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More BC Employment Standards Myths Debunked

BC Employment Standards Myths DebunkedAs human resources management experts for small business, we find that many small business owners rely on BC Employment Standards myths, rather than on facts, to determine the terms and conditions of employment for their staff.

In a prior article, we debunked some common BC employment standards myths. We received a lot of positive response to this article, so let’s debunk some other common BC employment standards myths that we commonly hear from our clients.

 

Employment Standards Myth: I need to provide my employees with paid coffee breaks, in addition to a meal break.

Fact:

In BC, you must give a meal break to employees to ensure they do not work more than 5 consecutive hours without an opportunity for a break. The meal break must be at least 30 minutes. There is no requirement to pay an employee for this meal break unless they perform work during the meal break, or are required to be available to perform work.

The BC Employment Standards Act does not require employers to provide paid coffee breaks. Breaks of less than 30 minutes are not considered meal breaks. These informal breaks cannot be added up and substituted for a continuous ½-hour meal break.

What to do:

Ensure your employees’ work schedules are compliant with the hours of work and overtime provisions of the BC Employment Standards Act by providing them with a meal break of at least 30 minutes prior to them having worked 5 consecutive hours.

As for shorter, informal breaks, while they are not legally required, it may make sense in certain situations for employees to take breaks to get up, to stretch, and to interact informally with colleagues to discuss work matters. The type of industry you operate in and your organizational culture will impact whether providing informal coffee breaks makes sense for your organization.

Employment Standards Myth: I don’t need to pay my managers overtime pay.

Fact:

Although a manager is excluded from the hours of work and overtime provisions of the BC Employment Standards Act, they are entitled to be paid for all hours worked, according to their terms of employment.

In some cases this could result in a manager being entitled to additional compensation. Where there is evidence to support findings that the employer and the employee agreed that a specific number of hours of work would be compensated by a specific amount of wages, the employee would be entitled to extra wages for the extra time worked based on their regular rate of pay.

If your employment agreement specifies the hours of work a manager is expected to work, they could be eligible for straight-time pay for hours worked in excess of what’s in the contract. If the agreement doesn’t specify specific hours of work, but instead says something to the effect of “Your compensation is in recognition of all hours worked. You are not eligible for overtime given your managerial status.” then your managers can be exempt from being paid straight-time overtime wages.

What to do:

Ensure that the employment agreement between your organization and your managers clearly specifies whether or not their compensation is in recognition of all hours worked and whether they are eligible for straight-time overtime wages.

Employment Standards Myth: I have a “use it or lose it” vacation policy. If my employee doesn’t take their full vacation allotment in a year, I can pay out their balance at the end of the year.

Fact:

In BC, the Employment Standards Act separates vacation into two separate provisions – time off and pay.

  • Vacation Time Off – employees are eligible for at least 2 weeks of time off after completion of 1 year of employment and 3 weeks after 5 years of employment.
  • Vacation Pay – Vacation pay is at least 4% of an employee’s total earnings in the year entitling them to vacation pay and 6% after 5 years. Total earnings include all wages, overtime, commissions, bonuses, vacation pay, etc. Vacation pay is to be used when the employee takes time off so that the time off is paid. 4% usually works out to about 2 weeks and 6% usually works out to about 3 weeks.

Employers are expected to make their employees take the minimum amount of time off required in the year (i.e. the 2 or 3 weeks). If your policy allows for more than the minimum standards, then you are to make employees take the entire time off allotment promised in your policy.

While you can pay out the vacation pay that has been accrued, you cannot forfeit the time off. If you pay out the vacation pay, you still are supposed to make the employees take the vacation time as unpaid time.

Please note that vacation provisions differ by province. Please refer to the applicable employment standards legislation for your province to determine your rights and obligations.

What to do:

Employers should have a clear vacation use and vacation pay policy, clearly stipulating what vacation an employee is entitled to and when they must use it by.

Following Minimum Employment Standards – If you follow the above minimum provisions where employees earn time in one year but they don’t get to take it until the following year, employees have until the end of that following year to take the vacation time.

Vacation taken in year earned – Many companies provide employees with vacation in the first year. When we define “year”, some companies use anniversary year, while others use the calendar year. If the employee takes vacation in year 1, they usually go either one of 2 ways:

  1. The employee can only take vacation up to the amount that they’ve earned (i.e. the amount in the vacation accrual, or by a prorated number of days based on the portion of the year worked)
  2. The employee can take their full entitlement for the year. However, if they take more vacation than they have earned, and they subsequently leave employment in that year, they may owe the company money. In this case, the employer would either need to absorb that cost, or you would need to have a provision in the employment agreement saying that the company is authorized to deduct this overpayment from their final pay.

Vacation tracking by time rather than accrual – Rather than tracking vacation pay as a % of earnings, companies often just give employees a specific amount of paid vacation time. In this circumstance, an employee gets paid vacation of, say, 3 weeks. You track the days they take, continue paying them their regular salary during that time. Once they use up their 3 weeks, they don’t get any more vacation until the following year. With this method, if you promise a certain number of vacation weeks, you are obligated to provide that time as paid time off.

You would need to make very clear in the employment agreement that the paid vacation will be pro-rated during their first year of employment and their last year of employment and any year where they take a leave of absence. In certain circumstances (e.g. maternity leave), they would still be entitled to the time off, but the paid portion would be pro-rated. This method generally works for salaried and management employees.

The vacation accrual method is more common for hourly paid employees or those employees who work a lot of overtime because their hours and pay fluctuate. The vacation time off method without the accrual tracking is more commonly used among salaried or management employees who get a fixed salary and who don’t accumulate much paid overtime.

It’s important to have a consistent method of vacation tracking and taking time off in order to ensure all employees take the time off they are supposed to. You want all employees to take their time off so that they can rest and rejuvenate.

When it comes to managing your small business employees and the relevant employment standards legislation, it’s best to rely on facts, and not on BC employment standards myths and misconceptions. For HR services on staying on the right side of the law, please contact Vancouver-based human resources consultants Clear HR Consulting or check out the HR Policies & Procedures module of our HR How-To Series for Small Business.

 

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