Staying up to date with legislative and regulatory changes can be a challenge for payroll professionals.
With legislatures in most Canadian jurisdictions set to resume in the coming weeks, there will likely be legislative and regulatory changes ahead.
Here is an update on the status of some payroll-related proposals from across Canada:
There are a number of changes coming. Parliament has already passed amendments to the Canada Pension Plan (CPP) that will see employer and employee contribution rates rise over seven years, beginning in 2019. In 2024, the government will add a separate CPP contribution rate and upper earnings limit for higher income earners.
Beyond CPP, the government has proposed changes that will affect employment insurance (EI). In this year’s budget, it proposed a new “use-it-or-lose-it” EI benefit for parents who agree to share parental leave, beginning in June 2019. The government has not yet tabled legislation to implement it, however.
It would provide up to five extra weeks of benefits if parents share EI’s 35-week parental benefits and up to eight additional weeks for those sharing EI’s 61-week parental benefits. EI pays parental benefits for up to 35 weeks over 12 months at 55 per cent of insurable earnings (to a maximum amount) or for up to 61 weeks over 18 months at 33 per cent.
The government has also proposed a number of labour standards changes that will affect federally regulated workplaces.
Last December, Parliament passed amendments to the Canada Labour Code that, once in effect, will allow employees to take time off in lieu of overtime pay, require advance notice for shift changes, and give employees the right to request flexible work schedules.
The amendments will also provide for three days of family responsibility leave, 10 days for family violence leave, and five days of leave for traditional Aboriginal practices (for example, hunting, fishing, harvesting). In this year’s budget, the government announced plans to make five of the 10 days for family violence leave paid days. It has not yet announced when it will implement the changes.
The government is also considering changes to the rules for employee repayments of employer overpayments that occur because of a clerical or administrative error.
Currently, employees must pay back the gross amount to their employer and recover excess source deduction withholdings from the Canada Revenue Agency.
The government is considering allowing employees to repay the amount net of withholdings. It said any rule changes would apply as of 2018.
This fall, the government is expected to table legislation to implement an Employer Health Tax (EHT). It would apply to employers with annual provincial payrolls exceeding $500,000. The tax, which is expected to take effect Jan. 1, 2019, will help replace revenue lost when the government eliminates Medical Services Plan premiums in 2020.
The government is also considering employment standards changes. It has not announced any specific amendments yet, but last year, officials said the government would review the Employment Standards Act to ensure that it keeps up with changes in the work environment.
With a new Progressive Conservative government in office, there may be changes to payroll-related laws and regulations. During the spring election campaign, the party promised to reduce personal income taxes by 20 per cent for the second income-tax bracket.
Premier Doug Ford has also said he would like to replace a planned $15-an-hour minimum wage hike with a tax credit. The minimum wage is scheduled to rise to $15 on Jan. 1, 2019.
Also on Jan. 1, employment standards amendments affecting flexible work schedules, pay for on-call employees, and notice for shift changes are expected to come into force. The new government has not yet announced whether it will implement the changes, passed when the previous government was in office.
Employers may also see changes to public holiday pay rules in the next year. The Labour Ministry is reviewing the requirements after complaints about new rules implemented earlier this year.
Payroll professionals in Quebec need to prepare for new labour standards rules.
In the spring, the National Assembly passed legislation that will change a number of requirements on Jan. 1, 2019. One of the changes will mean that employees will get three weeks of paid vacation after three years of employment instead of five years.
Another change will require employers to pay employees with at least three months of service for the first two days they take off each year for certain leaves, including the 10 days of leave for family obligations and the 26-week leave for sickness, organ/tissue donation for transplant, accidents, criminal offences, and domestic/sexual violence.
The province’s legislature is also considering a bill that would increase the length of maternity leave, extend the period for paying Quebec Parental Insurance Plan benefits, and allow parents to share the benefits.
With a provincial election scheduled for Oct. 1, these amendments may not pass before voters go to the polls.
Depending on the election results, there may be other legislative changes ahead.
The province’s legislature recently passed amendments to the Labour Standards Code that, once in effect, will allow employees with at least three months of service to take a job-protected leave if they or their child suffer domestic violence.
The period of leave will include up to 16 continuous weeks and 10 intermittent or continuous days. The amendments do not oblige employers to pay employees for the time off, but the government said it might change that in the future. No timetable has yet been set for implementation.
Domestic violence leave will also be required in New Brunswick. The government is expected to enact employment standards amendments allowing workers to take time off for domestic, intimate partner, or sexual violence.
Draft regulations propose a leave of up to 16 continuous weeks and up to 10 days, taken intermittently or continuously. Employers would have to pay staff for the first five days of the leave.
The government has still not announced a date for enacting legislation passed five years ago to establish new rules for repaying debts, including allowing employees’ wages to be garnished. New Brunswick is the only province in Canada that fully exempts employees’ wages from garnishment, with the exception of wage garnishment to enforce family support orders.
The government was expected to bring the changes into force in 2017 or 2018, but put it on hold last December.
A provincial election will take place on Sept. 24.
Prince Edward Island
P.E.I. is another jurisdiction that will be implementing leave for employees who need to take time off work because of domestic, intimate partner or sexual violence.
The province’s legislature recently passed amendments to the Employment Standards Act that will provide a leave of up to three paid days, followed by up to seven unpaid days off each calendar year for employees who have at least three continuous months of service with their employer.
In July, the government posted draft regulations governing the leave and gave provincial residents until Aug. 27 to provide feedback.
Once it finalizes the regulations, the government will announce when it will enact the new requirements.
The passage of the bill was somewhat uncommon in Canadian legislatures in that it was a private member’s bill rather than a government bill. Private members’ bills rarely become law.
By keeping up to date on amendments and proposals, payroll professionals can prepare in advance for possible policy and/or system changes.
They can also help to ensure that their employer complies with the payroll-related acts and regulations in the jurisdictions where they employ workers.
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