Back in November the government of the province of British Columbia announced that BC employers will now be required to offer their employees 5 paid sick days per year. The announcement came amid the global coronavirus pandemic. I suspect was intended to support individuals to stay home when sick rather than working while contagious. Working while contagious will obviously negatively impact the rest of the work force at your employment site. However, this new requirement backed by the employment standards act is going to have a significant financial impact on many; already struggling; businesses in British Columbia.

British Columbia is the first province to enforce 5 paid sick days for employees. Quebec has 2 paid sick days. Furthermore. no other provinces or territories have legislated paid sick days by private sector employers. Note; this benefit is separate and distinct from the provincial and federal temporary programs that various governments are offering in direct relation to Covid-19. This new measure is now part of legislation inferring it is a permanent change to the employment standards act. It also pertains to any sickness or illness, not just Covid-19.

Employers are required to offer this new benefit to both full time and part time employees who have been employed for 90 days prior to taking paid sick leave. Employers may ask for proof of sickness from the employee to support the employee’s request for a paid sick day.

One day last week was dubbed the great sick day given the mass volume of employees requiring a day off because they were ill. I have seen in more than one of my clients’ payroll records that an employee has already used up all 5 paid sick days and the program has only been in force for 15 days!

An example of the cost to a small business for 5 paid sick days per employee

Business #1 (a small construction company)

5 employees

Regular hourly pays of : $17.50, $17.50, $30, $31.50, $42.00 (this is equivalent to salaries of $36,400, $36,400, $62,400, $65,520, $87,360)

This business owner will see her payroll costs increase $5,540 per annum

Business #2 (a consulting firm)

10 employees

Regular hourly pays of : 2@ $22.00,  2@ $35,  4@ $60, $65, $80  (this is equivalent to salaries of 2@ $45,760,  2@ $72,800,  4@ $124,800, $135,200, and $166,400)

This business owner will see her payroll costs increase $20,960 per annum

 

It was only in January 2019 that the BC Provincial government rolled out the Employer Health Tax  which increased the cost of labour for BC employers. If you are a consumer in British Columbia keep in mind these increased costs to employers when you notice the price of items you are buying or services you are using increase. The Greater Vancouver Board of Trade estimated the program could cost between $506 million and $1.1 billion annually.

Employers, here are some helpful links as you roll out this change in your operations:

The Government of BC Paid Sick Leave page

The BC Employment Standards Act Part 6, Section 49.1; Illness of Injury Leave

The Government of BC Taking Time Off

Having a Canadian Finance Gal controller as part of your team, ensures that a new employment regulation like this is rolled out properly and budgeted for.

How a small business can minimize the negative impact of the paid sick days requirement

It doesn’t have to be all doom and gloom, this new standard should reignite your vision on offering a healthy workplace for you and your employees. Creating workplaces where your staff want to come to work is mutually beneficial. Some ideas to foster such an environment are:

• Create a psychologically healthy and safe workplace
• Ensure overtime requirements are not excessive that might continually compromise your staff’s need for rest and sleep
• Support a contributory by all workplace culture. (People WANT to be a place where they feel valued)
• Honour and recognize honesty so employees are not tempted to take a paid sick day when they are not really sick.

 

In conclusion, British Columbian small businesses have proven to be resilient amongst economic changes. We are getting really good at adapting. The key is to plan and prepare in advance as best possible. I always like to position my clients to be proactive rather than reactive.

May you be empowered;

 

Shanalisa Keller is a CPA, CGA and Coactive Trained Coach who founded and leads the team at Canadian Finance Gal. She has a desire to make personal and business finances less daunting and confusing. ⁣⁣She loves accounting and tax and wears the respective geek label with pride. When Shanalisa is not counting beans you can find her mixing a fun new cocktail or building a tasty charcuterie board.⁣⁣ You can read her other blogs on various small business topics here,  book a chat or coffee or wine with her here, or you can find her on LinkedIn (her favourite social platform).