Payment of earnings | fact sheet

Payment of earnings | fact sheet

Employers must follow legislated rules for paying employees and providing pay statements.

Check back for updates – new employment standards will come into effect on January 1, 2018. Read about the changes.

Basic rules

Employers must pay their employees at least once a month, or use one of the following pay periods listed below:

  • daily
  • weekly
  • bi-weekly
  • semi-monthly

Employers must also:

  • provide employees with a statement of earnings for each pay period
  • keep employment records for 3 years
  • pay employees within 10 consecutive days after the end of the pay period, unless employment is terminated

How earnings are paid

  • employers are encouraged to pay employees at the work place
  • employees must be paid in Canadian currency
  • employees may be paid by cash, cheque or similar document, drawn on an insured financial institution such as a chartered bank or credit union
  • employees may be paid by direct deposit into an account of their choice, in any recognized financial institution
  • employers must pay employees within 10 consecutive days from the end of the pay period, unless employment is terminated. An employee isn’t considered paid until they’ve received the funds.

More details

Show Answer Termination of employment

When employment is terminated, employees must be paid their earnings as follows:

Within 3 days after the last day of employment, if:

  • an employee provides the required amount of written notice of termination and the employee works to the end of their notice period,
  • an employer provides the required amount of written notice of termination, and the employee works to the end of their notice period,
  • an employer provides a combination of the required amount of written notice and pay in lieu of notice, and the employee works to the end of the notice period
  • an employer chooses to pay termination pay in lieu of the required amount of written notice

Within 10 days after the last day of employment, if:

  • an employer or employee is not required by the Code to give notice of termination

Within 17 or 24 days after the last day of employment, if:

  • an employee fails to give the required amount of written notice of termination; the employer must pay the employee’s earnings not later than 10 consecutive days after the date on which the notice would have expired if it had been given

For more on this topic: Termination of employment

Show Answer Pay statements

At the end of each pay period, an employer must provide an employee with a statement of earnings showing all of the following:

  • statement period
  • regular and overtime hours of work
  • wage rate and overtime rate
  • earnings paid, listing items separately (e.g. wages, overtime, general holiday pay and vacation pay),
  • deductions from earnings and the reason for each deduction
  • hours taken off in lieu of overtime

Employers may provide electronic statements if employees can view and print them.

Privacy legislation may require an employer to maintain the confidentiality of the employee’s payroll information.

Show Answer Deductions from earnings

The Code allows certain legal deductions to be made from an employee’s earnings. The amount of each deduction, and the reason for the deduction, must be listed on the employee’s pay statement.

Employers can only take deductions from an employee’s earnings if the deduction is:

  • required by law, such as federal and provincial tax, contributions to the Canada Pension Plan, Employment Insurance premiums, or a garnishee of the court,
  • authorized by a collective agreement (e.g. union agreements), or
  • authorized in writing by the employee.

When they start their job, employees can agree in writing to deductions for:

  • company pension plans
  • dental plans
  • social funds
  • registered retirement savings plans

Deductions for meals, lodging and uniforms

Meals and lodging

Employers can, with written authorization from the employee, reduce the employee’s wages below the minimum wage by a maximum of:

  • $4.41 for each day the employer provides the employee with lodging
  • $3.35 for each meal consumed by the employee; deductions can’t be made for meals not consumed

Uniforms

Employers can, with written authorization from the employee, deduct money from an employee's wages for supplying or cleaning the employee's uniforms and work clothing if:

  • the deduction doesn’t reduce the employee's wages below the minimum wage, and
  • the employer doesn’t deduct more than the actual cost of the clothing.

Deductions that aren’t allowed

Deductions an employer is not allowed to make, even if the employee authorizes the deduction in writing, include those for:

Faulty workmanship

Faulty workmanship is a failure by an employee to adequately perform their duties because of an accident, unforeseen circumstance, carelessness or incompetence.

Examples of faulty workmanship include accidental damage to an employer’s vehicle or equipment, “walkouts” in a bar, breakage in a restaurant, and mistakes in production.

Cash shortages or loss of property

Deductions for cash shortages or loss of property can’t be taken from the employee’s earnings if other persons have access to the cash or property. This includes access by the employer or their representative, other employees, or customers.

In cases where cash is involved, the employee must be allowed to count their float, account for their sales, and finalize their accounting of the cash. Unless these conditions are met and the employee provides written authorization, the employer can’t make deductions for cash shortages or loss of property.

Show Answer Reducing an employee’s earning

An employer must notify the employee before the start of the pay period in which the reduction takes effect, if they intend to reduce an employee's:

  • wage rate
  • overtime rate
  • general holiday pay
  • vacation pay
  • termination pay

However, these rates must always be at least the minimum required by the legislated standards.

How the law applies

Part 2, Divisions 1 and 2 of the Employment Standards Code (Code) set out the rules for the payment of earnings to employees, as well as employment records that employers must provide to their employees. Earnings include wages, overtime pay, vacation pay, general holiday pay and termination pay.

Sections 12 and 13 of the Code limit the deductions that employers are allowed to make on an employee’s pay.

Disclaimer: In the event of any discrepancy between this information and Alberta Employment Standards legislation, the legislation is considered correct.

Created:
Modified: 2017-07-14
PID: 997

Contact Employment Standards

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  • 780-427-3731 (Edmonton)
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