Over the last couple of months (start of 2022), we have been assisting our clients with an increased number of audits and investigations done by the BC Employment Standards Branch. Some of the audits started off as a single Employment Standards complaint but then turned into an audit of the company's entire workforce for general compliance with Employment Standards Act. This comes after the article we prepared last year on Important Changes to BC Employment Standards Act, which you can read here. As part of recent amendments to the Act, the Director's powers to investigate compliance with the Act "at any time or for any reason" were increased at that time, and it seems have been put into force following the amendments.

In conducting these audits, the delegates of the Director have the power to compel any record from the employer, speak to witnesses including other employees, and even physically attend the workplace to inspect records and investigate.

Some of the main focus of the audits are in the following areas:

• Overtime pay (especially around workplaces with informal agreements around hours and banked time and salaried employees),
• Vacation pay, and
• Statutory holiday pay.

Investigations related to unpaid wages include a review of payroll records. The Employment Standards Branch will:

• Audit the records directly
• Require an employer to conduct a self-audit and review it, or
• Review an audit completed by a third party hired by the employer

For further insights on the topic of salaried employees and overtime, we highly recommend taking a look at our article prepared by Jesse Dunning explaining Overtime and the Salaried Employee under the Employment Standards Act. Overtime for salaried employees can be an area of confusion for employers and workers in BC. Many assume that because an employment contract sets out a fixed salary for the year, the employer is not required to pay the employee for overtime worked. This assumption is incorrect, and can lead to significant problems in the employment relationship, as well as during an Employment Standards investigation.

Enforcement Through Employment Standards Investigations

Once the investigation is complete, if wages are owing, the Employment Standards Branch may make a written decision called a determination, if full voluntary payment is not made. If an employer has not followed B.C. employment standards, they will be ordered to pay wages owed along with interest and penalties.

The scariest thing is that if the breach is company-wide (or department-wide), during an investigation the Employment Standards Branch can order compensation be paid for entire affected workforce even if only one person complained and nobody else has issues. The Branch can go back 1 year by default, but up to 24 months in special circumstances.

If you are contacted by the Employment Standards Branch regarding an investigation, it is important that you obtain legal advice from experienced employment lawyers right away. Our Group has been successful in assisting clients reach settlements to reduce the financial impact of these audits, and are here to help.

In addition, as always, we recommend being proactive about protecting your business. If you are an employer concerned that you have salaried employees (or dependent contractors) who have been working significant amounts of unpaid overtime, it is important that you speak with a qualified employment lawyer regarding your situation. At this time, we are offering Audit Prevention services, including a review of your existing Employment Contracts, Workplace Policies and practices, with a focus on identifying any potential breaches or weak points, and working with you on remediation and ensuring compliance with the Act, before an investigation comes your way.

If you are interested or would like to find out more, please submit a Contact form or email Chris Drinovz.

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