Canadian Payroll Reporter

5 Canadian HR Reporter, a Thomson Reuters business 2016 CPR | December 2016 ASK AN EXPERT Annie Chong MANAGER OF CARSWELL'S PAYROLL CONSULTING GROUP annie.chong@thomsonsreuters.com | (416) 298-5085 Canadian HR Reporter, a Thomson Reuters business 2016 Are ROEs issued during self-funded leaves? QUESTION: One of our employees is taking a one-year leave of absence under a salary deferral arrange- ment. Do we have to issue a Record of Employment (ROE) for the employee? ANSWER: No, employers do not have to issue ROEs for employees on a self-funded leave of absence, unless the employer or the employee breaks the agreement that al- lowed for the leave and the employee does not come back to work after the leave. If the employee will not be returning to work once the leave is over, the employer must enter in block 11 on the ROE (Last day for which paid) the date of the last day the employee worked before going on the leave. ANSWER: It depends on the type of coun- selling. Fees employers pay for employee counselling for retirement or re-employ- ment are not taxable benefits. Also ex- cluded are employer-paid counselling for an employee's (or for a person related to the employee) physical or mental health (e.g., tobacco, drug or alcohol counselling, and stress management counselling). ANSWER: The requirements for calculat- ing the amount of wages in lieu of notice to pay for employees whose wages vary will depend on the jurisdiction in which the em- ployee works, as the following table shows: Are employer-paid counselling fees a tax benefit? QUESTION: Our employer offers employees a number of counselling services for things such as financial planning, handling stress, living a healthy lifestyle and getting ready to retire. The employer pays the costs of the counselling sessions. Are these costs a taxable benefit for employees? Paying wages in lieu of notice when wages vary QUESTION: How do I calculate the amount of wages in lieu of notice to pay an employee whose wages differed from week to week? Jurisdiction Calculating Wages in Lieu of Notice When Wages Vary Canada Labour Code Pay the employee the average of the actual hours he or she worked, excluding overtime, in the four complete 1 weeks prior to termination. Alberta Pay the employee the average of the actual hours he or she worked, excluding overtime, in the four complete 1 weeks prior to termination. British Columbia Pay the employee the average of his or her wages in the eight weeks before termination. Manitoba Calculate an average weekly wage, using wages paid to the employee for the last six months. Multiply the weekly wage by the number of weeks of notice required. New Brunswick Calculate an average for the length of time the employee has been employed, up to 52 weeks. The average consists of all wages earned, including overtime. Newfoundland and Labrador The Labour Standards Act does not specify how to calculate wages in lieu of notice for employees whose wages vary; but it is the Labour Standards Board's policy to calculate the employee's average wage. To do this, add together all wages earned in the four weeks before termination and divide by four. Multiply the result by the number of weeks of notice required. Northwest Territories Calculate the employee's average hours over the 13 weeks before the termination. 2 If the employee's hours vary greatly, the Employment Standards Board says employers should add up all the hours the employee worked in that period and divide it by the number of days worked to determine the average. Nova Scotia Pay the employee his or her average weekly earnings. To calculate the average wage, the Labour Standards Board advises employers to use the employee's last 12 weeks to determine average weekly earnings. 3 Nunavut Calculate the employee's average hours over the 12 weeks before the termination. 4 Ontario Pay the employee the average of his or her regular weekly wages, excluding overtime, in the 12 weeks the employee worked immediately before the date of termination. Prince Edward Island Pay the employee the average of his or her weekly or biweekly wages, excluding overtime, for the two to four weeks immediately preced- ing the date of termination. Quebec Pay the employee the average of his or her weekly wages in the three months before the termination. Saskatchewan Pay the employee the average of his or her weekly wages, excluding overtime, over the 13 weeks before notice of layoff or termination was given or, if no notice was given, the date employment ended. Yukon The Employment Standards Act does not specify how to calculate wages in lieu of notice for an employee whose wages vary; however, the Employment Standards Board advises that employers should average an employee's earnings over a period of 52 weeks. 1 A complete week is a week in which there are no statutory holidays, the employee does not take vacation and is not absent from work for any other reason. 2 Employment Standards has given verbal assurance that the averaging period is 13 weeks. However, employers planning to use such period may want to confirm it with Employment Standards before doing so. 3 In some cases, employers may need to use more or fewer weeks to determine the average (e.g., for employees on an unpaid leave during that time or for those who have only worked for the employer for a very short time). Employers who are unsure of how many weeks to use should contact Labour Standards for advice. 4 The Labour Standards Board has given verbal assurance that the av- eraging period is 12 weeks. However, employers planning to use a 12-week averaging period may want to confirm it with Labour Standards before doing so.

• Cover