Payments by Employer to Funds, Insurers or Others - Act Part 3, Section 26
This section specifies that an employer must pay money on an employee’s behalf in accordance with terms of their employment contract.
26. An employer who agrees under an employment contract to pay an amount on behalf of an employee to a fund, insurer or other person must pay the amount in accordance with the contract.
An employer must honor all terms of an employment contract including any terms relating to amounts paid on the employee’s behalf. This may include, but is not restricted to, membership fees to clubs or associations, payments to insurers and benefit providers.
An employer is required to make any remittances on an employee’s behalf according to the terms of the employment contract. Any amount that is deducted but not remitted can be collected as outstanding wages under the Act. Although these amounts are collected as wages, the employer is not required to pay vacation pay on these amounts if the employer previously paid vacation pay. See also the definition of “wages” in section l.
An employment contract includes an employee membership at a fitness centre. The contract establishes that the membership will be at the employer’s cost and monthly fees will be remitted as long as the employee continues to be employed by the Company. Failure to make this monthly payment results in a contravention of this section of the Act and may result in a wage claim.
It should be noted that costs incurred by an employee as a result of the employer's failure to make a required payment are not wages for purposes of the Act and are not recoverable under the Act.
An employment contract includes provisions for dental coverage for an employee, at the employer’s cost. The cost of the coverage is $120.00/month. The employer makes monthly remittances to the dental insurer. The employer fails to make a remittance and the employee is not aware of the missed payment. The employee visits the dentist and has dental work done at a cost of $250.00.
The dental insurer does not cover the cost of the dental work due to the missed payment, therefore, the employee is required to pay the $250.00 to the dentist. Under this section of the Act, the employee can file a complaint for $120.00 in outstanding wages, however, the cost of the dental work is not recoverable under the Act.
Under s.27(f) of the Act, an employer is required to provide a wage statement that includes any money, allowance or other payment the employee is entitled to. This ensures that an employee can verify that the employer is honoring contract terms.
Employees covered by a collective agreement
Section 3 provides that parties to a collective agreement may not negotiate terms and conditions that do not meet or exceed the standards set out in section 24. Where there is a collective agreement, the enforcement of matters relating to section 24 is through the grievance procedure, not through the enforcement provisions of the Act.
Related sections of the Act or Regulation