Everyone loves a holiday and their family, so it’s hard for employers to complain about the introduction of the new “Family Day” in February coming to B.C. starting in 2013. However, this new statutory holiday will impose a significant new overhead cost to employers and may raise concerns about “equal treatment” of employees in other provinces unless employers take proactive steps to manage these impacts.
Costs
For most employees who do not work on the statutory holiday (“stat”), Family Day is another day on which an employee must receive pay for no work. Although there are 52 weeks in the year, once three weeks for typical vacation entitlement and two weeks for the existing standard 10 statutory holidays are deducted, that leaves 47 working weeks or 235 working days. Deducting Family Day imposes a further 4.2% reduction in that number of working days worked with no corresponding reduction in payroll costs. Assuming that an average B.C. worker is earning $50,000 per annum and has benefits costing approximately 10% of base pay, the direct cost to the employer of the new stat for that average worker is approximately $211.
For the minority of employees who are required to work on a statutory holiday like Family Day, the cost to the employer is even higher. Under the BC Employment Standards Act (ESA), those employees must receive not only regular statutory holiday pay but 1.5 times their regular rate for all hours worked on the statutory holiday, with few exemptions.
For once, unionized employers may have a brief advantage. If they are party to a collective agreement with provisions governing statutory holidays, then those provisions govern, and the planned amendment to the ESA to add Family Day does not override them. However, those employers can expect to face union pressure in 2013 and in their next round of bargaining for recognition of Family Day in the collective agreement.
The multi-provincial employer fairness issue
As multi-provincial employers know, each Canadian province has its own list of statutory holidays. All share a core set of stats (New Year’s Day, Good Friday, Canada Day, Labour Day, Thanksgiving and Christmas), but each province (as well as the territories and federal government) rounds out its roster of legally mandated statutory holidays with a mixed bag of other holidays. Until B.C. joined Alberta, Manitoba, Ontario, P.E.I. and Saskatchewan in recognizing Family Day, all of the provinces and territories had approximately nine legally mandated statutory holidays.
In practice, most employers also voluntarily recognize one additional statutory holiday, for a total of 10 stats.
With the introduction of Family Day, B.C. becomes the first Canadian jurisdiction to have 10 legally mandated statutory holidays. If Boxing Day continues to be voluntarily recognized by B.C. employers as a statutory holiday, B.C. employees will have 11 statutory holidays, more than is either legally mandated or observed in practice in the other provinces. This raises concerns about equal treatment for multi-provincial employers.Employers need to be planning and budgeting now for the impact of the introduction of B.C. Family Day in 2013. Some of the options for mitigating the added costs and the interprovincial inequity of adding Family Day, along with the pros and cons of each include:
Just add Family Day to the traditional 10 B.C. statutory holidays: This is obviously the most popular solution with employees. However, it has the significant direct cost impacts in B.C. outlined above and, for multi-provincial employers, imposes indirect morale costs by either upsetting co-workers in other provinces stuck with the traditional average of 10 holidays or forcing the employer to offer an additional voluntary holiday to them to be fair.
Eliminate the Boxing Day voluntary statutory holiday: This is the “Scrooge” option. Because Boxing Day is not a legally mandated statutory holiday in British Columbia, all employers have the right to decide to eliminate it in 2013 when Family Day becomes a statutory holiday. This option is likely to be highly unpopular both with employees and with the retailers who count on their business on Boxing Day. It would also make B.C. employees work when most other Canadian businesses are closed and might result in low productivity. Employers could allow employees to use a vacation day to cover Boxing Day pay.
Cease paying statutory holiday pay for Boxing Day: This counterbalances the cost of adding Family Day and ensures equal statutory holiday pay among employees in various provinces.
For employers offering Easter Monday, eliminate Easter Monday as a voluntary statutory holiday: B.C. employers voluntarily recognizing Easter Monday could consider removing it from the list of voluntarily recognized statutory holidays as a trade-off for the introduction of Family Day. Because many other B.C. and national employers do not recognize Easter Monday, this might be an easier pill to swallow, particularly as Good Friday remains a stat so employees still enjoy a three-day Easter weekend.
Agree with employees to substitute another day off for one of the legally mandated statutory holidays: Under section 48 of the B.C. ESA, an employer can agree with individual employees or with a group by majority decision to substitute another day off for any legally mandated statutory holiday. While this could be done with any of the statutory holidays, the most practical option to keep the number of stats to 10 would be to seek employees’ agreement to take Boxing Day in lieu of Remembrance Day. Under this option, even when Family Day is added, the total number of paid statutory holidays would remain at 10, consistent with other provinces. Because Remembrance Day is not observed in some provinces, including Ontario, this might be attractive to multi-provincial employers, particularly those looking to minimize the number of days when only part of their national workforce is on holiday.
Employers need to find out now how other B.C. employers are going to adapt to Family Day, consult with employees and come up with a workable solution to the new statutory holiday’s costs and equity issues.
Employers might find that after communicating the cost and fairness concerns and possible options to mitigate them, employees will help find the best solution with the least impact on morale. •
