Small Businesses and Minimum Standards in the Workplace: Whose Obligation is it Anyway?

The contract of employment, negotiated between the employer and the employee, forms the backbone of the employment relationship. Some business owners think this contract defines all the terms of the employer / employee relationship.  In actuality, in addition to this contractual relationship, there is a foundation of minimum employment standards that apply to all employer / employee relationships. The minimum standards are set out in the Saskatchewan Employment Act (the “Act”).

The Act is a mammoth piece of legislation, covering a wide array of obligations on employers and employees. The focus of this article will be on Part II of the Act, governing minimum employment standards. I will attempt to address some of the most commonly overlooked obligations that a small business has towards its employees.

1.    Am I covered by the Act?

Part II of the Act applies to most employees and employers in Saskatchewan. Some groups are specifically excluded, including federally regulated businesses, family businesses, and self-employed individuals.

An “employee” is a person who an employer permits, either directly or indirectly, to perform work or services and receives or is entitled to pay as a result. An “employer” is a person or business that operates a place of employment and employs the services of one or more workers.

2.    What is the point of the Act?

The Act works to protect the interests of both employees and employers. It sets minimum requirements respecting compensation and work conditions. It is the ground floor that you cannot go below, and it serves to bolster the employment relationship, providing a beginning point from which the relationship can grow.

3.    Can’t I Negotiate a Better Deal?

Employers and employees cannot contract out of the minimum standards, nor can they be waived in a manner that is less favourable to the employee. However, employees and employers can negotiate their own obligations under their contract of employment, as long as these obligations sit above the ground floor set by the Act.

4.    But, “we do things informally around here”!

Small businesses are just that – small. Quite often small businesses want to keep the general day-to-day operations informal and casual.  While this type of small business culture is perfectly appropriate, there are minimum standards around work scheduling and hours that must be implemented by the employer.

• Schedules: Scheduling can be neglected by small businesses that have very few employees or simply do not feel as though they are big enough to justify a formal scheduling practice. At minimum, the employer must provide a work schedule that lays out the time when shifts and meal breaks begin and end. This must be provided to employees at least one week before the scheduled shift. If the proposed period of work changes, the employer must provide written notice of changes at least one week before the newly scheduled shift. Less than one week’s notice is permitted in unusual, unexpected, or emergency situations.
• Hours: There is a limitation to the number of hours an employee is required to work in a week. Generally, an employer must not require an employee to work or be at the employer’s disposal for more than 44 hours in a week. The employee may agree to work longer, but has a right to refuse. Importantly, employees are entitled to a period of 8 consecutive hours of rest in any 24-hour period, barring an “emergency situation”. An emergency is determined to as a situation where there is an unforeseen and imminent risk of danger to a person, property, or the employer’s business.

Non-salaried employees have to be paid for each hour or part of an hour worked. If the employee is required to be available to do certain tasks at any time, if asked by the employer, the employee must be paid for this time.

• Breaks: All employees are entitled to a 30 minute unpaid break for every five hours of work. However, if the employee is required to stay past five hours while working then the meal breaks must be paid. Coffee breaks are discretionary, but if the employer provides them, they must be paid.

5.    My small business works on a feast and famine schedule – can I just pay my employees once the business has been paid?

A lot of small businesses are project-based and / or function with the motto “do work now, get paid later”. The Act provides rules regarding when an employee must be paid, the pay intervals, the form of payments, and the approved deductions from wages.

As a minimum standard, employees must be paid monthly, semi-monthly, or every 14 days. There is an obligation on the employer to pay the employee’s total wages in accordance with the terms and conditions of the employment contract. A statement of earnings must be provided on each payday, as well as wage adjustments and any deductions made. Even if a small business does not have extensive record-keeping practices, the employer is required to keep an employee’s records for a period of two years, at minimum.  

6.    An employee called in sick. Do I have to pay this employee?

It is a common misconception that the employer must pay wages to an employee if they are away sick. While this is not an obligation under the Act, it may still be beneficial to the employment relationship to provide this benefit within the contract of employment.

7.    An employee wants more vacation time. Do I have to provide it?

All full-time, part-time, and casual / temporary employees receive vacation pay. Employees receive a minimum of three weeks vacation per year after one year of employment. Employees who have completed 10 years of work with the same employer receive four weeks vacation. While these are the minimum required vacation periods for employees, there is nothing preventing the parties from negotiating for more vacation time in the employment contract. As a small business interested in engaging in a positive relationship with employees, providing vacation time above the minimum standard may be something to consider.  

8.    Is an employee allowed to take all of their vacation at one time?

An employee is entitled to take all of their vacation in one continuous period. However, employees must receive approval from the employer for each vacation period. Further, if an employer cancels an employee’s vacation after approving it, the employer must pay all non-refundable deposits, penalties, and other pre-paid expenses that are related to the vacation.

9.    An employee just told me she is pregnant. Now what?

There are three different types of employment leaves that are specified in the Act: family, service, or medical. Maternity leave is one specific example of a family-related leave.

A current employee who has been employed for more than 13 consecutive weeks before the day leave is to begin is entitled to maternity leave. The employee must provide written notice of four weeks before the day her leave begins, along with a medical certificate. The employee should also include the estimated date of return to work. A pregnant woman can get up to 18 weeks of unpaid maternity leave, plus up to 34 weeks of unpaid parental leave. The parent who does not take the maternity leave can take up to 37 weeks of unpaid parental leave.

Once an employee returns from maternity or parental leave, the employee must be re-employed in the same job or in a job that is comparable to their one held before leave began.  

10.  Do I have an obligation to provide work to my employees?

There is no implied or statutory duty to provide actual work to an employee. This duty is sometimes negotiated into the formal employment contract to help foster good-faith dealings between the employer and employee. However, because it is not a statutory obligation to provide work, it explains why the employer must give notice of termination, or pay in lieu of notice.

To some extent this obligation cuts both ways – For example, if an employee with 13 or more weeks of service decides to leave, they must provide at least two weeks’ notice before quitting. Similarly, if an employee is terminated, there is a minimum notice that corresponds with the employee’s length of service. For example, for an employee who has worked more than 13 consecutive weeks but less than one year, the notice period is one week.   

So… Whose Obligation is it Anyway?

The employment relationship is a complex one, regardless of whether your business is small, medium, or large. Both employees and employers have minimum obligations under the Act. Keep in mind that the Act only stipulates the floor of requirements, and it may be beneficial for the employment relationship to negotiate a better deal.

This article is meant to be a primer on some of the commonly overlooked minimum obligations of the employment relationship. This just scratches the surface of these obligations. In no way does it cover all of what is required under the Act. If you have any further questions regarding minimum standards in the workplace contact a lawyer at McDougall Gauley LLP for assistance. Stay tuned for Part II of this article series.