Keep in the loop with the latest payroll services, work management news and expert advice from Blue Canvas.
Did you know that there is a strategic time for a company to pay bonuses?
In Manitoba, the labour laws state that statutory pay calculations are to be based upon the wages earned in the preceding 28 days prior to the statutory holiday for employees that a) the number of hours worked in a normal workday varies from day to day or b) the employee’s wage for regular hours of work varies from pay period to pay period. This calculation would apply to part time employees or those who have a variable work week or schedule. For salaried employees, their statutory pay entitlement is simply a normal day pay, and bonus payments at any time would not be included in the statutory pay calculations.
If your organization employs many part time or variable time/paid employees take heed. Should non -discretionary bonuses, (that is, bonuses based on performance, attainment of goals or found within your contract) be paid within 28 days before a statutory holiday for these employees, as an employer, you will be required to pay an additional 5% on the bonus for stat pay.
Other forms of compensation, for example, vacation pay lump sum pay outs are also included in stat pay calculations. Be wary of when these get paid out, too. Overtime pay, however IS NOT included in the statutory holiday pay calculation in Manitoba, so no worries here. Remember this only applies to non-discretionary bonuses, so those Christmas or holiday bonuses you provide to staff are exempt from such calculations.
If this situation applies to your company, you can time the payment of bonuses or vacation lump sum payouts to occur more than 28 days prior to the next statutory holidays. You may want to make a special pay run for that date to ensure compliance. For example, paying the bonuses on July 2nd would ensure the 28 day period to July 30th would not fall into the Aug 3rd statutory holiday period calculations. Payments of bonuses on June 30th, however, would need to be included in the July 1st stat calculations, so simply paying out bonuses 2 days earlier would cost you an extra 5% on those staff affected.
Blue Canvas’ statutory pay calculator takes the manual grunt-work out of calculating statutory holiday pay in all regions across the country, even on non-hourly forms of compensation that are only recorded in a payroll. This means things like non-discretionary bonuses, vacation payouts and any other forms of compensation that are statutory pay eligible are included in the calculations for you. It’s accurate and effortless.