 calendar days right before the holiday. If the employee is working under a modified work schedule, the employee must work the minimum number of days set out in the agreed work schedule.
Alberta: Employed with the employer for at least 30 working days during the 12 months prior to the holiday. Must not be absent the day right before or right after the holiday, without the employer’s agreement.
British Columbia: Employed by their employer for at least 30 calendar days before the holiday and have worked or have earned wages on at least 15 of the 30 calendar days before the holiday or worked under an averaging hours agreement at any time during that 30-day period.
Manitoba: Must not be absent without the employer’s consent on the first scheduled working day before or after the holiday.
New Brunswick: Employed by the employer for at least 90 days in the 12 months right before the holiday.
Must work on their regularly scheduled work day right before or after the holiday, unless they have reasonable cause for not doing so. Is not employed under an arrangement where he may elect to work or not when requested to do so.
Newfoundland: Employed by their employer for a minimum of 30 days. Must work on the regularly scheduled work day immediately before and/or after the holiday, unless they have the employer’s consent to be away or have “just cause” for the absence.
Northwest Territories: Employed by the employer for at least 30 days in the 12 previous months. Must not be absent from work on their regularly scheduled work day immediately before or after the holiday without the employer’s agreement.
Nova Scotia: Must have received (or be entitled to receive) pay for at least 15 of the 30 calendar days immediately before the holiday. Must work on their regular working day right before and after the holiday unless they have the employer’s consent to be absent.
Nunavut: Employed by their employer for at least 30 days in the 12 months before the holiday. Must work on their regularly scheduled work day right before or after the holiday, unless they have their employer’s consent to be absent.
Ontario: Must work their last regularly scheduled day of work before the statutory holiday or all of their first regularly scheduled day of work after the statutory holiday, unless they have reasonable cause for not doing so.
Prince Edward Island: Employed by their employer for at least 30 days before the holiday. Received pay for a minimum of 15 days in the 30 calendar days right before the holiday. Worked their regularly scheduled working day before and after the holiday, unless they had their employer’s consent to be absent. Must not be employed under an arrangement where they may elect to work or not when requested to do so.
Quebec: Must work on their last scheduled working day before the holiday or their first scheduled working day after the holiday.
Saskatchewan: No minimum employment period required.
Yukon: Employed by their employer for at least 30 days.Must work on their last regular working day before or the first scheduled working day after the holiday, unless they have their employer’s consent to be absent or the absence is allowed under the act.
If an employee has already been absent for 14 consecutive days immediately before the holiday on a leave of absence without pay that the employee requested, the employee is not eligible to be paid for the day off.
For information on exceptions to these requirements and for paying employees who work on a statutory holiday, please see the applicable jurisdiction in Chapter 19, Statutory Holidays.
Employee permission to garnish wages
Question: I have received a garnishee notice for an employee for family support owing. Do I need the employee’s written permission before I deduct the required amount from his wages?
Answer: No, employers do not need employees’ permission to deduct amounts for statutory deductions (such as CPP, EI and income tax) or for court orders to garnishee an employee’s wages.
Underpaying CRA remittances
Question: We accidentally remitted a lower amount for payroll deductions to the Canada Revenue Agency (CRA) than required. How do we fix this? Do we send in the extra amount with our next remittance?
Answer: The CRA advises employers to send it any shortfall as soon as possible to avoid penalties. You can make the remittance using the agency’s My Payment option (if you are registered for it) or by sending in another remittance form or a letter providing your account number and the pay period to which the payment applies. Do not wait until the next remittance as the CRA may apply a late remitting penalty.
Defining ‘fair market value’
Question: In calculating the value of taxable benefits, what does the term “fair market value” actually mean and who determines it?
Answer: Fair market value is used to determine the value of taxable benefits an employer provides to its employees. According to the CRA, the term “fair market value” is the price a willing buyer would pay to a willing seller for similar products or services. The CRA states this definition means that an actual market value for the benefit is not required. Instead, the value is based on a hypothetical market. It is the employer who determines the fair market value, so the employer has to estimate the value of the benefit using the price that a willing seller and a willing buyer would agree upon for a similar benefit.
Annie Chong is manager of the payroll consulting group at Carswell, a Thomson Reuters business, which publishes the Canadian Payroll Manual and operates the Carswell Payroll Hotline. She can be reached at [email protected] or (416) 298-5085.
