How do we treat standby for EI purposes?

The hours are not insurable: expert
By Annie Chong
|Canadian Payroll Reporter|Last Updated: 04/03/2012

Question: We require some of our employees to be on standby in case we need to call them to work. The employees do not have to wait at the workplace, but they have to carry a cellphone with them so we can reach them if needed. We pay the employees a portion of their regular hourly rate for the standby hours (it is above minimum wage). How do we treat this standby time for EI purposes?

Answer: The hours are not insurable. The hours an employee is on standby somewhere other than at the workplace are insurable only if the employer pays the employee at least the rate that it would have paid had the employee actually worked the hours. In either situation, though, the amount paid for standby time is insurable. If the employer requires that the employee be at the workplace for the standby time, the hours are insurable regardless of the amount paid.

Earnings that make up statutory holiday pay

Question: What earnings are included when calculating statutory holiday pay for an employee who is entitled to be paid for taking the day off work on the holiday?

Answer: Statutory holiday pay requirements are governed by employment and labour standards laws in each jurisdiction:

Canada Labour Code: Employers must pay employees their regular wages for a statutory holiday. The term wages includes all payments for work performed, excluding tips and gratuities. If an employee’s wages vary, the employee is entitled to the average of his daily earnings, excluding overtime, for the 20 days he worked immediately before the holiday (or an amount calculated by a method agreed to under a collective agreement).

Alberta: Employers must pay employees their average daily wages for the day. Average daily wages refers to the employee’s daily wage averaged over the days the employee worked in the nine weeks immediately before a statutory holiday. If an employee has not been employed by the same employer for at least nine work weeks, average daily wage refers to the employee’s daily wage averaged over the number of days the employee has worked for the employer. The term wages includes salary, pay, time off in lieu of overtime pay, and commissions. It does not include overtime pay, vacation pay, statutory holiday pay, termination pay, discretionary bonuses or tips or other gratuities.

British Columbia: Statutory holiday pay is based on an employee’s average day’s pay for work done during and wages earned within the 30 calendar days before a statutory holiday. It includes regular wages, commissions, statutory holiday pay and vacation pay paid or payable for any days of vacation taken within that period. It does not include overtime pay. Employment Standards also points out that payments from benefit plans are not considered wages for statutory holiday pay.
Manitoba: Statutory holiday pay must be at least equal to the employee’s wages for working regular hours on a normal day in the pay period. If an employee’s wages vary, the amount paid for the holiday must be equal to five per cent of the employee’s total wages in the four weeks right before the holiday. Wages includes salary and commissions, but not overtime.

New Brunswick: Employers are required to pay employees their regular wages for a statutory holiday. The term wages includes salary, commissions and compensation in any form for work or services measured by time, piece or otherwise. It does not include public holiday pay, pay in lieu of public holidays, vacation pay, pay in lieu of vacation, gratuities or honoraria. If the employees’ wages vary, the employer must pay them their average daily wage, excluding overtime, for the 30 calendar days immediately before the holiday.

Newfoundland and Labrador: Employers must multiply the employee’s hourly rate by the average number of hours the employee worked in a day in the three weeks right before the holiday.

Northwest Territories: If an employee is paid on the basis of time, the amount of holiday pay must at least equal the wages the employee would have earned at his regular rate for normal hours of work. If an employee is paid on another basis, the amount of holiday pay is based on the average of his daily wages for the four weeks the employee worked immediately before the week in which the statutory holiday occurs. The term wages includes all forms of payment except tips and gratuities.

Nova Scotia: The holiday pay must be equal to or greater than the wages the employee would have earned on a normal working day. If the employee’s wages vary, Labour Standards suggests an employer could average the employee’s hours or wages over 30 days to calculate statutory holiday pay. Wages include salary, commissions, statutory holiday pay, but do not include vacation pay, pay in lieu of notice or gratuities.

Nunavut: Statutory holiday pay must be equal to or greater than the wages the employee would have earned at his regular rate for normal work hours, if the employee is paid based on time worked. If the employee is compensated on another basis, the holiday pay must be at least equal to his average daily wages for the four weeks he worked right before the week in which the holiday occurred. Wages include all types of remuneration for work done, except tips and gratuities.

Ontario: Statutory holiday pay refers to all of the regular wages an employee earned in the four work weeks before the work week in which the holiday falls, as well as all of the vacation pay payable to the employee in four work weeks before the work week in which the holiday occurs, divided by 20. Regular wages does not include overtime pay, premium pay public holiday pay, vacation pay, termination pay and severance pay.

Prince Edward Island: Employers must pay employees a regular day’s pay for the day of the holiday. If the employee’s work hours vary, the employer can average the hours or wages over 30 prior days to calculate the holiday pay.

Quebec: Statutory holiday pay (called a compensatory indemnity) is to be calculated as 1/20 of the wages the employee earned during the four complete weeks of pay before the week of the holiday, excluding overtime but including tips the employee declares, where applicable. Employees paid in whole or in part by commission must be paid 1/60 of the wages they earned in the 12 complete weeks of pay before the week of the holiday.

Saskatchewan: Employers must pay employees their regular daily wage, or where the wages vary, an amount calculated according to the formula A = W/20, where W is the total wages the employee earned in the four weeks immediately before the holiday, excluding overtime. Wages include salary and commission.

Yukon: Employers must pay employees their regular rate of wages for normal work hours, if the employees’ wages are calculated on a daily or hourly basis. If the employee’s wages are calculated other than on an hourly, daily, weekly or monthly basis, the employer must calculate holiday pay based on the employee’s average daily wage, excluding overtime or bonuses, for the week in which a general holiday occurs. If an employee works irregular hours or works less than the standard work hours, the employer must pay the employee at least 10 per cent of his wages, excluding vacation pay, for the hours worked in the two weeks immediately before the week in which the general holiday occurs. The term wages includes all remuneration owing to an employee, except for gratuities; discretionary amounts not related to hours of work, production or efficiency; damages from a wrongful dismissal action or expenses.