Tax Implications in Employment Law Settlements

Posted on by Ben Tarnow Posted in Termination, Wrongful Dismissal, Wrongful Termination, Employee TerminationTagged ,

As with most areas of law, the vast majority of disputes between employers and employees are often resolved through negotiated settlements, whether via direct negotiations or mediation, without the need for a trial. Unlike settlements with respect to other areas of law, such as personal injury claims, or denied life insurance claims, when an employment law claim is settled there are tax implications that need to be considered by all parties involved.

Tax Treatment of Settlement Payments

When an employee receives a payment as a result of the settlement of an employment law dispute, the tax implications can vary depending on the nature of the settlement. The general rule of thumb is that if a payment is intended to replace income, or if it is contemplated in the employment agreement, then it is likely taxable. The Canada Revenue Agency (CRA) usually treats settlement payments as follows:

  • Termination and Severance Pay
… Continue reading

Employee Layoffs at Canada’s Big Banks

Posted on by Graham Taylor Posted in Employee Termination, Employment Contracts, Human RightsTagged ,

Employee layoffs, particularly within the context of Canada’s big banks, raise important considerations for both employers and employees. In the wake of a multitude of economic challenges, rising interest rates, and global events such as the COVID-19 pandemic, the banking industry has implemented significant workforce restructuring. In light of the recent announcement from Toronto Dominion (TD) and the Canadian Imperial Bank of Commerce (CIBC), which followed similar announcements from the Royal Bank of Canada (RBC) and Scotiabank Canada, of mass layoffs in light of bad loans and post quarterly results, many Canadians stand to lose their jobs.

Legal Requirements for Employee Layoffs at Big Banks

When it comes to employee layoffs at Canada’s big banks, it is important for employers to comply with the Canada Labor Code and any industry-specific regulations that may apply. The banking industry is subject to oversight by regulatory bodies such as the Office of the … Continue reading

What Does British Columbia’s New Pay Transparency Act Do?

Posted on by Kevin Blair Posted in Employment Contracts, Gender EqualityTagged , ,

With a view to promote gender equality and pay equity in the workplace, the province of British Columbia passed the Pay Transparency Act on May 11, 2023, and will come into effect on November 1, 2023. This act is designed to provide greater transparency regarding employee compensation and the gender pay gap by placing new requirements on employers. The act applies to all employers in the province of British Columbia, regardless of size or business sector.

Key Details of the Pay Transparency Act

There are 4 main areas where the act creates changes: pay transparency and pay history, job postings, prohibiting retaliation, and pay transparency reporting.

Pay Transparency & Pay History

The Pay Transparency Act gives employees the right to request information about compensation in their workplace. Once an employer receives a request regarding compensation in the workplace, employers are required to provide the requested information within a reasonable timeframe. … Continue reading

How Do You Know If Your Severance Package Is Fair?

Posted on by David Goldberg Posted in Employment Contracts, Severance Entitlements, Employment Agreements

When the time comes to part ways with your employer due to no fault of your own, you will be entitled to severance, an amount of money to make you whole due to the loss of your employment.  Severance is governed by employment contract, the common law and statute, with facts such as your age, position held, length of service, reason for the termination factor into the equation. Depending on the type of position you held and in what industry it can be a complicated question determining entitlement.

This leads to the obvious question: how can I tell if my severance fair?

Is My Severance Package Fair?

So how do you know if you’re being offered fair severance? The starting point for this, as with almost everything in employees law, is the employment agreement.

Is there a written employment agreement? If so is it enforceable? If there … Continue reading

Overtime Pay – Who Gets It & When?

Posted on by Ben Tarnow Posted in Overtime, Employment Agreements

With skyrocketing inflation and costs of living, overtime pay can be a great way for employees to earn extra money.  However, outside of governmental and unionized work environments most employers are not enthused to have to pay more into wages with overhead already being high.

At the end of the day entitlement has less to do with an employee or employees wants as it does a function of hours worked, employee duties and obligations, and the law regarding overtime pay in British Columbia.

Hourly vs. Salaried Workers

For employees paid by the hour the overtime pay structure is mandated by provincial legislation.  Hourly employees are paid 1.5 times their hourly rate for any time worked over 8 hours a day up to 12 hours. Any time worker over 12 hours attracts 2 times their hourly rate.  While employees can contract into further entitlements, this is the base entitlement to overtime … Continue reading