Are You Overpaying Your Employees For Holidays?
Managing a company’s payroll is a complex undertaking, no matter who does it. If you or a member of your staff are well trained for the task and can keep up with the changing rules imposed by Revenue Canada... Doing your own payroll seems like a great idea. However, mistakes in this area can be costly, resulting in upset employees as well as possible penalties.
Keeping track of paid vs. unpaid holidays are a common obstacle that business owners can encounter when they take on payroll management. If you decide to tackle your own payroll, here are a couple of factors that you should keep in mind, so that doing it yourself doesn’t cost you over and above the money you’re trying to save.
When it comes to holidays & your employees, the employment tax act mandates that you pay your employees for 9 Annual Statutory Holidays in Ontario which include: 1. New Year’s Day 2. Family Day 3. Good Friday 4. Victoria Day 5. Canada Day 6. Labour Day 7. Thanksgiving Day 8. Christmas Day 9. Boxing Day
On these days, employees (including managers and professionals) are entitled to a day off with pay. An employee (full-time or part-time) has to be employed for a minimum of 1 day in order to be eligible for holiday pay. Work isn’t prohibited on public holidays; However, an employee who works on a public holiday is entitled to receive one and one-half times their regular rate of pay plus their regular pay for hours worked.
Another thing to keep in mind is that weekends don’t cut into an employee’s right to paid holidays either. If certain general holidays (New Year’s Day, Canada Day, Remembrance Day, Christmas Day or Boxing Day) happen to fall on a Saturday/Sunday, then employees should receive a holiday with pay on the working day before or after that statutory holiday.
Civic Holidays on the other hand, are a bit of an exception as is Rememberance Day. The first Monday in August is an example of a Civic Holiday, or unpaid holiday. In this case, you can pay your staff if you wish, but this isn’t a requirement imposed by the Canada Labour Code.
As you can see, there may be more holidays than you think. When managing your payroll it really helps to know what the Labour Code considers paid/unpaid before you start writing cheques. Don’t forget to keep checking in because it can change from year to year.