Payment of Wages
Employers must establish a regular pay period and a regular payday for
An employer has to pay all the wages earned in each pay period, other than
vacation pay that is accruing, no later than the employee's regular payday
for the period.
Some employees earn commissions or "bonuses" based on sales made in a pay
period. In these situations, the employment contract or the practice of
the employer often provide that the commission or bonus is not "due and
owing" or "earned" until some future event has occurred. For example, this
could be when goods or services have been delivered to the customer and
full payment has been received. In such cases, the commission or bonus is
not "earned" in the pay period in which the sales are actually made.
Instead, in accordance with the employer's accepted or agreed-on practice,
it is "earned" and paid at a later date.
There are special
rules about when employees must be paid their vacation pay. Refer to the When
to Pay Vacation Pay chapter for more
How Wages and Vacation Pay Are Paid
An employer may pay wages, including vacation pay, by:
direct deposit into the employee's account at a bank or other
If payment is by cash or cheque, the employee
must be paid the wages at the workplace or at some other place agreed to in
writing by the employee.
If the wages are paid by direct deposit, the
employee's account must be in his or her name. Nobody other than the
employee can have access to the account unless the employee has authorized
it. The branch or facility of the employee's financial institution must be
within a reasonable distance from where the employee usually works, unless
the employee agrees otherwise in
When Employment Ends
If an employee stops
working, the employer must pay his or her outstanding wages, including
vacation pay (plus any payments due to the employee because the employment
has ended--see Termination
of Employment and Severance
no later than seven days after the
on what would ordinarily have been the employee's next regular pay
whichever is later.
On or before an employee's payday, the employer must provide the employee
with a wage statement that sets out:
the pay period for which the wages are being paid;
the wage rate, if there is one;
the gross amount of wages and--unless the
employee is given the information in some other manner (such as in an
employment contract)--how the gross wages were calculated;
the amount and purpose of each deduction;
any amounts that were paid in respect of room or board;
the net amount of wages.
The wage statement must be:
provided by e-mail if the employee has access to some means of making
a paper copy.
The employee must be able to keep this information separate from his or
Vacation Pay Statements
Employees may request (in writing) a statement containing the information
in the employer's vacation records. The employer is required to provide
the information no later than:
seven days after the request,
the first pay day after the employee makes the request,
whichever is later, but subject to the following:
If the employee asks for information
concerning the current stub period or vacation entitlement year, the
employer is required to provide the information no later than:
seven days after the stub period or
vacation entitlement year ends,
the first pay day after the stub period or vacation entitlement
year ends, whichever is later.
The employer is required to provide the information with respect to each
stub year or vacation entitlement year only once.
If the employee has agreed that vacation pay
will be paid on each pay cheque as it is earned, the employer does not
need to keep records and provide statements about vacation pay as
discussed above. Instead, the employer must report the vacation
pay that is being paid separately from
the amount of other wages on each wage statement, or provide a separate
statement setting out the vacation pay that is being paid. The employer
must also keep a record of that information.
Deductions from Wages and Vacation Pay
Only three kinds of deductions can be made from an employee's wages or
1. Statutory Deductions
Federal and provincial statutes sometimes
require an employer to withhold or make deductions from an employee's
wages. For example, employers are required to make deductions for income
Pension Plan contributions.
An employer is not permitted to deduct more than the applicable statute
allows and cannot make deductions if the money is not remitted to the
2. Court Orders
A court order may say that an employee owes money either to the employer
or to someone else other than his or her employer, and that the employer
can make a deduction from the employee's wages.
If a court determines that an employee owes the employer money, the court
order does not have to specifically allow the employer to deduct the debt
from the employee's wages. The employer can make the deduction.
However, suppose an employee owes money to someone else other than his or
her employer. In this case, a court order may direct an employer to make a
deduction from an employee's wages and send the money to a third party.
The employer is not allowed to make this deduction if the money is not
properly sent on to the third party.
Act also limits how much the employer is
allowed to deduct at any one time.
3. Written Authorization
An employer may also deduct money from an
employee's wages if the employee has signed a written
statement authorizing the deduction. This
is called a "written authorization."
An employee's written authorization must state that a deduction from wages
is allowed. The authorization must also:
specify the amount of money to be deducted;
provide a method of calculating the specific amount of money to be
An employee's verbal authorization or a general statement ("blanket
authorization") that an employee owes money to the employer under certain
circumstances is not sufficient to allow a deduction from wages.
Even with a signed authorization, an employer cannot make
a deduction from wages if:
the purpose is to cover a loss due to
"faulty work." For example, "faulty work" could be a mistake in a
credit card transaction, work that is spoiled or rejected, or a
situation where tools are broken or company vehicles damaged;
the employer has a cash shortage or has had
property lost or stolen when an employee did not have sole access and
total control over cash or property that is lost or stolen. A
deduction can only be made when the employee was the only
one to have access to the cash or
property, and has provided a written authorization to the employer to
make the deduction.