Canadian Payroll Reporter

News Published 12 times a year by Thomson Reuters Canada Ltd. Subscription rate: $179 per year Customer Service Tel: (416) 609-3800 (Toronto) (800) 387-5164 (outside Toronto) Fax: (416) 298-5106 E-mail: carswell.customerrelations @thomsonreuters.com Website: www.carswell.com One Corporate Plaza 2075 Kennedy Road Toronto, Ontario, Canada M1T 3V4 Director, Carswell Media Karen Lorimer Publisher John Hobel (on leave) Managing Editor/Acting Publisher Todd Humber Editor Sheila Brawn sbrawn@rogers.com Assistant Editor Mallory Hendry Marketing Manager Mohammad Ali mm.ali@thomsonreuters.com (416) 609-5866 Circulation Co-ordinator Keith Fulford keith.fulford@thomsonreuters.com (416) 649-9585 Payroll Reporter R adian a www.payroll-reporter.com ©2015 Thomson Reuters Canada Ltd ISBN/ISSN: 978-0-7798-2810-4 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, photocopying, recording or otherwise without the written permission of the publisher (Carswell, a Thomson Reuters business). Return Mail Registration # 1522825 | Return Postage Guaranteed Paid News Revenue Toronto Canadian Payroll Reporter is part of the Canadian HR Reporter group of publications: • Canadian HR Reporter — www.hrreporter.com • Canadian Occupational Safety magazine — www.cos-mag.com • Canadian Payroll Reporter — www.payroll-reporter.com • Canadian Employment Law Today — www.employmentlawtoday.com • Canadian Labour Reporter — www.labour-reporter.com See carswell.com for information If an employer allows an em- ployee to repay an overpayment in instalments rather than in a lump sum, the CRA may require the employer to assess a taxable benefit for an interest-free or low-interest loan. When asking or requiring an employee to repay an overpay- ment, payroll departments have to make sure they comply with employment standards rules. The rules can vary, depending on the jurisdiction. Provincial differences In Nova Scotia and under the Canada Labour Code, for ex- ample, employers are allowed to make deductions from em- ployees' wages to recover pay advances and overpayments without needing the employees' permission. Manitoba allows for deduc- tions to correct payroll errors, but the Employment Standards Board requires employers to make the deduction as soon as possible: "Failing to deal with the error immediately could be con- sidered agreeing to a new wage." It notes that employees and employers should agree on how and when the employer will make the correction. If they cannot agree, Employment Standards advises employers to deduct amounts equal to what they would be allowed to take if they had a garnishment for the employee under the Garnish- ment Act. In that case, employ- ers can deduct up to 30 per cent of an employee's net wages, with the employee still receiving a minimum of $250 per month if the employee has no dependants and $350 per month if there are dependants. In Saskatchewan, Employ- ment Standards allows em- ployers to recover salary overpayments as long as the overpayment was the result of a clerical error and the employer catches and deals with it with quickly, making the deductions from WHAT TO DO on page 3 in the next pay period. Payroll should include the deduction on the employee's pay statement. If payroll does not catch an error right away, Employment Standards may not allow for deductions. On its website, Em- ployment Standards states that, "If significant overpayments occur, the employer must either negotiate a repayment sched- ule acceptable to the employee; or in the case of disagreement, consider recovery through the courts." British Columbia is among the provinces that require an em- ployee's written consent before an employer can recover over- payments or salary advances. "Should the employee not vol- untarily consent to a repayment arrangement, the employer can't use a withholding of all or a portion of wages as a remedy," says the Employment Standards Board's Interpretation Guide- lines Manual. In Ontario, although the Em- ployment Standards Act, 2000 only allows employers to make deductions without an employ- ee's permission under speci- fied circumstances (such as for statutory deductions and under court orders), the Employment Standards Board's Policy and In- terpretation Manual states that employers may deduct wages paid in error from employees. The reasoning is that, "(W)hen an employee is overpaid, he or she was never entitled to the amount that the employer seeks to deduct, so it cannot be re- garded as wages payable in the first place," the manual states. The Board allows employers to recover overpayments from regular wages, vacation pay and termination pay. For information on each juris- diction, contact the applicable employment standards board. Whether or not an employ- ee's written permission is re- quired, for good business prac- tices payroll departments may want to obtain it and keep it in their records. February 2015 February 2015 | CPR CPR Check your jurisdiction for specifi cations ployer for at least 30 calendar days and have worked or earned wages on at least 15 of the 30 calendar days before the holiday (except with an averaging agreement). Holiday pay: Pay an average day's pay for the holiday. This is calculated by dividing an em- ployee's total wages in the 30 calendar days before Family Day by the number of days worked. Total wages include wages, com- missions, stat holiday pay and vacation pay. Working on the holiday: If employees are eligible, they get an average day's pay per work day plus 1.5 times their regular rate for the first 12 hours, and double time for hours in excess of 12. Non-eligible employees are paid the regular rate. Calculating overtime: If an employee does not work on Family Day, do not include the holiday hours in overtime calculations. If an employee works on Family Day, include the hours worked when calculating overtime for that week. If an employee earns both statu- tory holiday pay and weekly overtime pay, the employer is not required to pay both. "Where an employee earns two combined entitlements, they do not 'double up' but, rather, the employee would get paid in a fash- ion that provides the greater benefit to the employee," says the Employment Standard Board's Interpretation Guidelines Manual. To date, no other jurisdictions have ta- bled legislation for a February holiday. The New Brunswick Liberal Party proposed a holiday for the province when it was in op- position. So far, as the governing party, it has not said whether a new statutory holi- day is on the agenda. from OVERTIME on page 6 Overpaying not always administrative error

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