Federally regulated employers take note: there are two new pending Regulations addressing (i) reimbursement of employees’ work-related expenses and (ii) the requirement to give new employees a written statement of employment conditions within the first 30 days of employment.
Reimbursement for Reasonable Work-Related Expenses
Time limit for reimbursement
Employers will have to reimburse reasonable work-related expenses within 30 days of an employee’s submitting a claim for reimbursement. This time limit may be altered by a written agreement between the employer and employee.
What counts as a work-related expense
When determining whether an expense is work-related, the following factors are to be considered:
- whether the expense is connected with the employee’s performance of work;
- whether the expense was incurred to enable an employee to perform work;
- whether the incurred expense is a requirement of continued employment;
- whether the expense was incurred to satisfy a requirement for the employee’s work imposed by an occupational health or safety standard; and,
- whether the expense was incurred for a legitimate business purpose, rather than for personal use or enjoyment.
What makes a work-related expense reasonable
The reasonableness of a claimed expense is assessed based on the following factors:
- whether the expense is connected to the employee’s performance of work;
- whether the expense was incurred to enable an employee to perform work;
- whether the expense was incurred at the direction of the employer;
- whether the amount of expense is reasonable and does not incur additional unnecessary expense;
- whether the expense is one that is normally reimbursed by employers in similar industries;
- whether the expense was authorized by the employer in advance;
- whether the expense was incurred by the employee in good faith; and,
- whether the claim for the expense includes documentation, such as a receipt or invoice.
The government hopes that these guidelines will prevent litigation over the reimbursement of workplace-related expenses by clarifying what qualifies, or does not qualify, as a reasonable work-related expense.
Statement of Employment Conditions
The proposed regulations also set out the information that should be included in a statement of employment conditions, which must be provided to employees within their first 30 days of employment. This includes:
- the names of the parties to the employment relationship;
- the job title and brief description of the employee’s duties and responsibilities;
- the place of work;
- the date of commencement of employment;
- the term of employment;
- the probationary period, if any;
- the specific requirements of employment (e.g. driver’s license, criminal records check);
- the required training;
- the hours of work specific to the employee (including how they are calculated and overtime rules);
- the rate of wages or salary (including overtime rates);
- the frequency of payments;
- any mandatory deductions; and,
- the reimbursement of work-related expenses (process, authorization, etc.).
Administrative Monetary Penalties (AMPs)
The proposed regulations also include updated AMPs for violations of the new requirements.
Non-compliance with the time limit for reimbursing work-related expenses may result in a fine of $500-$6,000.
Non-compliance with the obligation to provide a statement of employment conditions may result in a fine of $200-$2,000.
Takeaway
It is important for employers to be aware of the proposed regulations.
If they become law, employers will have to amend their hiring procedures and provide adequate training on those to ensure compliance and avoid possible penalties.
The proposed regulations are published for comment by October 31, 2022, which can be done using the new online commenting system.
