Carswell Payroll Source Alert – April 2018 Issue

Second Quarter Prescribed Interest Rates Set

The prescribed rate for taxable benefits to employees and shareholders from interest-free and low-interest loans is 2% from April 1, 2018 to June 30, 2018. The rate is one percent higher than it was in the previous quarter. The interest rate for unpaid source deductions, overdue taxes and insufficient instalments is 6% for the second quarter.

Reminder: Victoria Day is a Statutory Holiday in Most Jurisdictions

Just a reminder... Monday, May 21, 2018 is a statutory holiday under employment/labour standards law in the following Canadian jurisdictions: Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Ontario, Quebec, Saskatchewan, Yukon, and under the Canada Labour Code for federally regulated employers and employees. In New Brunswick, the day is a holiday under the Days of Rest Act. In most jurisdictions, the holiday is called Victoria Day. In Quebec, it is called National Patriots’ Day. For information on how to compensate employees for statutory holidays, please refer to the applicable jurisdiction in chapter 19, Statutory Holidays.

Reminder: British Columbia Minimum Wage Going Up June 1st

Just a reminder...Effective June 1, 2018, the provincial government will raise the general minimum wage rate from $11.35 an hour to $12.65.

The increase is part of the government’s plan to gradually raise B.C.’s minimum wage to $15.20 over the next three years. The rate will rise to $13.85 on June 1, 2019, $14.60 on June 1, 2020, and $15.20 on June 1, 2021.

At the time of writing, the government had not announced adjustments to other minimum wage rates, including the liquor server rate.

We will continue to follow this story and will report on further developments in upcoming release.

We will update Table 17.1, Minimum Wages, to incorporate the minimum wage increase in an upcoming release.

Manitoba Minimum Wage Rising in October

The province’s minimum wage rate will rise from $11.15 an hour to $11.35, Manitoba Growth, Enterprise and Trade Minister Blaine Pedersen recently announced.

The increase is based on Manitoba’s 2017 inflation rate of 1.6% and rounding up to the nearest five cents. Manitoba legislature has passed legislation that requires the government to adjust the minimum wage rate on October 1 each year to reflect changes in the province’s consumer price index.

We have updated Table 17.1, Minimum Wages, to include information on the coming rate change.

Reminder: Minimum Wage Rates Rising on April 1st

Just a reminder… Minimum wage rates went up in a number of Canadian jurisdictions on April 1, 2018:

New Brunswick - $11.25/hour

Newfoundland and Labrador - $11.15/hour

Northwest Territories - $13.46/hour

Nova Scotia —experienced workers - $11.00/hour

                     —inexperienced workers - $10.50/hour

Prince Edward Island - $11.55/hour

Yukon - $11.51/hour

New Ontario Equal Pay for Equal Work Standards in Force

Effective April 1, 2018, employers in Ontario have to pay casual, part-time, temporary, and seasonal workers at least the same rate of pay as their full-time/permanent employees if they do substantially the same kind of work in the same workplace under similar working conditions and their job requires substantially the same skill, effort, and responsibility.

The new requirements stem from amendments to the Employment Standards Act, 2000, passed late last year. Under the new rules, exceptions apply where an employer pays employees differently because of a seniority system, a merit system, a system that measures earnings by quantity or quality of production or any other factor except for sex or employment status.

Casual, part-time, temporary, and seasonal workers who believe their employer is not complying with the requirements have the right to ask their employer to review their wage rate. In response, employers must change the employee’s pay rate or reply in writing as to why they disagree with the employee’s belief. The right to make a request a review also applies to employees who believe they are paid less because of their sex. Employers are prohibited from reducing an employee’s pay rate in order to comply with the rules.

Effective April 1, 2018, the Act also prohibits temporary help agencies from paying assignment employees working for a client at a pay rate less than the rate paid to the client’s employees who do substantially the same kind of work in the same workplace under similar working conditions and their job requires substantially the same skill, effort, and responsibility. Exceptions apply where the rate difference is based on any factor other than sex, employment status, or assignment employee status.

Assignment employees who believe a temporary help agency is not complying with the requirement have the right to ask the agency to review their pay rate. The agency must change the employee’s pay rate so that it complies with the rules or provide the employee with a written explanation as to why the pay difference is justified. Clients of a temporary help agency are prohibited from reducing an employee’s pay rate to enable the agency to comply with the pay requirements.

Reminder: Quebec Minimum Wage Going Up May 1st

Just a reminder…Effective May 1, 2018, the provincial government will raise the province’s general minimum wage rate from $11.25 an hour to $12.00.

Other minimum wage rates will also go up on May 1, 2018 to the following amounts:

Employees who receive tips: from $9.45/hour to $9.80/hour

Raspberry pickers: from $3.33/kilogram to $3.56/kilogram

Strawberry pickers: from $0.89/kilogram to $0.95/kilogram

Also effective May 1, 2018, the government revoked regulations that created a specific minimum wage rate for certain sectors of the clothing industry.

We have updated Table 17.1, Minimum Wages, to incorporate the rate changes.

Payroll Q & A

Question: When calculating vacation pay for salaried employees, are employers allowed to pay the employees their regular pay period earnings for the vacation period?

Answer: Employers must be careful about doing this. Employment/labour standards legislation in all Canadian jurisdictions requires employers to pay employees a specified percentage of their earnings for vacation pay (generally 4% or 6%, depending on their length of employment). The earnings included when calculating vacation pay may or may not be the same as the employees’ regular weekly pay since vacationable earnings may include payments such as: call-in pay, overtime pay, commissions, shift premiums and statutory holiday pay, among other payments. As a result, the amount of vacation pay owing to an employee may be higher than the employee’s regular weekly wages. The types of payments that must be included when calculating vacation pay vary from jurisdiction to jurisdiction. For a listing of earnings in each jurisdiction that are included and excluded from vacation pay, please refer to Exhibit 21.1, Vacationable Earnings.