CONTREN MANAGEMENT CONSULTANTS INC.
FALL 2002 NEWSLETTER
UPDATE - PUBLIC (STATUTORY) HOLIDAYS
We have previously outlined the new calculation required for public holiday pay for
part time employees. This calculation has changed from the original information provided
with the new Employment Standards Act.
Part time employees are required to receive, as public holiday pay, an amount equal to
the their total earned income (including vacation pay) in the four weeks preceding the
public holiday divided by 20.
For example, if you have a part time employee who worked two 5 hour shifts in the four
weeks preceding Labour Day that employee would receive ½ hour pay for the public holiday.
Please note that ALL employees must work their scheduled hours prior to and after the
public holiday in order to be eligible to receive public holiday pay.
A reminder that all employees are eligible for public holiday pay immediately upon
employment, subject to the calculation detailed above. The calculation includes new FULL
TIME employees. This might reduce the amount of public holiday pay owing to new full time
The upcoming public holiday days are Thanksgiving (October 14), Christmas, Boxing Day
and New Years Day.
DEBBIE ON HOLIDAYS
As required by Provincial Law (but against my better judgement) Debbie Duffus will
be on holidays September 15 to October 1. Please bear with me during this period.
For the past ten years our office has been utilizing the Voice-Tel (now Voice Com)
system for our communication requirements. We recently cancelled this service and set up a
traditional answering machine for multi users.
This means that the 905 540 7006 after hours number and the toll free
personal assistant numbers are now inactive.
We will be reviewing our messages on a timely basis whenever the office is closed.
Please note that if our phone lines are in use the answering machine will not pick up.
GOLF FEE'S AND MEMBERSHIPS
As all of our clients are aware Revenue Canada does not allow taxpayers (either
corporations or proprietors) to deduct any golf related cost as a business expense. This
does not mean that your corporation should not record this expense in its financial
information as a cost of business. In fact , having the company record and pay directly
for this expense can still save the owner of the company some after tax dollars.
For example, if an owner of a corporation takes twelve of their customers golfing
for the day the total cost could be $2,000. If the owner pays for this with corporate
funds the company will not receive any tax shielding for the cost but the owner does not
part with any personal cash. If the owner uses personal cash for the golf day the owner
will have paid in after tax dollars. If the owner is in the highest personal tax rate they
will need to earn about $3,500 in pre tax dollars.
By having the corporation pay for non deductible items the corporate owner/operator
will save personal tax dollars.
As mentioned previously any client receiving this newsletter by mail can have the
same information forwarded by email to review at their convenience. Please call the office
with your email address to be added to the broadcast list.
TERMINATION AND SEVERANCE PAY
Most employers have difficulty with the differences between termination pay and
severance pay. Most employees interchange these terms, especially when their employment
ends, without any understanding of these sections of the Employment Standards Act.
Termination pay is required when an employer eliminates an employees job without
proper written notice. The amount of termination pay coincides with the amount of written
notice required as detailed in the chart below:
Length Of Employment Notice (Or Pay) Required
Under 3 months
3 months but under 1 year
1 year but less than 3 years
3 years but less than 4 years
4 years but less than 5 years
5 years but less than 6 years
6 years but less than 7 years
7 years but less than 8 years
8 years or more
If you terminate the employee with cause (ie: chronic lateness or absence) the
employee is not entitled to termination pay. As mentioned previously the employer will
require substantial documentation if the employee disputes the termination with cause with
the Ministry Of Labour. In some cases it is more cost effective for the employer to pay
termination pay without any explanation in order to avoid the numerous meetings and
conversations with the Ministry.
A reminder that an employer can terminate any employee at any time for almost any
reason (except as specified in the Employment Standards Act) as long as proper notice or
pay is received by the employee.
An employee is entitled to severance pay if
- they have been employed by the same employer for five or more years
- was employed by a company that has an Ontario payroll exceeding 2.5 million
- were part of a group of fifty or more employees who lost their jobs on a six month
period or if the business was permanently discontinued.
As outlined above most if not all of our clients would never be involved in a severance
pay situation. Please keep in mind that the Employment Standards Act requirements are a
minimum that the employee will receive. Depending on the specific circumstances the
employee might be able to receive additional pay after termination through civil channels.