Interpretation Guidelines Manual British Columbia Employment Standards Act and Regulations

EMPLOYMENT STANDARDS REGULATION - PART 6 - INTEREST AND PENALTIES

ESR Section 29 – Administrative penalties


Contents:

Summary
Text of Legislation
Policy Interpretation
Related Information


Summary

Section 98(1) of the Act provides that if the director issues a determination against a person under section 79, that person is subject to a monetary penalty. This section sets out how the Director will calculate the amount of any monetary penalty which will be included in a determination issued under section 79. 


Text of Legislation

29 (1) Subject to section 81 of the Act and any right of appeal under Part 13 of the Act, the following monetary penalties are prescribed for the purposes of section 98 (1) of the Act:

(a) a fine of $500 if the director determines that a person has contravened a requirement under the Act, unless paragraph (b) or (c) applies;

(b) a fine of $2 500 if

(i) after the date of a determination under paragraph (a), the director determines that the person contravened the requirement referred to in that paragraph subsequent to the determination under paragraph (a), and

(ii) that subsequent contravention occurs within 3 years after the date of the most recent contravention of the same requirement in relation to which there has been a determination under paragraph (a),

unless paragraph (c) applies;

(c) a fine of $10 000 if

(i) after the date of a determination under paragraph (b), the director determines that the person contravened the requirement referred to in that paragraph subsequent to the determination under paragraph (b), and

(ii) that subsequent contravention occurs within 3 years after the date of the most recent contravention of the same requirement in relation to which there has been a determination under paragraph (b).

(1.1) For the purposes of subsection (1), an act or omission of an employer constituting a contravention of a requirement under the Act is deemed to be a single contravention regardless of the number of employees affected by the contravention.

(2) The penalties imposed under subsection (1) apply to the person only in respect of the location where the contravention occurred.

(3) Despite subsection (2), if an employer dispatches an employee from one location to another worksite, a contravention that occurs at that other worksite is considered to be, for the purposes of subsection (1), a contravention at the location from which the employee was dispatched.

(4) If an administrative penalty is imposed on a person, a prosecution under the Act or this regulation for the same contravention may not be brought against the person

(5) A person who is subject to an administrative penalty under this section must pay the amount to the minister charged with the administration of the Financial Administration Act.

(6) Subsections (1) to (5) apply only in respect of contraventions that occur on or after November 30, 2002.

(7) In subsection (8), “former provisions” is a reference to sections 28 and 29 and Appendix 2 of this regulation, as those provisions read immediately before November 30, 2002.

(8) The former provisions apply, despite their repeal, for purposes of contraventions of the Act and this regulation that occurred before November 30, 2002.


Policy Interpretation

Section 81 of the Act requires the director to serve any person named in a determination with a copy of the determination, which must include the amounts of any wages and penalties owing and how those amounts were calculated.

Determinations issued under sections of the Act other than section 79 are not subject to penalties. An example would be a variance issued under section 73.

Subsection (1)

Subject to the requirements of section 81 and subject to any right of appeal under Part 13 of the Act, where the director issues a determination under section 79, a monetary penalty will be imposed, as follows:
a. $500.00, unless paragraph (b) or (c) applies,
b. $2,500.00 if a contravention of the same requirement occurs

  • after the date of the first contravention under paragraph (a), and
  • after the date of the determination relating to the first contravention under paragraph (a), but
  • within 3 years after the date of the first contravention,

c. $10,000.00 if a contravention of the same requirement occurs

  • after the date of the contravention under paragraph (b), and
  • after the date of the determination relating to the contravention under paragraph (b), but
  • within 3 years after the date of the contravention under paragraph (b).

The method of calculating a penalty under paragraph (c) remains the same regardless of how many contraventions with accompanying penalties have been assessed against an employer.

Example

QPR Ltd. continues to contravene the same requirement of the Act. This employer will be penalized as follows:

Contravention

Contravention date

Determination date

Penalty

1

Feb. 1/05

June 1/05

$500

2

July 1/05

Nov. 1/05

2,500

3

Feb. 1/06

May 1/06

10,000

4

Aug. 1/07

Oct. 1/07

10,000

5

Sept. 1/08

Dec. 1/08

500

The first contravention attracts a $500.00 penalty under paragraph (a). The second contravention attracts a $2,500.00 penalty under paragraph (b). The third and fourth contraventions attract a penalty of $10,000 under paragraph (c) because they occur after the date of the determination issued in respect of the second contravention and are still within three years of the date of the second contravention.

The fifth contravention would result in a penalty of $500 because it is not within three years of the date of the second contravention which resulted in the issuance of the $2,500 penalty under paragraph (b). For this reason it does not fulfill the requirements of paragraph (c). Although it is within three years of the most recent contravention, that is not a relevant criteria upon which to base the amount of the penalty.

Contravened Requirement

A "requirement under the Act" or a "contravention" refers to a requirement or a contravention of a requirement set out in a section of the Act or Regulation.

Section(s) of the legislation that have been contravened resulting in a penalty must be identified in the determination.

Automatically included violations

A penalty applies to a contravention of a requirement of the Act or Regulation. A penalty will not apply to a requirement that is contravened as a result of a finding of another contravention.

Example
An employer contravenes the Act and owes $100.00 in overtime wages. While the employer had paid annual vacation pay, it owes an additional 4% on the $100.00. The determination will contain a penalty for the failure to pay overtime wages. It will not contain a penalty for the failure to pay the additional vacation pay as it is owed solely as a result of the failure to pay overtime wages.

Records Penalties

If an employer fails to comply with a demand for records issued by the director, the employer contravenes section 46 of the Regulation and is subject to the mandatory penalty provisions.

This applies whether the employer produces partial records or no records at all.

An employer's failure to produce records as a result of a demand is not evidence that the employer has failed to keep records. It is a contravention of section 46 of the Regulation, but not necessarily of section 28 of the Act.

A contravention of section 28 of the Act concerning failure to keep records is applicable where there is evidence that no records were kept.

Subsection (1.1)

The amount of a penalty imposed on an employer for a contravention does not increase if more than one employee is affected by a contravention.

Example
If an employer fails to pay 3 employees statutory holiday pay and a determination is issued in respect of all 3 employees, one penalty will be imposed for a single contravention, the same as if a determination had been issued in respect of one employee.

Subsection (2)

Penalties under s.29(1) of the Employment Standards Regulation apply to contraventions occurring at the same worksite location. The worksite where the contravention occurs is the "location" for the purpose of imposing penalties.

Example

An employer with only one worksite is subject to a $500 penalty for an overtime contravention. After the date of the first contravention and the issuance of the first determination, and within 3 years of the first contravention, the employer moves to another location and a second determination is issued against the employer for an overtime contravention. The second determination will include a $500 penalty since this is the first overtime contravention at this worksite "location".

Subsection (3)

Escalating penalties under s.29(1) apply to contraventions occurring at the location from which an employee is dispatched to another worksite. In this case the contravention occurs "at the location from which the employee was dispatched".

Example

An employer dispatches employees from a home-based office to locations throughout the Okanagan Valley. Under s.29(3) the location of the home-based office would be the location of the employer for determining a penalty contravention. After the date of the first contravention and the issuance of the first determination, and within 3 years of the first contravention, a second determination is issued against the employer at the same location for the same contravention. The second determination will include a $2500 penalty since this is the second contravention at this worksite "location".

Subsection (4)

A person will not be subject to both an administrative penalty and a prosecution under the Act or Regulation for the same contravention.

Subsection (5)

When a determination is issued it clearly states the amount of all wages and penalties owing. The determination includes instructions to pay the full amount to the Director of Employment Standards. The penalty amount is forwarded by the director to the Ministry of Finance.

Subsection (6)

Subsections (1) to (5) of this section do not apply to any contraventions of the Act or Regulation that occurred before November 30, 2002.

Subsection (7) and (8)

For purposes of a contravention of the Act or Regulation that occurred before November 30, 2002, the former provisions of the Act apply, as they read immediately before November 30, 2002, despite the fact they were repealed on that date.

Former Section 28: Penalty for contravening a record requirement
Former Section 29: Penalties for other contraventions
Former Appendix 2: Specified Provisions For Penalty Purposes

Personal liability for corporate penalty

Refer to section 98(2) of the Act for information on how a person, including an employee, officer, director or agent may also be liable for a corporate penalty.


Related Information

Related sections of the Act or Regulation

ESA

ESR

Other:

Financial Administration Act, [RSBC 1996] Chapter 138