Payroll Documentation Guidelines

Updated: Oct 6

As a business, it is important that you pay your employees both on time and accurately. It is also vitally important that you document the income of your employees and provide them with a summary of their earnings. Having the correct data to set up a new employee and keeping the correct information on file for easy retrieval is important. Your pay stubs must also provide the employee with specific information so they can understand how they are compensated. Adequate record keeping is key, please see the below points for clarification.

Documents you require for payroll and record keeping:

1. For the identification of your employee you will need the following documented:

  • Name

  • Address

  • Social insurance number

  • Job title

  • Age of employee if under 18

  • Sex to identify the employee

  • Start and end date of employment

2. You must keep the following information regarding how the employee is paid:

  • Rate of pay and frequency of pay (weekly, bi-weekly, semi-monthly, monthly, annually, or any other frequencies. If you have any other frequency you will have to give a clear explanation on why.

  • Changes to rate of pay with effective dates

3. You will need to keep actual detailed earnings of employees. These details include:

  • Amounts paid each pay day

  • Overtime

  • Vacation

  • Holiday pay

  • Bereavement leaves with pay

  • Termination pay, in lieu of notice, and severance pay

Each pay statement should include the following information:

  • Pay period covered for each payment

  • Number of hours during this period

  • Hourly rate/wage

  • Details of deductions

  • Net pay

4. Pay statement formats can be provided on paper or electronic. If you choose electronic pay statements, you as an employer will need to ensure the following:

  • Inform each employee where electronic pay statements are stored for access

  • It must be readable and printable only by the employee of the pay statement

  • Pay statements need to be accessible by the employee through electronic means for 3 years; from the first date the pay statement is accessible by the employee

  • Employee’s must be provided private access to a computer and a printer

5. To record working hours, you must show the daily hours worked. If hours of work are averaged, a 30-day notice must be posted, identify the periods of averaging, the start date of averaging, the applicable details of the reductions in hours, and overtime hours paid if applicable. In the event of a modified work schedule, schedules, copies of the notice, plus any votes and posting dates are required.


6. When your employee has been granted leave, you must record the start and end date of vacations, general holidays, bereavement leave, dates covered under maternity/parental/or maternity-related reassignment leave and any sickness or work-related illness or injury absences.


7. The document types or notices that must be kept on file:

  • The employer's pay periods

  • any agreements delaying or waiving vacation leave

  • Any general holiday substitution and related votes

  • notices that determine "year of employment" for vacation purposes; and notices for maternity/parental leave.

  • Termination documents, such as, a copy of the notice of termination

  • If a medical certificate has been requested for sick leave or maternity-related leave, retain a copy of the certificate(s)

  • In the event of work-related injury or illness cases, detailed reasons for the absence, expected return date or notifications/documents supporting that employee cannot return to work

Legislation

Section 24, of the Canada Labour Standards Regulations determines the records that are required to be kept on file in the event of an inspection.


Please visit https://laws-lois.justice.gc.ca/eng/regulations/C.R.C.%2C_c._986/index.html for a more detailed analysis. It Is also important to research your own Province and observe any specific legislation on record keeping.


Employer Responsibility

Employers are required to keep payroll and other employment records for at least 36 months. Employers must also have posted any Code requirements and notices required by law, along with instructions where employees may obtain further information.


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