Your finally big enough to need help – what should you consider before for hiring your first employee?
This is directed to business owners in Alberta but should work with slight modifications for all of Canada.
Before you hire someone you need to get a contract with them before they start to make sure that you are legally covered. This means it needs to be signed and dated before the first day they walk in. If it is signed after the employee starts it is not looked at the same way under the law as if it is signed before they start.
- We can help you get a contract but you may want to get a laywer to look at it or generate it to make sure you are covered.
- Make sure it clearly states that employee is only entitled to the minimum standards per current Alberta labour standards otherwise if an employee ever takes it to court – the court can give them a large settlement.
- Before you can pay them you need the TD1 and TD1AB filled out
- We can get these for you or you can look them up online.
- You need to get WCB coverage, Make sure you cover yourself for the minimum so that you have legal coverage in case of injury. Decide if you wan to cover volunteers. We can help you sign up – you will need a credit card and it is online.
- Many construction contracts will not hire you without a WCB clearance – once you have employees they can not cover you- you must cover your employees.
- There are a few industries that are not required to have WCB but you can get it optionally. We can help you figure out if you are in these industries – but coverage is cheap legal coverage for you from employees and should be considered.
What is your payroll schedule going to look like?
- Cut off must be at least 5 business days – so if you are paying on the last day of the month then you need a cut off of the 25th. If bi weekly lots of companies cut off on Friday and pay the next Friday.
- ATB adds an extra day to bank process times – if you are banking with ATB an extra day will need to be added so Thursday cut off for following Friday because I need to submit payroll to apps usually by 9 am on Friday for the next Friday pay.
- Do NOT pay on the cut off date – this ends up being a lot of estimation and you could end up overpaying employees if they quit before pay day. Save yourself greif and give yourself enough time to get payroll calculated.
How would you like to pay?
- We can set you up with an app that has an employee portal, direct deposits and sends the T4s- there are several out there – we do not recommend at this time using QuickBooks online payroll unless you have very simple payroll needs.
- Or we can calculate manually and send you the paystubs and you can pay by eft or through your bank.
- Note Paystubs should not be sent through email – it is not secure enough for the personal information.
Wage rules (check Alberta Standards as these change from time to time)
- Minimum wage for adults is $15/hour
- If you ever call in an employee you need to pay at least 3 hours even if you if you cancel after they arrive.
- Employees must be paid for meetings and trainings
- Anything under 5 hours does not require breaks paid or unpaid
- Employees who work over 5 and less than 10 need to have 2 paid or unpaid breaks in the 6 hours which can be taken as a 30 minute break.
- Note you can choose to add extra breaks – just be aware that removing them later will be an issue. IE 2 – 15 min breaks paid and a lunch half hour unpaid.
- Any employee who works over 8 hours is entitled to Overtime.
- No employee can ever work more than 12 hours (start to end time inclusive of breaks)
- Any employee who works over 44 hours a week is entitled to overtime
- You are not allowed to deduct from employees earnings for uniforms, cash shortages, breakage…
- Vacation can either be paid out every check or accrued and paid out when taken – minimum is 2 weeks (4%)
- If it is paid out on each cheque make sure it is in your contract and explained to them that when they are on vacation they will not be paid – but they will still need to take vacation (could be when your off over Christmas…) Some employees do not understand paid out vacation.
- With the current regulations (though they keep changing every government change) you do not need to pay stat if the employee does not normally work that day – so most employers that have part time people try to avoid Monday employees because most stats are on Mondays. It is not a huge deal but just so you are aware.
- You will also need to decide if your stats are only the legal ones – or if you are adding Boxing day, Heritage day and Easter Monday – these can be closed days that are not stats. If you pay one of them once then you will end up then you will need to keep paying them or there will need to be a new agreement with employees signed.
- Make sure that this is detailed in your contract
- If you are taking a company wide closed days (between Chirstmas and New Years is common) make sure it is in your contract and detail what employee will and will not be paid for. IE we are closed from noon Christmas eve to January second every year – employees will be paid for
- Half of Chirstmas Eve if they work the first half of the day
- Christmas day and New years day stat
- All other days can be taken as vacation if there is enough in the vacation accural or will be time off without pay
- If you get 5 workers – I think volunteers count too – you will need to set up a Health and safety representative – chosen by employees.
- Over 20 then you need a Health and safety commitee – with representatives from employees and management
Overall, hiring your first employee is an exciting and complicated time – decisions you make will be harder to change once the employees are hired – not impossible but they take longer then you think they should. Most importaint is to make your decisions and write up a contract BEFORE you hire your first employee. Make sure all employees sign BEFORE thier first day.
If you have any questions contact us