Compliance policy and enforcement procedures

Compliance policy and enforcement procedures

Purpose

The following explains the current policy and the procedures followed by department staff when responding to employee complaints or situations where minimum employment standards have not been met.

Compliance Policy Statement

The provincial Employment Standards Code (Code) and Regulation establish minimum standards for the employment of many Albertans. They also provide ways to resolve disputes and steps to follow if standards are not met.

Alberta employers and their employees have a shared responsibility to comply with employment standards legislation. The Code recognizes that employers and employees are best able to manage their affairs when they understand their respective rights and responsibilities.

The Employment Standards (ES) Branch works to ensure Alberta worksites are fair and equitable by checking that standards are being followed and by providing information about standards to employers and employees.

If employers are not following provincial standards, ES Officers will investigate and seek to resolve the matter. They may use a variety of tools to enforce the standards and they may seek prosecution of offenders in the Alberta courts. ES also administers appeals made by both employers and employees.

Employment Standards Enforcement Procedure

ES has several ways to identify situations that may require some form of enforcement. Circumstances considered when determining the need for enforcement include, but are not limited to:

  • Whether the alleged violation of the Code or Regulation is specific to one individual only, or might indicate general payroll problems;
  • The employer’s past compliance history;
  • Vulnerability of the employee(s) making the allegation (such as youth, temporary foreign workers etc.); or
  • Industry-wide practices.

When violations of the Code are identified, ES Officers can enforce the laws in many different ways. Depending on the circumstances of the investigation or inspection, an officer will use the most appropriate tools to enforce the legislation, to correct violations and to hold offenders accountable. Enforcement tools include:

Investigation process

An investigation usually begins with a complaint or an inspection by an ES Officer. It may involve one or more of the following tools:

Note - The steps followed during a typical investigation are explained in the ES Compliance Enforcement Process diagram

  1. Begin the Investigation or Inspection

    When an investigation or inspection begins, employers are notified by an officer of the issues under review and may be provided with suggested ways to resolve the matter. Officers will conduct an initial review to determine if the employer is following all current standards. If an officer identifies problems, the matter will proceed through the enforcement process.  

  2. Notice of Officer

    In all cases requiring enforcement, officers will issue written demands to the employer to produce records regarding the employee(s) involved in the investigation.

    1. Notice for Production of Employment Records
      When officers identify violations, employers will be sent a letter telling them to produce payroll documents (which must be maintained by the employer) at a specified location, date and time. The inspection will typically occur at the worksite or the employer’s records office. Failure to comply is an offence. See Section 126 of the Code.

    2. Notice for Production of Information
      An officer will demand records relating to other employees to determine if the Code is being complied with. These demands may be to payroll companies, banking institutions or other government agencies. See Section 77(1) b & c of the Code.

    3. Notice of Inspection Posted at Worksite
      When it is decided that an inspection is required, the employer will be directed to post a Notice of Inspection provided by the officer. In cases where an employer does not have a permanent work location, employees may be notified of the inspection in writing by the employer.  

  3. Direction of Officer

    Throughout an investigation or inspection, officers may issue specific instructions requiring an employer to pay employees according to minimum standards. This could include instructions to make immediate payment to employees when earnings such as wages, overtime, holiday pay, etc. are due. Failure to do so can result in further enforcement action against the employer.

    Several sections of the ES Code and Regulation involve non-monetary requirements for employers and employees, such as proper rest periods. Officers may provide formal directions to an employer to comply with these sections. Failure to comply with a Direction of Officer can result in further enforcement action against the employer. See Section 79 of the Code.

    1. Notice to Comply
      This tool is used for non-monetary violations of the legislation where an employer must change a current employment practice, such as providing appropriate employment after returning from maternity leave.

    2. Cease and Desist Order
      This tool is used when an employer is prohibited from taking a certain action and must stop, such as not maintaining adequate employee records.

  4. Payroll Inspection and Audit

    Depending on the circumstances of the case (and after conducting a payroll inspection to determine if there are general payroll problems), the officer will identify the appropriate type of audit that may be required to correct violations of the Code or Regulation. There are three possible types:

    1. Officer-Directed Audit
      In cases where the employer has had no past compliance problems, officers will provide the employer an opportunity to retroactively correct payroll deficiencies under specific instruction. Employers will be advised in writing of the instructions and the consequences of a failure to comply with them, including the potential costs of other audit types.

    2. Crown Audit
      Officers will recommend a Crown Audit in cases where an employer does not have a significant history of non-compliance. Crown Audits can be used when the employer is not willfully or flagrantly disregarding provincial standards. The employer must be notified that a Crown Audit will be conducted. Fees are established in the Regulation and will be charged to the employer. See Section 59(1) of the Regulation.

    3. Third-Party Audit
      When an employer has general payroll deficiencies, a past history of non-compliance, or there are a significant number of affected employees, the employer will be audited by an external or ‘third party’ organization. Upon notice from the Director (or designate), the fees charged by the auditing company and any costs associated with the audit will be recovered from the employer. See Section 72 of the Code and Section 59(2) of the Regulation.

    In all situations where an employer fails to pay earnings to employees that are have been assessed during an audit, an officer will issue an Order of Officer directing the employer to pay the earnings, plus any fees or costs. See Section 91 of the Code.

  5. Notice of Inspection Findings Posted

    Upon the completion of any inspection, the employer will be directed to post the results at the worksite and/or communicate the results to the affected employees. Officer instructions, including any directions and/or consequences, will also be included in the posting.

  6. Director’s Demand

    When an officer has reason to believe an employer has failed to pay or will fail to pay earnings, a demand can be issued to any person or organization that owes money to the employer. Officers will use this tool when an employer fails to respond to previous orders, or to secure assets that may otherwise become unavailable. These demands, when issued prior to a Court of Queen’s Bench Judgment, can be appealed. In the absence of an appeal, the collected funds can be disbursed to the employee(s). See Section 115 of the Code.

  7. Order of Officer

    If an employer fails to pay earnings to an employee or group of employees, whether identified through an investigation or inspection, Orders of Officer are issued to the employer. The order includes fees payable to the government and can be appealed. See Section 87 of the Code.

    Officers will identify whether a single employer or group of employers are responsible for the unpaid earnings. See Section 80 of the Code.

  8. Director’s Order for Compensation/Reinstatement

    Certain violations, such as improper termination of an employee, may only be dealt with by the Director of Employment Standards. In these matters, the Director will issue orders to pay or reinstate the employee. See Sections 86 and 89 of the Code.

  9. Court of Queen’s Bench Judgment

    Either an Order of Officer or Director can be filed with the Court of Queen’s Bench as an official judgment. It therefore becomes enforceable with that court. These judgments are referred to a collection agency if necessary. Note - judgments that are the result of enforcement agreements with other provinces are also referred to collection agencies. Additional costs associated with collections can be charged to the employer. See Section 110 of the Code.

  10. Director Certificate (for Unpaid Wages)

    Corporate directors are personally liable for unpaid wages once it has been determined that the corporation itself is unable to pay earnings. These Director Certificates can be appealed, or they will be filed with the Court of Queen’s Bench as judgments. See Section 112 of the Code.

  11. Prosecution

    Prosecution through the Alberta courts is the final step to be taken when all other enforcement tools have been exhausted. Once a prosecution has commenced, Alberta Justice takes control of the matter and determines how to proceed with prosecution in accordance with its guidelines.

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Created:
Modified: 2011-08-16
PID: 13604

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