Canadian Payroll Reporter

6 Canadian HR Reporter, a Thomson Reuters business 2016 News June 2016 | CPR ing a provincewide employment standards inspection blitz focus- esd on young workers (under 25 years) employed in food servic- es, retail, construction and other sectors. To help payroll and HR de- partments stay on top of em- ployment rules related to hiring youth, here is an overview: Social insurance number: Young people, like other em- ployees, need a social insurance number to do paid work. There is no minimum age for applying for a SIN. If they do not have one, the employer must inform them they need to go to Service Cana- da to apply for one. "Within three days of their start date, they should be able to show proof that they have applied for a social insurance number and provide you with the number once they receive it," says Patricia Joncas, a payroll consultant with Carswell's Pay- roll Consulting Group. Source deductions: Depend- ing on their age and circumstanc- es, young employees may be sub- ject to source deductions for CPP, EI and income tax or only one or two of the deductions. CPP: Employees under 18 do not contribute to the CPP (or QPP in Quebec). "They need to know whether the CPP contributions are go- ing to come off immediately or sometime during the period of time (the young person) will be employed," says Joncas. Once 18, payroll has to start deducting CPP contributions if the employee works in pension- able employment. Contribu- tions begin in the first pay dated in the month after the employee turns 18. (For QPP, deductions begin on the first day of the month following the month an employee turns 18.) To calculate CPP contribu- tions, payroll has to prorate the employee's maximum yearly contribution over the number of full months in the year after the employee turns 18. While most payroll depart- ments follow these rules, they may not always inform employ- ees of them, which could leave some young workers surprised when their first pay after turning 18 includes a new deduction. For young people, this may be the first time they have heard about CPP, EI or income tax. "(Employers) should be pro- viding an explanation to students about their pay and what the stat- utory deductions are and what is going to come off to familiarize them with their pay cheque. A lot of them are very naive—they have no clue," Joncas says. In addition, she says employ- ers could inform young em- ployees how they will be paid (cheque or direct deposit), when and what information will be in- cluded on their pay statement. She adds while smaller compa- nies "may not have the manpow- er or the time to do it, it would be something that companies should consider just to explain to them what the expectations are and this is your pay cheque and this is what happens." EI: While CPP contributions are age dependent, employers have to deduct EI premiums from all em- ployees working in insurable em- ployment. "They could be 14 work- ing in a day camp and they would be subject to EI. The first dollar is insurable," Joncas says. Income tax: Like EI, there is no age requirement. Some young workers, however, may pay little to none. "It all depends on what is said on the TD1 form. That is going to determine the tax bracket and what amount of tax is going to be deducted, if any," says Joncas. It is essential young employees complete a federal and provincial (if applicable) TD1 form, even if they are only working for a few months or a few hours per week during the school year. Record of employment: Em- ployers have to complete and is- sue an ROE when an employee's employment terminates. This ap- plies whether the employee works for the employer throughout the year or only in the summer. It is also required regardless of wheth- er the employee plans to apply for employment insurance benefits. "Do an ROE even if they aren't going to use it. Completing an ROE, that's our obligation as an employer," Joncas says. T4: At year end, employers have to issue T4s for all employ- ees, regardless of their age or whether they plan to file a per- sonal income tax return. If the young person is a summer stu- dent, it is especially important to remind them at the end of the employment period to notify the payroll department if they change their mailing address. Employment standards: When it comes to employment conditions, employment stan- dards rules generally apply to young employees, meaning they are entitled to vacation pay, paid statutory holidays, overtime pay and termination pay as long as they are eligible. Some may be exempt from certain standards depending on the type of work they do. For ex- ample, in Alberta and Ontario, students who instruct children or work as counsellors at vaca- tion or recreation camps run by non-profit organizations are not covered by overtime or statutory holiday pay requirements. Employers need to be aware of age restrictions. "Depending on what type of sector the student is being hired to work in, there are minimum age requirements that have to be adhered to and some companies don't always follow that," says Joncas. For instance, in Ontario, young people may work in offices, stores or restaurants (as servers) once they turn 14. However, they have to be at least 15 to work in a fac- tory and 18 to work in an under- ground mine or at the working face of a surface mine. In many jurisdictions, employ- ers may have to apply to employ- ment standards for a permit to hire young people of certain ages or obtain the written consent of their parents. Even where permis- sion is not required, there may be restrictions on work hours. "Be mindful of, depending on the jurisdiction, if there are any limitations as to the number of hours the student can work. It's different in all provinces, so there might be a limitation es- pecially if it is during the school months," says Joncas. For example, in Alberta, em- ployees between the ages of 12 and 14 may not work more than two hours on a school day or eight hours on a non-school day. They are not allowed to work be- tween 9 p.m. and 6 a.m. By comparison, British Co- lumbia restricts working hours to a maximum of four on a school day and up to 20 hours a week in a week with five school days for employees aged 12 to 14. On a non-school day, these employees may work no more than seven hours per day, unless the employer has prior written approval from the director. They are not allowed to work more than 35 hours per week. Employers also have to com- ply with minimum wage rules. In most jurisdictions, young work- ers are entitled to be paid at least the general minimum wage rate in their province/territory. Exceptions may apply for types of work. In provinces such as Alberta, Manitoba, Nova Sco- tia and Ontario, students who instruct children or work as counsellors at vacation or rec- reation camps run by non-profit organizations are not covered under minimum wage rules. Some provinces have specific minimum wage rates that are lower than the general rate for inexperienced workers (Nova Scotia) or for workers who re- ceive tips, especially if they serve liquor (Alberta, British Colum- bia and Quebec). In Ontario, there is a specific minimum wage rate for students under 18 who work fewer than 28 hours a week or more than 28 hours dur- ing school vacation. Knowing and following the rules for employing young peo- ple will help keep employers out of trouble with the CRA and em- ployment standards boards. To ensure compliance, Joncas rec- ommends that employers regu- larly compare their payroll and HR policies to current legislative requirements. Employment standards differ between provinces from YOUNG on page 1 While CPP contributions are age-dependent, employers have to deduct EI premiums from all employees working in insurable employment.

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