This article is for educational purposes and does not constitute legal, employment, or tax advice. For specific advice applicable to your business, please contact a professional.
Following the challenges imposed by COVID-19, small-business owners have more on their plates than ever before. When you add having employees into the mix, there’s even more to learn. As an employer, you must ensure that your workplace policies and practices adhere with certain rules and regulations within Canada’s British Columbia province. This guide covers the ins and outs of B.C.’s Employment Standards Act (ESA).
Bill 8—or the Employment Standards Amendment Act—became law on May 30, 2019, which changed many of the previous stipulations (with the exception of some rules, which Bill 8 will apply to in the future).
Table of contents
- What is the B.C. Employment Standards Act?
- A Closer Look at Employment Standards in British Columbia
- Health and Safety and the Employment Standards Act
- The Rules for Terminating Contracts
- What Recent Changes to the Employment Standards Act Mean for a Small Business
What is the BC Employment Standards Act?
The B.C. Employment Standards Act (ESA) defines the roles and responsibilities of (and between) business owners, employers, and employees. It highlights aspects of business ownership and employment regarding basic human rights, the prohibition of discrimination and harassment and equal pay for equal work irrespective of gender. The ESA also covers standards of employment such as:
- Minimum employment
- Safety
- Bullying or harassment
- Termination
- Record keeping
A Closer Look at Employment Standards in British Columbia
British Columbia has set minimum standards regarding wages and workplace conditions, including:
- Work hours
- Time off
- Termination notice
- Severance payment
These all have rules and regulations that a business owner or employer must uphold. Certain industries have rules that apply only to them. For instance, the rules of the ESA don’t quite align with some of the services offered by technology and agriculture businesses or by taxi operators. The same holds true when it comes to certain types of labourers, such as children or farm employees. Minimum work hours, for instance, don’t make sense in these cases for reasons such as:
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The work is usually only seasonal—a farmer cannot promise work tending a field during the winter months.
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The work must be within certain hours—children cannot work during the hours they are to be in school.
If you’re unsure of how the ESA may apply to you as an employer, your business or your employees, you can find detailed information for your industry on the province’s website.
Health and Safety and the Employment Standards Act
Employees in British Columbia are guaranteed the right to safety and health wherever they choose to work. There are minimum standards set by the ESA and WorkSafeBC that outline the health and workplace safety requirements for your workplace. Owners and employers are required to register with WorkSafeBC. When you provide your information to WorkSafeBC, you’ll also begin contributing to the B.C. system for workers compensation. This fund provides income to employees who have been injured while working and are therefore unable to work, as well as to caregivers for serious injuries.
Workplace health and safety has been further pressurised by pandemic restrictions and measures, so it’s important that employers are aware of rules. The WorkSafeBC website has a wealth of COVID-19 information and resources to help.
Along the lines of health and safety, having the opportunity to work in a company free of all types of harassment or bullying is the law. Just as you are to ensure there are no physical hazards within your place of business, you must also safeguard employees. This includes making sure they have an emotionally safe place to perform their duties. There are plenty of resources to assist with preventive measures and inform your employees that bullying and harassment won’t be tolerated.
Keeping on top of health, safety and wellbeing for your employees also involves effective management. You and your team can use software such as Square’s Team Management tool for simple onboarding and to seamlessly keep track of hours via the POS system.
The Rules for Terminating Contracts
It’s not easy to tell an employee that their services are no longer needed, no matter the reason but unfortunately, it’s still a necessary part of business. If you must relieve an employee of their duties, there are rules that apply. As hard as it is for you to communicate, it is even harder for an employee to hear that they no longer have employment. Therefore, it’s best to prepare yourself and your employee in advance. Some of the preparatory steps you should take are:
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Calculate the amount of your employee’s severance pay.
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Arrange the easiest way the employee can obtain the severance.
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Prepare and maintain your employee’s record of employment, or ROE, if the employee is eligible for employment insurance. They’ll need their ROE when they file their claim.
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Provide all contact information the employee would need if you offered certain benefits, such as medical insurance, because they will now be responsible for premiums.
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Write a reference letter for the employee to use as they start to search for new employment.
According to the ESA, you must give your employee notice when terminating their employment. If you don’t provide this notice, your employee is entitled to a certain amount of severance pay in lieu of the notice. Even with notice, your employee may still be entitled to a severance as laid out under common law—this is different from termination severance as set for by the ESA.
Either you or your employee must contact a lawyer to calculate the amount of severance due—it can be based on a variety of factors, such as seniority with the company, employee age, benefits and the current market for the employee’s specific industry. A general rule is that severance pay is calculated based on the number of years with your company.
In other words:
- If an employee has been with you for five years and normally makes $500 every week, the employee has gross earnings of $2,000 a month.
- An employee can be owed anything from one week up to four weeks’ worth of wages per year they’ve worked for your business.
- If the lawyer concludes the employee is due two weeks’ worth of pay per year of employment (up to a max payment of 26 weeks), that employee would be entitled to severance pay of up to $26,000 ($500/week x 2 weeks = $1,000 x 26 weeks).
- This severance pay, in most situations, must be paid within seven days.
If the employee is not terminated but resigns (and you must get this in writing), they are not due additional severance.
Under the prior rules of the ESA, employers were required to maintain employee records for two years from the date of termination. As of May 2019, record-keeping retention increased to four years from that date. Records that must be kept include:
- Payroll
- Agreements regarding averaging, workplace-necessary clothing and holidays
What Recent Changes to the Employment Standards Act Mean for a Small Business
Learning the rules that apply to employment can be strenuous, but well worth the effort. Maintaining compliance with employment regulations not only keeps you on the right side of the law, but it also makes your workplace enticing for potential employees.
Two of the biggest changes to the ESA were raising the minimum work age and updating wage recovery. As of May 2019, the minimum age to gain employment was raised to 16.
Under the previous version of the ESA, this age was 12. Children aged 14 and 15 are still allowed to obtain certain types of light employment, such as grocery stocking. Children of this age and younger can also accept jobs in the entertainment industry with their parents’ consent.
Under the previous ESA, employee’s seeking recovery of unpaid wages were allowed to file for only six months’ worth. This period has been extended to one year. The unpaid wage recovery timeframe must be in reference to the year just before their employment cessation or from the date they filed their claim. Whichever is the earlier of the two dates. In some circumstances, the employee may be granted a full two years’ worth of unpaid wages.
To ensure the success of your business and the happiness of your employees, it’s vital that you adhere to the B.C. Employment Standards Act. It’s also important as an employer to find ways to manage stress.
Do you have questions about your small business? Square can help you succeed in more ways than one. If you’re managing a large number of employees, keeping track of hours worked can seem like a job in itself. With Square’s Team Management feature, your employees can clock in and out from your business’ POS system. It’s never been easier to succeed while managing an efficient, welcoming workplace with Square.