More nagging about Employment Standards Act compliance

The Prophet Moses prescribed a labour code in the Old Testament. Will it take divine intervention to get some silvicultural contractors paying workers properly?

continue to hear complaints from workers and contractors alleging some silvicultural firms are still violating the B.C. Employment Standards Act Regulations by using what appear to be illegal bonus payment systems for piece-work completed by their employees. The two most common breaches are: contractors paying only minimum wage or some similarly low rate in lieu of the worker’s full piece work earnings—this is done over the whole or part of the work season with the balance, sometimes described as a bonus, paid later at the contractor’s convenience; the second typical contravention is the so called bonus offered for staying until the end of the contract or season. Typically workers are told they will receive one piece work rate for lasting for the period of time the employer specifies and a lower rate if they quit before that. Both these practices contravene the Act. Whether they are called bonuses or not does not distract from their illegality since they both involve penalizing or illegally withholding workers’ earnings.

The law is quite clear and unequivocal about workers being paid regularly and in full every two weeks for wages earned in a pay period. Section 17 of the Act states that wages are required to be paid at least semi-monthly and within eight days of the end of the pay period. The employer must pay the employee all wages earned in a pay period.

A simple way to understand the definition of wages found in Section 1 of the Act is to use the following test. If any component of a worker’s earnings, including the so called bonuses, are determined by hours of work, productivity, or efficiency then they are defined as wages and cannot be held back from workers. In the case of the two-tiered payment system for lasting the season or a project it is obvious the “bonus” amounts are tied to productivity and hours of work. Therefore they are wages and have to be paid accordingly. Likewise holding back piece work earnings beyond minimum wage or some other level would fail the bonus test for the same reasons. Not understanding this distinction or deliberately smudging the books on this payroll issue will get employers in trouble.

A true bonus occurs when an employer acting at their discretion pays an employee money unrelated to the amount of work performed, the efficiency it was performed with, or the time it took to do it. This money can be paid any time.

It is an unassailable right of Canadian workers and a fundamental obligation of their employers that employees be paid regularly and in full without wage off-sets or penalties. (Moses enshrined this tenet in the Old Testament.) Furthermore, the Act specifies that employers cannot use employees’ earnings to cover business costs. Contractors who, in effect, borrow money from their employees by withholding their earnings have a competitive advantage over contractors who meet their payroll through their line of credit.

The Act provides penalties for employers who breach this and other requirements. On the first offence (where a determination is issued) it is zero dollars. The second contravention could result in a penalty of $150 for each employee affected by the contravention. Subsequent penalties would be $250 and then $500 per employee.

However, the Act is being overhauled and a new penalty system may be in place under the new Act by this fall. There are no specific proposals available publically at this point. But government has indicated repeatedly that as part of its philosophy of professional reliability and self-regulation for business and industry violators will be subject to severe fines.

As well forest companies that hire firms who operate out of compliance with the Act may be found guilty of contractual negligence if they do not enforce clauses in their contract that bind the contractor to the laws of the land. Contractor clients have a role too in the professional self-regulation of the silvicultural industry.

“You shall not cheat the wages of a hired labourer who is poor and needy, whether he is of your brethren or of the strangers who are in your cities.

But you shall pay him his wages on the same day, neither shall the sun go down upon it; for he is poor, and it is because of his wages that he places himself at your disposal; lest he cry against you to the LORD, and it be sin against you.”

Deuteronomy Chapter 25 Verses 14, 15

I doubt even the Liberals will be rewriting this bit of labour code.

— Western Silvicultural Contractors’ Association WSCA Executive Director’s Office, RR#3 S36 C9, Nelson B.C. V1L 5P6 Phone/fax 250-229-4380 e-mail hotpulp@netidea.com