Canadian Payroll Reporter

6 Canadian HR Reporter, a Thomson Reuters business 2019 News February 2019 It makes 71 recommendations affecting direct deposit rules, wage assignments, vacation pay, statutory holiday eligibility, leaves of absence, and termina- tion rules, among other topics. "This report is the first com- prehensive review of the Em- ployment Standards Act from a neutral, independent perspec- tive in nearly a quarter of a cen- tury," said Tom Beasley, head of the BCLI committee. "Employ- ment legislation not only has to catch up with the transforma- tive changes that have occurred in the workplace in recent years, but also meet the needs of the next several decades." The report comes at a time when the government is consid- ering modernizing the ESA. "Updating B.C.'s employment standards is one of my main priorities — making sure our standards are applied evenly, en- forced and reflect the changing needs of today's workplaces," said Labour Minister Harry Bains. Among the report's recom- mendations are the following: Direct deposit: The report recommended eliminating a re- quirement for employees to con- sent to direct deposit. Despite the widespread use of direct deposit, the report said employers cannot implement it as the standard payment prac- tice in the workplace without first obtaining individual em- ployee consent or authorization under a collective agreement. "It is onerous and impractical to compel an employer to main- tain a separate manual payment system for an isolated objector when all other employees are paid by direct deposit," it said. To ensure that employers do not violate privacy or protection of information laws if employee consent is removed from the act, the report recommended that the ESA specifically authorize employers to collect, use, and disclose employees' personal in- formation on banking arrange- ments without needing their consent for direct deposit of pay. The authorization would override restrictions in the Per- sonal Information Protection Act and the Freedom of Infor- mation and Protection of Pri- vacy Act. To address employee con- cerns about employers having their banking information, the report suggested that employees could open a separate account for their employer to deposit their pay and then they could transfer the money to their regu- lar bank account. Wage assignments: The re- port recommended that the ESA allow employees to make an "ir- revocable written assignment of wages" authorizing their em- ployer to deduct amounts from their pay to repay advances their employer paid for salary, vaca- tion pay, and the like. It also recommended elimi- nating a provision that allows employers, if they so choose, to honour an employee's written wage assignment to meet a cred- it obligation. "It is generally an administra- tive inconvenience for employ- ers to administer an assignment of wages to a third party," said the report. "It can also embroil the employer in disputes with the employee's other creditors or a trustee in bankruptcy if the assigning employee is insolvent and the assignment is alleged to be a fraudulent preference." Statutory holidays: The report recommended new eli- gibility requirements for paid statutory holidays. Currently, employees must work for their employer for at least 30 calendar days before the holiday and have worked or earned wages on 15 of the 30 days. Exceptions apply for employees working under aver- aging agreements. The report proposed that em- ployees be eligible for statutory holiday pay if they work or earn wages on 16 of the 60 days before the holiday and they work on their last scheduled day before the holiday and first scheduled day after it, unless they are sick or have permission to be absent. "The first branch of the pro- posed eligibility rule would give part-time employees a longer qualifying period within which to accumulate working time equivalent to about two days per week," the report said. "The second branch is in ef- fect in more than half of the provinces and territories. It prevents employees from abus- ing the statutory holiday entitle- ments by claiming holiday pay to cover a loss of pay for a day on which the employee deliberately does not report for work." Vacation pay: The report recommended changing the re- quirements for vacation pay. Currently, employers must pay it in a lump sum at least seven days before an employee's vacation begins, or, with the employee's written consent or union agreement, they may pay it on scheduled paydays. In reality, most employers continue paying salaried work- ers their regular pay during their vacation, according to the report. "The employment standards branch tolerates this practice, as long as the salary paid during a vacation amounts to at least four per cent (or if applicable, six per cent) of the previous year's total wages," it said. "While this may ensure the employee receives the amount of vacation pay owing, it is arguably a technical violation of section 58(2)." The report also noted that the reference to "scheduled paydays" is ambiguous, possibly referring to each payday or only to those that occur during an employee's vacation. "It seems to make sense to regularize what is the usual and accepted practice concerning payment of vacation pay, and to remove ambiguity." It recommended that the act give employers three options for paying vacation pay: paying the employee's salary during the vacation, adding vacation pay to each pay (with later adjustments if needed to ensure the correct amount is paid), and paying it in a lump sum one week before the vacation begins. On the issue of vacation en- titlement, the committee was divided. While the majority recom- mended no changes (for exam- ple, keeping entitlement at two weeks' vacation after one year and three weeks after five years), a minority suggested four weeks' vacation after 10 years. Leaves: The report did not recommend widespread chang- es to the leaves of absence al- lowed under the act. A major- ity of committee members did recommend replacing the ESA's five-day family responsibility leave with a seven-day leave for personal illness or family re- sponsibilities. The report did not recom- mend adding other leaves that are becoming more common in other jurisdictions, such as those for critical illnesses, domestic violence, organ donation, and citizenship ceremony. It said that while these leaves relate to important life events, they likely would not be appli- cable to most employees. "The project committee is disinclined to recommend add- ing new leave entitlements to the ESA that will increase the complexity of the act and po- tentially impose significant burdens on small businesses, without being of benefit to the greater part of the workforce," said the report. Termination: The report rec- ommended that the ESA include provisions to address situations where an employee who gives notice to quit is then terminated by the employer before the end of the employee's notice period. It suggested that in this situa- tion, employers pay employees the lesser of the amount of wages they would have earned during the remainder of their notice pe- riod and the amount that would be owing for length of service if the employer had terminated them without notice. The report also recom- mended changes to the group termination provisions to allow employers to meet the notice requirements by providing em- ployees with a combination of notice and termination pay. The report provides govern- ment with a range of perspec- tives on what is needed to ensure our labour legislation supports a growing economy, said Bains. Independent review of act first in nearly 25 years from B.C. on page 1 News "Employment legislation needs to catch up with transformative changes that have occurred."

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