6 Things to Know about Alberta Payroll, Taxes, and Regulations
Does your staffing firm have operations in Alberta? Maybe you’re hoping to expand your operations to Canada’s Wild Rose country in the near future. If so, you should be aware of the rules and regulations surrounding employment, payroll, and taxes.Here are a few of the basics to get you started.
1. Alberta Has Canada’s Highest Minimum Wage
On October 1, 2018, Alberta surpassed Ontario by increasing minimum wage to $15 per hour. Since Ontario rolled back legislation increasing the minimum wage to $15 in January 2019, Alberta now maintains Canada’s highest minimum wage.
Employers are required to pay this amount to any employee, and many positions will need to start above it.
2. Legislation Governs Working Hours and Breaks
Like most of the other provinces, Alberta has employment legislation that governs employee scheduling and breaks. For example, if you send workers home early, you must pay them for a minimum of three hours’ time. If you require an employee to be present, you must pay them. If you want employees to report 15 minutes early, then you must pay them for the extra 15 minutes.
You also need to give workers 24 hours’ notice if you want to change their shifts. Overtime pay kicks in at 44 hours or if a worker works a shift longer than eight hours in a single day.
Breaks are also legislated. Employees cannot work more than five hours without a break. After five hours, they’re entitled to 30 minutes of rest. This can be paid or unpaid, and you can give it out in blocks of 10 minutes or 15 minutes, or as one 30-minute break.
3. Overtime, Holiday, and Vacation Pay
Alberta’s updated labour standards revised the formulas for vacation pay, holiday pay, and overtime.
Overtime hours can now be banked for up to six months, at a rate of 1.5 hours for each hour of overtime worked. This generally allows the employee to trade overtime hours for time off.
General holiday pay is calculated as five percent of wages, general holiday pay, and vacation pay earned in the four weeks before the holiday. There’s also no requirement to have worked 30 days in the past year to be eligible for pay.
Vacation pay must be equivalent to four percent, or two weeks, of total wages until an employee has been employed for five years. After five years, the rate increases to 6 percent.
The revised standards also allow employees to take half-days as vacation.
4. Terminations and Layoffs
Alberta’s revisions to labour standards also introduced some changes to how employers must handle terminations and layoffs. One example is that indefinite temporary layoffs are no longer allowed.
Employers also can’t force employees to use vacation or overtime entitlements during a termination notice period. Termination notices for large groups were increased.
5. Small Businesses Have a Tax Reduction
In recent years, Alberta reduced the burden of tax on small businesses. This was achieved by lowering the small business tax rate to two percent, from three percent. The Small Business Deduction (SBD) was increased from nine percent to 10 percent.
Businesses in Alberta must collect GST from their clients.
Employers are also expected to deal with payroll taxes. Most of the regulations around this are federal, although the rates of income tax withholding will vary with provincial rates. EI and CPP payments may also vary by province and worker salary.
6. Improved Leaves
Like other Canadians provinces, Alberta also made changes to leave entitlements for workers in its updated standards. The new personal and family responsibility leave provides five unpaid days per year for employees to take leave.
There are many new unpaid leaves employers need to be familiar with, offering up to 52 weeks in some cases.
If you’re planning to operate a staffing firm in Alberta, you need to know these regulations and more. A back office provider can help.