As Labour Day is weekend is here. it's important for small business owners in Ontario to understand their obligations regarding payroll. Labour Day is a statutory holiday, and there are specific rules around pay and entitlements that must be followed. Here’s what you need to know:
1. Statutory Holiday Pay
Labour Day is one of Ontario’s statutory holidays, which means most employees are entitled to take the day off with public holiday pay. To calculate public holiday pay, take the total amount of regular wages earned in the four work weeks before the holiday plus any vacation pay received during that period and divide it by 20.
2. Who is Entitled?
Generally, employees who have been employed for at least four weeks and have worked their last scheduled shift before the holiday and their first shift after the holiday are entitled to statutory holiday pay. Even if an employee is on vacation during this period, they are still eligible for holiday pay.
3. Employees Required to Work on Labour Day
If your business requires employees to work on Labour Day, they are entitled to:
Public holiday pay plus premium pay (1.5 times their regular rate) for each hour worked, or
Their regular rate of pay for hours worked on Labour Day and another day off with public holiday pay.
It’s important to discuss the options with your employees beforehand and ensure that any agreements are documented.
4. Handling Part-Time and Casual Employees
Part-time and casual employees are also entitled to statutory holiday pay if they meet the same criteria as full-time employees. The pay calculation is based on the number of hours they worked in the previous four weeks, making it essential to maintain accurate payroll records.
5. Impact on Payroll Processing
Remember to adjust your payroll processing schedules around the holiday. If your usual payday falls on Labour Day, you may need to process payroll earlier to ensure employees receive their wages on time.
6. Common Mistakes to Avoid
Misunderstanding Eligibility: Ensure you’re clear on who qualifies for statutory holiday pay. Missing out on this detail can lead to payroll errors and potential penalties.
Incorrect Pay Calculations: Double-check your calculations to avoid underpaying or overpaying your employees. Using payroll software or consulting with a payroll professional can help you stay accurate.
Late Payments: Plan ahead to ensure that all payments, including holiday pay, are processed on time. This not only keeps you compliant but also helps maintain employee satisfaction.
7. Consulting a Professional
If you’re uncertain about any aspect of Labour Day payroll obligations, it’s a good idea to consult with a payroll professional or bookkeeper. They can help ensure your business stays compliant with Ontario’s employment standards and avoids any potential issues.
Labour Day is an opportunity to show appreciation for your employees while also staying on top of your payroll obligations. By understanding the rules and planning ahead, you can ensure a smooth and compliant holiday period for your business.
Want to discuss payroll services with us? Reach out at support@mycbs.ca
Until next time,
Tanya Hilts, CPB, FCPB, AIA, L5CA
Cloud Accounting Technology Specialist
CEO, Cloud Business Services Inc.
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