Running a small business in British Columbia comes with its fair share of responsibilities, especially when it comes to managing payroll. Having a solid grasp of the rules surrounding overtime and statutory holiday pay is crucial. This ensures that your employees are compensated fairly while keeping your business compliant with provincial laws.
What is Overtime Pay?
Overtime pay is the extra pay employees are entitled to when they work more than the standard hours in a week. In BC, the standard work week is 40 hours. Overtime is calculated in two tiers:
- Time-and-a-half: This is paid when an employee works over 8 hours a day or 40 hours a week. For example, if an employee’s regular wage is $20 per hour, their overtime rate for time-and-a-half would be $30 per hour.
- Double-time: This kicks in after 12 hours worked in a single day. Using the same wage example, the employee would earn $40 per hour under double-time.
See the BC government’s official information page here to find a deep overview of all information about overtime pay.
Statutory Holiday Pay (Stat Pay)
Statutory holidays, often referred to as “stat holidays,” are public holidays where most employees are entitled to a day off with pay. There are 10 statutory holidays in BC, including New Year’s Day, Canada Day, and Christmas Day, among others.
To qualify for stat pay, employees must have been employed for 30 calendar days before the holiday and have worked or earned wages on 15 of the 30 days immediately before the statutory holiday.
The calculation for stat pay is simple: take the total amount the employee earned in the 30 days before the stat holiday and divide it by the number of days worked. This gives you the amount the employee should be paid for the holiday. For further explanation of stat holiday pay with in depth detail of the nuances involved see here.
Overtime and Stat Holidays
Things can get a bit tricky when an employee works overtime on a stat holiday. Not only are they entitled to stat pay, but if they work over 8 hours, they’re also entitled to overtime. The overtime rate on a stat holiday is time-and-a-half for the first 12 hours and double-time thereafter.
Record Keeping
Accurate record-keeping is essential. Make sure to track all hours worked, including overtime, and maintain these records for at least seven years. This will help you in case of any disputes or audits.
Tips for Small Business Owners
- Understand the Employment Standards Act: Familiarize yourself with the Act to ensure you’re following all the rules.
- Use Payroll Software: Invest in reliable payroll software that can automate calculations for overtime and stat pay. Our recommendations include Quickbooks Payroll, Humi, and Wagepoint.
- Communicate with Employees: Keep your team informed about how their pay is calculated. Transparency builds trust.
- Stay Organized: Keep detailed records of hours worked, including overtime and holidays. This will save you time and headaches later on.
- Seek Professional Advice: When in doubt, consult with a professional accountant, bookkeeper, or certified payroll specialist. It’s better to ask questions than to make costly mistakes.
Understanding and accurately calculating overtime and stat pay is vital for small business owners in BC. It not only ensures that you’re treating your employees fairly but also protects your business from potential legal issues. By staying informed and organized, you can manage your payroll with confidence every time.
