If passed, certain provisions will effectively repeal the holiday (stat) pay formula that was brought in by the former NDP government on January 1, 2018. This is welcome news for many small businesses.

Prior to the NDP government’s 2018 changes to the statutory holiday pay regime, employees were eligible for holiday (stat) pay if “in at least 5 of the 9 weeks preceding the work week in which the general holiday occurs the employee worked on the same day of the week as the day on which the general holiday falls, the general holiday is to be considered a day that would normally have been a workday for the employee.” So, if the stat fell on a Monday, the employee would have had to have worked 5 of the last 9 Mondays to be eligible to receive stat pay.

The NDP government changed this rule as of January 1, 2018 such that all employees, regardless of tenure or days worked, were eligible to receive holiday (stat) pay. The stat pay was calculated (approximately) as 5% of the employee’s total earnings earned in the 28 days leading up to the holiday. This created a substantial compliance and calculation burden for many small businesses – many payroll companies have yet to figure out how to properly calculate this in an automated environment. Additionally, this measure raised payroll costs in nearly every business that we work with on payroll processing.

Bill 2 brings back the original “5 of the last 9 weeks” formula for holiday pay eligibility. Bill 2 also reverses the January 1, 2018 ‘banked overtime’ policy where time off in lieu of overtime pay back to 1 banked hour off in lieu for 1 overtime hour worked (currently 1.5 hours off in lieu of 1 overtime hour worked). These changes are set to take effect September 1, 2019.

To be eligible for stat pay, employees will have to have worked for the employer for at least 30 days in the 12 months preceding the statutory holiday. Further, if the employee is scheduled to work on the day before, after, or the day of the statutory holiday and doesn’t turn up to work, they will not be eligible to receive holiday pay.

We believe this will be welcome news for many small businesses, most notably those whose labour force works primarily on an hourly wage, and who have the option of closing shop on days of the week when stats normally fall (mainly Mondays).

This will help retail businesses, hair and beauty salons, restaurants and construction companies, to name a few.

Bill 2 also introduces a reduced minimum wage for workers under the age of 18 of $13/hour. The government claims that this will create new opportunities for youth to gain employment.

If you need help understanding how these new rules will impact your business, please contact us today.