January 1, 2018 was the day on which may of the changes to the Employment Standards Act brought on by Bill 148 came into effect. These changes have received a lot of media coverage and some have been somewhat controversial.
One such change was the change to the formula used to calculate public holiday pay. Prior to Bill 148, public holiday pay would be calculated by taking the total amount of regular wages earned by an employee in the 4 week period prior to the public holiday, divided by 20. Under the new formula, the amount is calculated by taking the regular wages earned by an employee in the pay period prior to the public holiday, divided by the number of days worked.
In practice, under the old formula, an employee who works a full day, every day would receive a full day’s pay for the public holiday. An employee who works a half day, every day would receive a half day’s pay for the public holiday. An employee who only worked one day would receive 20% of a day’s pay for the public holiday.
Under the new formula, the employee working the full day would still receive a full day’s pay for the public holiday. The employee working half a day still receives a half day’s pay for the public holiday. However, the employee only working one day now receives a full day’s pay for the public holiday.
The result was an increase in the cost of employing casual employees as they would now be receiving significantly greater amounts of public holiday pay. It also resulted in the seemingly unfair situation where a casual employee could receive a greater amount of public holiday pay than an employee who worked every day. Overall, the change has been met with much confusion and objection from small business throughout the province.
Earlier this week, in a move that will be welcomed by many employers, the Government announced that it would be reversing this change to the calculation of public holiday pay. The Government introduced a new regulation which would reverse this amendment to the Employment Standards Act, 2000 and reinstate the previous method of calculating public holiday pay. It also announced a review of the public holiday pay rules, aiming to have a new system in place by 2020.
The new Regulation will come into force on July 1, 2018. This means that while the Regulation was announced shortly before the Victoria Day long weekend, employers will still have to provide public holiday pay for the Victoria Day holiday in accordance with the Bill 148 formula.
Whether you are an employer or an employee, if you have any questions regarding this new Regulation, please feel free to contact one of our experienced employment lawyers.
Blog post written by Associate, Brent Harasym.