Payroll is one of the most important aspects of your business if you have employees. It can also be one of the most complicated functions to understand. The government and your employees expect you to get it right. This is the first post of two where we will cover the four most frequently asked questions we get from our clients about payroll.
What is the minimum wage?
Every province has a different minimum wage that is set by the government. In Alberta the minimum wage was raised to $15 per hour on October 1, 2018.
This wage is the same for everyone, there is no longer a lower minimum wage for people who serve liquor or receive tips.
There are some weekly & monthly minimum wages that apply:
Salespeople & other professionals – $598/week
Domestic employees that live in their employers’ home – $2, 848/month
It is important to note if the domestic employee does not live in their employers’ home you must pay them the $15/hour.
In addition to the minimum wage there is a minimum shift length that may apply.
For most employees, you must pay them at least 3 hours at minimum wage if they are required to show up to work (even if they are sent home before this). If your employee earns a wage higher than $15 an hour, you may pay them for actual time worked, as long as it is over $45.
There are some exceptions to this rule where you do not need to pay a minimum of 3 hours. One of which, is if it is the employee who cannot work the full 3-hour shift. Certain individuals also only require a minimum 2-hour shift, an example of this is an adolescent working on a school day.
You can click here for more information on minimum wage.
What is overtime & how is it paid?
Overtime must be paid to employees if they have worked more than 8 hours in a day or 44 hours in a week, whatever is greater. It must be paid at 1.5 times the employees wage. If you choose, you can bank this time for your employees. However, this time must also be banked at 1.5 times the overtime hours and must be used by the employees within 6 months of earning it. You will need a banked time agreement with your staff.
Example of OT:
Week 1: OT would be calculated on over 8 hours a day, as the week is under 44 hours.
The employee would get 2 (Tuesday) + 1 (Friday) = 3 x 1.5 = 4.5 hours OT
Week 2: OT would be calculated on over 44 hours a week, as Monday is 1-hour OT, the total of 47 – 44 = 3 is greater. Therefore, the employee would again be entitled to 4.5 hours of OT
Not all employees are entitled to Overtime, examples of employees not entitled are:
Professions, i.e. lawyers or engineers
Some industries also carry different Overtime regulations, these can include ambulance attendants & trucking.
You can click here to find out more about OT rules and see complete lists of all the exemptions mentioned above.
Payroll FAQs Part 2 will be posted on our blog February 7, 2019. Check back to learn about general holidays and vacation pay!