Interpretation Guidelines Manual British Columbia Employment Standards Act and Regulations

EMPLOYMENT STANDARDS ACT - PART 11 - ENFORCEMENT

ESA Section 99 – If money is paid to director


Contents:

Summary
Text of Legislation
Policy Interpretation
Related Information


Summary

This section explains the priorities and timing by which wages and other money are dispersed after they are paid to the director. 


Text of Legislation

99. (1) Subject to section 78 (2), the director must pay to the minister charged with the administration of the Financial Administration Act all money received by the director under this Act, including money to be held in trust for the persons named in a determination, a settlement agreement or an order of the tribunal.

(2) Money received by the minister charged with the administration of the Financial Administration Act in respect of a determination, a settlement agreement or an order of the tribunal must be attributed

(a) first, to any wages required to be paid by the determination, settlement agreement or order,

(b) second, to any other amount, other than interest or penalties, required to be paid by the determination, settlement agreement or order,

(c) third, to interest required to be paid by the determination, settlement agreement or order, and

(d) last, to any penalties required to be paid by the determination or order.

(3) The minister charged with the administration of the Financial Administration Act must pay, according to the direction of the director, to the persons named in a determination, a settlement agreement or an order of the tribunal, money received in trust for those persons.

(4) Money attributed to wages under subsection (2) must be attributed proportionally among the employees or former employees named in the determination, settlement agreement or order according to the amount owing as shown on the determination, settlement agreement or order.

(5) The money attributed to an employee under subsection (4) must then be paid according to the following priority:

(a) to a person who is a holder for value of an uncashed cheque or money order for the employee's wages;

(b) to a person the employee assigned the wages to;

(c) to the employee or, if deceased,

(i) to the employee's estate, or
(ii) under the Estate Administration Act;

(d) to a fund, insurer or other person to whom payment is to be made under section 26.

(6) If there is not enough money to pay everyone entitled under a paragraph in subsection (5), the money available under that paragraph must be divided among them in proportion to the amount each of them is entitled to.

(7) Subsections (4) to (6) apply also to interest required to be paid on wages by a determination, a settlement agreement or an order of the tribunal.

(8) Despite subsections (5) and (7), if money is received for wages or interest owing to an employee who owes money under another determination or settlement agreement or under an order of the tribunal, the director may direct that the amount received be used to pay the claims of anyone entitled to payment under the other determination or settlement agreement or under the order.


Policy Interpretation

All amounts paid to the director, including wages, other amounts required to be paid, interest and penalties, are paid in accordance with the priorities set out in this section. All amounts paid to or collected by the director are held in trust until all appeal deadlines are expired or appeals are resolved, unless the parties waive their right to appeal and the employer authorizes the distribution in writing

Subsection (1)

When money is collected and paid to the director, the director must pay the money to the Minister of Finance. All money collected is held in trust for the person who is owed wages under a determination or order of the tribunal. The only exception is when money collected as a result of a settlement or voluntary compliance has been paid directly to the employee.

Subsection (2)

There are priorities for disbursement of money collected from a determination of the director or an order of the tribunal. Priorities are as follows:

  • 1st – wages required to be paid;
  • 2nd – other amounts required to be paid, except interest or penalties;
  • 3rd – interest;
  • 4th – penalties.

Example

A determination indicates that the total amount owing is $1,350. This includes $750 in wages, $50 in unremitted deductions for medical insurance, $50 in interest, and a $500 penalty. The amount collected is $925. It would be paid out in this order:

$800 for wages ($750 + $50 unremitted deduction);
$50 for interest;
$75 for the penalty.

Subsection (3)

The trust account is under the control of the director. The Minister of Finance, acting on the director’s instructions, must pay money collected under this Act to the person owed under the determination or order.

Subsection (4)

Money collected under the Act must be pro-rated amongst the employees to whom it was owed, as per the determination or order.

Subsection (5)

Priorities for an employee’s share of the payout are as follows:

  • 1st – to a third party who holds an NSF cheque for an employee ’s wages;
  • 2nd – to a third party that the employee has assigned wages to;
  • 3rd – to the employee named on the determination or order. (If the employee is deceased, then to the employee’s estate, or as required under the Estate Administration Act);
  • 4th – to a fund, insurer, or other person that the employer had agreed to pay premiums to for the benefit of the employee.

Subsection (6)

If there are not enough funds to be paid to everyone who is owed money in a category under subsection (5), then the money collected is divided in proportion to each person’s entitlement in that category.

Subsection (7)

Interest collected on a determination is distributed proportionately amongst all the individuals in the determination and is distributed in the same manner as outlined in subsection (5).

Subsection (8)

This applies to employees who have filed a complaint with the Employment Standards Branch who used to be employers themselves and who have been found by the director to owe wages. The director may apply money, collected under the Act on behalf of an employee, to a debt that person may have as a former employer.

Example

Joe Smith used to be the owner and operator of Day Shoes, and owes wages to his former employees under a determination. Joe is now an employee of another business, Feet Plus. Joe files a complaint against Feet Plus, which results in a determination to pay Joe an amount of money. When Feet Plus pays the money to the director, it is distributed to Joe’s former employees at Day Shoes.


Related Information

Related sections of the Act or Regulation

ESA

ESR

Other

Estate Administration Act

Financial Administration Act