Employment standards requirements apply as soon as a business or nonprofit hires its first employee. In this employment standards primer, we review these fundamental employee entitlements – focusing on the top 10 requirements that every employer should know.
What are Employment Standards?
The federal government and every province in Canada have their own employment standards legislation. Employment standards are the basic entitlements that an employer must provide to each employee – every day. Among other things, employment standards:
- limit the number of hours employees can work;
- ensure employees get time off for vacation, statutory holidays and family obligations; and
- establish rules related to records, wages and employee communications.
Non-compliance with these standards may result in fines and penalties and, in certain circumstances, director liability and class actions.
1. Hours of Work
Typically, employers cannot require their employees to work more than a maximum number of hours each day and week. The overtime threshold – i.e., when an employer must pay at least 1.5 times the employee’s regular rate – tends to kick in before the maximum is reached. (To avoid 3 costly traps associated with overtime, see our Guide to Overtime.)
Employees are entitled to a minimum amount of breaks during work, and time away from work each day or week.
In addition, some provinces require employers to provide a minimum amount of notice of scheduling changes or require employers to pay eligible employees who report to work for a minimum number of hours.
Depending on the jurisdiction, there are several types of exceptions or alternatives, which may apply to these daily/weekly maximums and minimums, including:
- workplace emergencies;
- special rules or exemptions for certain occupations or industries;
- averaging, overtime and excess hour agreements.
2. Leaves of Absence
Employers must provide eligible employees with a range of leaves of absence (around 12-14 leaves, depending on the jurisdiction). When an employee requests a leave of absence, employers should consider:
- the applicable leave of absence;
- whether the employee is eligible for the leave;
- the scope of the leave (e.g., who qualifies as a family member);
- whether the leave is paid or unpaid; and
- rights during and after a leave of absence.
While most leaves of absence tend to be unpaid, we have recently seen more Canadian government requiring employers to pay employees for sick days. For example, federally-regulated employees will soon be entitled to up to 10 days of sick leave each year.
For a review of these leave of absence issues, see our Guide to Leaves of Absence.
3. Statutory Holidays
Every jurisdiction in Canada has established a list of statutory (or public) holidays. While holidays vary somewhat from one province to the next, typical Canadian holidays include New Year’s Day, Third Monday in February, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day, and Boxing Day.
Generally, eligible employees are entitled to a day off with pay (calculated per requirements in the applicable legislation). However, specific entitlements may depend on whether or not:
- the holiday falls on a regular working day;
- the employee is on a leave of absence or temporary layoff;
- the employee agrees to work on the public holiday;
- the employee is part of an industry or occupational group subject to a special rule or exemption.
There are three main things to think about when it comes to vacation:
- Is the employee entitled to vacation? Vacation entitlement is based on years of service. Typically, employees are entitled to a minimum amount of vacation after their first year of employment.
- When must the vacation be taken? While employers usually determine when an employee can take vacation, they must provide a certain amount of notice to the employee. In addition, employees are entitled to take their vacation within a specified amount of time (e.g., 4-12 months, depending on the jurisdiction) of earning it.
- How much vacation pay is owed to the employee? Generally, vacation pay ranges from 4-6% of the employee’s wages, depending on the employee’s years of service.
5. Equal Pay
Some provinces, like Ontario, prohibit employers from paying one employee less than another on the basis of sex when they:
- perform substantially the same kind of work;
- requiring substantially the same skill; and
- the work is performed under similar working conditions.
However, distinctions may be made on the basis of seniority, merit, quantity/quality of production or any factor other than sex.
Note: The federal government, Ontario and Quebec have moved beyond these equal pay provisions, requiring private sector employers to implement pay equity regimes.
6. Wages & Payments
Most employers are aware that they must pay their employees at least the minimum wage of the jurisdiction where their employees work. However, there are other wage and pay-related requirements to consider, including:
- there must be a set pay period, and in most provinces there is a limit on how long that pay period can be;
- employers must provide a written statement of earnings with specified information;
- most provinces specify what can be deducted from employee wages.
Note: Unpaid wages are a critical problem for which directors can be personally liable. For further details, see Director Liability for Employment Standards Non-Compliance.
All employers must retain a wide array of employment-related records. Typically, under employment standards legislation, employers must keep records related to:
- general employee information (e.g., employee’s contact information, start date);
- hours of work;
- leaves of absence;
8. Employee Communications
Every employer in Canada must post certain information in their workplace and/or provide it directly to their employees. These rules are different in each jurisdiction in Canada. For example, see Ontario Employment Information Checklist – 2 Key Processes for a review of the requirements in Ontario.
9. Termination of Employment
Employment standards legislation sets out minimum standards that all employers must meet when terminating employees’ employment. However, it is important to remember that there are other sources of law (including prior court decisions) that are applicable when an employee is terminated. Thus, an employer may be required to provide more notice and termination pay than the minimums set out in the legislation.
Typically, these minimum standards include requirements related to:
- individual notice, termination pay and other pay (e.g., vacation pay) due on termination;
- requirements during the notice period (e.g., some jurisdictions prohibit employers from changing an employee’s wage rate during this period);
- group terminations (i.e., dismissing a group of people in a specified period of time).
The federal government and every province have established a minimum age for workers. Some jurisdictions have varying minimum age requirements and work restrictions depending upon the industry or the type of work involved.
Note: While Ontario’s employment standards legislation does not include a minimum age, Ontario does have minimum age requirements in other legislation.
How Compliance Works Helps HR Professionals
Compliance with constantly changing employment laws and ongoing changes can be challenging and time consuming. Compliance Works helps by providing plain language summaries of eight areas of law, including employment standards.