Several changes to pension, employment standards, payroll and other legal requirements are coming into force January 1, 2013 or later. We published this post on December 21, 2012 but thought it would be important to publish again to ensure employers, human resources professionals, payroll specialists, legal advisors, managers and supervisors among others start 2013 on the right foot.
Below you will find brief summaries, listed by jurisdiction, of some of the important changes employers need to know about and prepare for:
National (applies across all Canadian jurisdictions)
- Effective January 6, 2013, employment insurance reforms will be in place. The Working while on Claim pilot project is being replaced by a new pilot project to encourage claimants to work more while receiving benefits. The new pilot project (established according to changes passed in the federal Budget 2012) has been created to cut the current clawback rate in half and apply it to all earnings made while on claim until claimants earn 90 percent of the earnings used to establish their benefit rates. The government will test this new approach to create incentives to accept more available work while receiving benefits from August 5, 2012, to August 1, 2015. The new project will reduce a claimant’s benefits by 50 percent of their earnings while on claim starting with the first dollar earned. This ensures claimants will benefit from accepting more available work. There will be no change to the treatment of earnings during the waiting period. The pilot project applies to claimants receiving regular, fishing, compassionate care and parental benefits, as well as self-employed persons claiming compassionate care and/or parental benefits. Moreover, the new rules will redefine what constitutes a “reasonable job search” and “suitable employment” to discourage claimants from turning down job opportunities while receiving benefits and to ensure that Canadians receiving EI benefits fill vacant positions before they are offered to foreign workers. The changes will also divide claimants into three categories: long-tenured workers, occasional claimants and frequent claimants. Frequent claimants will be required to accept any job they are qualified to perform and wages starting at 70 percent of their previous hourly earnings after having received benefits for seven weeks.
- Regulations to amend the Employment Insurance Regulations have been published in the Canada Gazette to extend the Best 14 Weeks pilot project until 2013. The Best 14 Weeks pilot project was scheduled to end on June 23, 2012. The amendment will extend the project until April 6, 2013, in the same 25 economic regions to test behavioural changes in anticipation of the new method and to bridge the gap until the new method comes into force. The new approach may involve an increase in the number of weeks used to calculate the benefit rate. The new permanent national approach to calculating employment insurance (EI) benefit rates based on the availability of work in each region of the country (Variable Best Weeks) will come into force effective April 7, 2013.
- Individuals with expired SIN numbers or work permits will no longer be able to collect EI benefits as of December 9, 2012. In the past, those with expired SIN numbers or permits who qualified for maternity or parental leave, or compassionate care benefits could also qualify for EI.
- On December 14, 2012, Helping Families in Need Act (formerly Bill C-44) received Royal Assent and is now law. This Act amends the Employment Insurance Act to,
- allow an eligible person to claim benefits where that person is providing support or caring for a critically ill child. This new EI benefit will provide income support for up to 35 weeks to eligible parents caring for a child (under 18 years of age) with a critical illness or injury. As with other EI special benefits, employees will need to have worked a minimum of 600 insurable hours in the last year. Self-employed workers who have opted into the EI program will need to have earned income in the previous calendar year ($6,342 in 2013) to be eligible for the benefit. All applicants will also need to submit a medical certificate signed by a Canadian-certified pediatrician or medical specialist. This provision comes into force June 2013.
- allow employees who fall ill while receiving EI parental benefits to access to EI sickness benefits. Sickness benefits of 15 weeks maximum may now be paid to a person who is unable to work because of sickness, injury or quarantine. Employees can either pause their parental leave to take the sickness leave, or take the sickness leave once the parental leave is up. This provision comes into force January 1, 2013.
- Federal Income Support for parents of murdered or missing children: a new grant will also be made available, beginning on January 1, 2013. This new grant will provide $350 per week for up to 35 weeks to parents of murdered or missing children (less than 18 years of age) whose death or disappearance is the result of a suspected Criminal Code offence. To receive this taxable grant, affected parents will need to have earned a minimal level of income in the previous calendar year ($6,500) and take leave from their employment.
- Old Age Security: To improve the efficiency and sustainability of the OAS, Budget 2012 introduced three changes to the OAS in part 1 of the Jobs, Growth and Long-Term Prosperity Act, which received royal assent in June 2012. The first, an increase in the age of eligibility will gradually increase the age of eligibility for OAS benefits from age 65 to age 67. For Allowances, the age of eligibility will increase from age 60 to age 62, beginning in April 2023.
A voluntary deferral will allow individuals to voluntarily defer their OAS pension up to the age of 70, in exchange for a higher pension to be collected later. The OAS pension will be increased by a factor of 0.6% for each month a person defers the collection of the OAS, up to the age of 70. The amendments will also gradually increase the age limit for the deferral option from age 70 to 72 to correlate to the age of eligibility as of April 2028.
The OAS will have an automatic enrolment under the amendment. The Minister will have the discretion to waive the requirement for an application for the OAS pension at age 65, and for the Allowances at age 60. This can occur when the Minister is satisfied that, on the basis of the information obtained under the Old Age Security Act, the individual meets the eligibility requirements for this pension. The legislation also allows the Minister to presume, in the absence of any evidence to the contrary, a person has in effect met the requirements.
Individuals will be responsible for providing legal status and residence, as well as correcting any errors in this information, and for declining the waiver for application if they so choose, before the age of 65.
- On December 14, 2012, the second part of Jobs, Growth and Long-Term Prosperity Act (previously Bill C-45) received royal assent and is now law. Key measures in the Act include:
- Extending for one year the job-creating Hiring Credit for Small Business, which benefitted nearly 534,000 employers last year; This will amend Part 4, Division 15 amends Part IV of the Employment Insurance Act to refund a portion of employer premiums for small businesses, as a temporary measure and where applicable in order to extend the Hiring Credit for Small Business to 2012. This credit is capped at $1,000 per employer;
- Changing retirement compensation arrangements and Employees Profit Sharing Plans to ensure that EPSPs are used for their intended purposes and not to obtain unintended tax benefits. This measure introduces a tax imposed on specified employees on “excess EPSP amounts.” An excess EPSP amount is the portion of an employer’s EPSP contribution (allocated by the trustee to a specified employee for a taxation year) that exceeds 20 percent of the salary received in the year by the specified employee from the employer. The tax is imposed at the top federal rate (29 percent) plus the top provincial rate for the relevant province. This latter amount is to be shared with the provinces. In general, this measure applies in respect of EPSP contributions made by an employer on or after March 29, 2012;
- Including employer contributions made to certain types of group sickness or accident insurance plans in the income of employees. This measure provides that when an employer contributes to a group sickness or accident insurance plan, the amount of the employer’s contribution is to be included in the employee’s income for the year in which the contribution is made, with the exception that any benefits would be subject to tax in the employee’s hands. This measure applies to contributions made on or after March 29, 2012, which relate to coverage after 2012;
- Supporting families and communities by improving Registered Disability Savings Plans to provide greater access to RDSP savings for small withdrawals, this measure replaces the requirement to repay any Canada Disability Savings Grants (CDSGs) or Canada Disability Savings Bonds (CSDBs) paid into the plan in the prior 10 years preceding a withdrawal from the plan with a requirement to repay CDSGs and CDSBs at a fixed ratio to the amount withdrawn, among others;
- Helping Canadians save for retirement by implementing the tax framework for Pooled Registered Pension Plans. This framework sets out the tax treatment for contributions to, and distributions from, PRPPs. It also deals with a number of related issues, such as the registration of pooled pension plans, and transfers on the death of a PRPP member. These amendments come into force on the day that the Pooled Registered Pension Plans Act comes into force;
- Dissolve the Canada Employment Insurance Financing Board and an interim means of establishing EI premium rates will be set up to replace it. The Crown Corporation is run by a seven-member board. This move continues EI changes started with the first omnibus budget bill, as cabinet gradually receives more authority over EI. The Commission and actuary reports will be tabled in Parliament by the Minister of HRSD;
- Transfer all the work of the Hazardous Materials Information Review Commission to Health Canada and, as a result, the Commission would cease as a stand-alone agency;
- The Canada Revenue Agency Act will be amended so that the Canada Revenue Agency is also made subject to Section 112 of the Public Service Labour Relations Act.
- Implementing proposed CPP amendments range from consequential changes to the reforms that were made to modernize the CPP in the previous 2007-2009 triennial review to amendments that will ensure consistency within the different parts of the CPP legislation. In particular, Division 7 of Part 4 would make the following technical amendments:
- Clarifying that contributions for certain benefits must be made within the contributory period;
- Clarifying how certain deductions are to be determined for the purpose of calculating average monthly pensionable earnings; Determining the minimum qualifying period for certain late applicants for a disability pension;
- Enhancing the authority of the Review Tribunal, the Pension Appeals Board, and the Social Security Tribunal;
- Introducing regulation-making authority in the CPP that will prescribe the calculation for “substantially gainful” in respect of an occupation for disability purposes;
- Removing the references to Divorce Act and “decree of absolute” to recognize foreign divorces for the purpose of credit splitting; updating legislative references to reflect the renumbering of section 53;
- Providing the Chief Actuary with more flexibility regarding actuarial assumptions used in supplementary actuarial reports.
Federally regulated workplaces and public service
- On December 14, 2012, the second part of Jobs, Growth and Long-Term Prosperity Act (previously Bill C-45) received royal assent and is now law. The new law amends the Canada Labour Code (CLC) with respect to: public holiday pay, a formal mechanism to deal with complaints regarding unpaid wages and other labour standards violations, among others. Key measures in the Act of importance to federally regulated workplaces include:
- The calculation of holiday pay: A new formula will be put in place to simplify the calculation of holiday pay. For most employees, holiday pay will be equal to 1/20th of wages earned (excluding overtime) in the four-week period preceding the week in which the general holiday occurs. To reflect the fluctuating nature of their earnings, holiday pay for employees paid in whole or in part by commission will be 1/60th of the wages earned (excluding overtime) in the 12-week period preceding the week of the general holiday – unless the employee was not employed for that entire period, in which case the regular formula for calculating holiday pay would apply. Consequential changes will also be made to eligibility requirements for holiday pay. To qualify, 30 days of employment with the employer will still be required, but it will no longer be necessary to have earned wages for 15 of the 30 days preceding the holiday;
- Amendments to Part III of tbe CLC will provide for a formal mechanism to deal with complaints regarding unpaid wages and other labour standards violations that are not covered by unjust dismissal provisions. This will largely codify existing practices, while explicitly setting out time limits for filing complaints (normally six months from the date of the alleged offence), the circumstances in which an inspector may suspend or reject a complaint (e.g., if it is frivolous, has been settled or should be dealt with under a collective agreement’s grievance procedure), and the process for reviewing an inspector’s decision to reject a complaint. Additional provisions will authorize inspectors to mediate complaints to help parties reach a settlement, where possible;
- Part III of the CLC will be amended to set limits on the period of time that may be covered by an inspector’s payment order. A payment order could cover wages and other amounts that became owing in the period starting 12 months before (or, in the case of vacation pay, 24 months before): the date on which the complaint was made; if earlier, the date on which the employee’s employment was terminated; if the payment order results from a pro-active inspection unrelated to a complaint, the date the inspection started;
- New sections will be added to Part III of the CLC to provide for a new administrative review mechanism aimed at reducing the reliance on external referees in wage disputes. A person affected by an inspector’s payment order or notice of unfounded complaint will be able to request, with written reasons, a review of the decision. Such a review would be conducted by a Labour Program official designated by the Minister, who could confirm, amend or rescind the inspector’s decision. The decision on review could be further appealed to a referee, but only on a question of law or jurisdiction. The Minister could also refer a complex case directly to a referee, rather than having it dealt with under the new review mechanism. Some consequential changes will also be made to other Part III provisions. This includes setting a clear 30-day deadline to dispense any vacation pay owed to an employee after a termination of employment, authorizing the Minister to reimburse employers or directors any amounts they are owed that were deposited with the Labour Program, and specifying that payment orders may not be filed in court for enforcement purposes while they remain subject to a review or an appeal.
- Introduce new provisions allowing unpaid leave of 37 weeks for parents who need to care for a critically ill child
- Introduce new provisions allowing unpaid leave of up to 52 weeks if the employee is parent of a child who has died or disappears as the result of a suspected Criminal Code offence
- Employees whose employer is subject to Part III of the CLC who take advantage of the new enhanced provisions will be able to do so without losing their employment as a result
- The amendments to the Canada Labour Code will take effect in January 2013 for parents of murdered or missing children, and in June 2013 for parents of critically ill children
- The government of Ontario has changed the Workplace Safety and Insurance Act, (WSIA) to expand coverage in the construction sector. Beginning January 1, 2013, independent operators, sole proprietors, partners in a partnership, and executive officers will all now require WSIB coverage to work in the construction industry. This means that they will now be required to register with the WSIB, report their earnings, and pay premiums on reported earnings. This includes those who carry out multiple business activities in different sectors, so long as one of those activities is in construction. . For more information on the new requirements, please refer to the WSIB’s website at www.beregisteredbeready.ca/.
- The Ontario Government announced upcoming changes to the Public Sector Salary Disclosure Act, coming into force January 1, 2013. The amendments found in Ontario Regulation 385/12 will be in the classification of amounts considered salary. Without limiting the generality of the definition of “salary” in the Act, the following amounts are considered salary for the purposes of the Act for each year beginning in 2012:
1. An amount received by an employee as remuneration on a per diem basis for performing his or her duties as,
i. a director, or
ii. a holder of office elected or appointed under the authority of an Act of Ontario.
2. An amount received by an employee as a retainer in consideration for agreeing to perform duties as a director or holder of office.
- On November 14, 2012, the Lieutenant Governor in Council proclaimed section 3 of Schedule 44 of the Strong Action for Ontario Act (Budget Measures), 2012 , and section 18 of the Securing Pension Benefits Now and in the Future Act, 2010 (Bill 120) , both in force effective January 1, 2013. As a result, section 55.2 of the Pension Benefits Act (PBA) (including the amended subsection 55.2(12)) comes into force effective January 1, 2013. Section 55.2 permits the use of a letter of credit to cover a portion of the pension plan’s solvency deficiency where prescribed requirements are met.
- Ontario Regulation 364/12 made under the PBA, comes into force on January 1, 2013. The regulations establish the requirements related to the use of the letters of credit which may cover a portion of the pension plan’s solvency deficiency under section 55.2 of the PBA.
- For most organizations, the next AODA obligations to be addressed following the Customer Service Standard reporting obligation will be the Integrated Standard accessibility policy and multi-year plan requirements to be completed by January 1, 2013 for some, and January 1, 2014 for others. For more information, read the following blog post on SLAW.
- Just in: On December 17, 2012, the Ontario government filed two regulations amending the Accessibility Standards for Customer Service and the Integrated Accessibility Standards regulations enacted under the Accessibility for Ontarians with Disabilities Act. O. Reg. 413/12 implements the new Built Environment Standard pertaining to the design of public spaces to the Integrated Accessibility Standards regulation (O. Reg. 191/11). These new standards cover a variety of public spaces such as exterior sidewalks and walkways, entrance to a building, outdoor public eating areas and play spaces, accessible parking, waiting areas, and service counters; it also establishes a compliance reporting schedule effective January 1, 2013. O. Reg. 415/12 modifies the compliance reporting schedule set out in the Accessibility Standards for Customer Service (O. Reg. 429/07). These regulations come into force on January 1, 2013.
- In addition, on December 17, 2012, the government filed O. Reg. 419/12, which amends Regulation 581, the Accessible Parking for Persons with Disabilities made under the Highway Traffic Act. This new regulation adds the requirements of the Integrated Accessibility Standards (O. Reg. 191/11) to the specifications for parking spaces designated on Crown land or under municipal by-law for use of persons with disabilities. This regulation also comes into force on January 1, 2013.
- The ministry has revised the occupational exposure limits with the help of stakeholder consultations. A reminder that the most recent changes take effect January 1, 2013 and more can be found here.
- On December 10, 2012, Bill 6: Protection and Compliance Statutes Amendment Act, 2012 received royal assent, became law and will come into force at various dates. The new law introduces new administrative penalties and significantly increases fines for penalties that already exist. It affects three pieces of legislation: the Safety Codes Act, the Fair Trading Act and the Occupational Health and Safety Act.
- Bill 1, Workers’ Compensation Amendment Act, 2012, received royal assent on December 10, 2012, became law, and came into force. The changes allow all first responders, including firefighters, police officers, sheriffs and paramedics, to receive compensation for presumptive Post-Traumatic Stress Disorder (PTSD) without shouldering the burden of proof.
- Bill 4: Public Interest Disclosure (Whistleblower Protection) Act, deals with the public disclosure of wrongdoing in the public sector to create a process for the disclosure of wrongdoing by public sector employees and protect them from reprisal, such as termination. The Bill received royal assent on December 10, 2012, became law and will come into force on proclamation at a later date in 2013. This new law includes the Alberta Public Service, provincial agencies, boards and commissions, as well as academic institutions, school boards and health organizations.
- Bill 10: Employment Pension Plans Act, is an overhaul of the existing pension legislation in Alberta and will repeal and replace the Employment Pension Plans Act. The new law received royal assent on December 10, 2012 and will come into force on proclamation at a later date in 2013 after the release of the supporting regulations. The new law harmonized pension rules between Alberta and British Columbia, making it easier for pension plans to both start up and operate effectively for their members; it provides more flexibility in pension standards, making it easier for private sector employers to design pension plans that meet both their needs and the needs of their employees, among other things.
- Family Day Act (formerly Bill 53) establishes a new public holiday, to be observed as “Family Day” on the day prescribed by the Lieutenant Governor in Council. This Act came into force on the date of Royal Assent but the first family day occurs on the second Monday in February 2013.
- Effective April 1, 2013, the province resumes the PST Tax and repeals the HST. The re-implemented PST, like the previous PST, will be a retail sales tax that applies when a taxable good or service is acquired for personal or business use, unless a specific exemption applies. Application of the PST and GST effective on or after April 1, 2013 equals 5% GST + 7% PST.
- WorkSafeBC Board of Directors approved a number of amendments to the Occupational Health and Safety Regulation. These will come into effect on February 1, 2013. The changes are proposed concerning the following:
- Part 5, Chemical Agents and Biological Agents: the changes involve correcting the reference to combustible dust and updating the reference to the Electrical Code
- Part 11, Fall Protection: the proposed changes clarify whether fall protection anchors must be re-certified annually by a professional engineer in all circumstances
- Part 12, Tools, Machinery and Equipment: the amendments deal with recognizing a riving knife as an acceptable device to prevent kickback on table saws
- Part 12, Tools, Machinery and Equipment, and consequential amendments to Part 23, Oil and Gas: these changes would prohibit applying compressed gas at a greater pressure than the pressure rating for a closed vessel that is not a registered pressure vessel, and require such vessels to have appropriate pressure relieving capability
- Part 13, Ladders, Scaffolds and Temporary Work Platforms, and Part 19, Electrical Safety: the changes would clarify the appropriate requirements for dielectric testing of insulated elevating work platforms and ensure consistent requirements
- Part 13, Ladders, Scaffolds and Temporary Work Platforms: the changes involve the use of work platforms supported by a lift truck
- Part 16, Mobile Equipment: the amendments clarify what equipment must meet and be used in accordance with section 16.3(7)
- Part 19, Electrical Safety: the changes would replace current terminology with terms that are appropriate to low voltage electrical equipment
- Part 19, Electrical Safety: the changes would establish a provision allowing the practice of passing the bucket of an insulated aerial working device between energized high voltage conductors if not practicable to do work otherwise due to terrain or other obstacles
- Part 26, Forestry Operations and Similar Activities: the amendments would require signage on all resource roads in BC showing radio channels when an Industry Canada road channel has been assigned, and radio frequencies when an Industry Canada channel is not assigned, but a radio frequency is assigned.
Bill 3, The Employment Standards Code Amendment Act (Leave Related to the Critical Illness, Death or Disappearance of a Child) received royal assent on December 6, 2012 to amend the Employment Standards Code to
- allow Manitoba employees to take advantage of the new federal EI benefits to care for the critical illness of child. It gives parents the right to take an unpaid leave from their employment and to be reinstated at the end of the leave. The leave related to critical illness of child is expected to come into force in June 2013 when the federal Act comes into force.
- allow unpaid leave to parents to help deal with the death or disappearance of a child that occurred as a result of a crime under the Criminal Code. Leave related to the death or disappearance of a child comes into force January 1, 2013, to coincide with the introduction of federal income support benefits.
Saskatchewan is introducing summary offence ticketing to improve workplace safety effective January 1, 2013. Occupational health officers will be issuing financial penalties for non-compliance with occupational health and safety law at workplaces through summary offence ticketing, which consist of issuing a ticket similar to a traffic ticket to employers, contractors, owners, suppliers, supervisors, self-employed persons and workers for violations of the province’s occupational health and safety legislation. Ticket amounts for infractions range from $250 to $1,000. The regulation includes a six-month transition period in which ministry officials will work with stakeholders to introduce the ticketing system to employers and workers across the province.
Bill No. 140, Transgendered Persons Protection Act received royal assent on December 6, 2012 to amend the Human Rights Act to explicitly include gender identity and gender expression as prohibited grounds of discrimination and harassment. The new law came into force on assent.
Newfoundland and Labrador
The Newfoundland and Labrador Workplace Health, Safety and Compensation Commission reminds employers and workers that commencing January 1, 2013, workers operating in confined spaces are required to have completed training with an approved confined space entry (CSE) training provider. The training is required under Newfoundland and Labrador Occupational Health and Safety Regulations and will be enforced by the Occupational Health and Safety (OHS) Branch of Service NL. The new training is valid for three years from the date of completion. The OHS Branch has the authority to issue stop work orders in any workplace where training requirements have not been met.
Prince Edward Island
- The Prince Edward Island Workers’ Compensation Board is making changes to section 9 of the Occupational Health and Safety (OHS) Regulations related to First Aid effective January 31, 2013. The changes are quite extensive and can be viewed here.
- Effective April 1, 2013, HST will apply to most goods and services that are currently subject to the goods and services tax (GST) in Prince Edward Island. The rules that have been developed to allow for a smooth transition to the harmonized sales tax (HST) system for the implementation of HST and to avoid double taxation and non-taxation for consumers and businesses in PE are ready. To ensure HST is applied in the fairest manner possible for businesses and consumers, the same approach will be used as other provinces that have implemented HST. For the most part, this means HST will apply to prepayments made on or after February 1, 2013, for goods or services that will be provided on or after April 1, 2013. Certain businesses and public service bodies may be required to self-assess the PE component of HST on amounts paid or payable after November 12, 2012 and before February 1, 2013, for goods or services provided on or after April 1, 2013.
In March 2012, the governments of Canada and Quebec entered into a comprehensive integrated tax coordination agreement containing undertakings intended to better harmonize the Quebec sales tax (QST) regime with the federal goods and services tax (GST) and harmonized sales tax (HST) regimes. These harmonization measures are scheduled to take effect on January 1, 2013. The GST will no longer be included when calculating the amount of QST. To ensure that the total tax to be paid does not change, the province plans to raise the rate of the QST from 9.5% to 9.975% as of January 1 2013, which is the current QST rate including the GST.
Payroll: Year end and rates for 2013
It’s the time of the year again when employers and payroll specialists have to start their T4 year-end process and need to know what’s new in payroll for 2013. All employee payroll records for the year in question must be updated, adjusted, and cleared prior to December 31 of each year. Employers must file 2012 T4 information returns and summary forms, and provide employees with T4 slips by the last day of February 2013 (February 28). Additional information on T4s, end of the year issues and payroll amounts effective January 1, 2013, read this article provided by HRinfodesk published by First Reference Inc. titled: “End of the year 2012 – what’s new for payroll 2013.”
For more details on the specific requirements, please consult HRinfodesk.com.
First Reference Human Resources and Compliance Managing Editor