Hiring your first employee in BC: the legal checklist

Hiring your first employee is a milestone, and it changes your legal position overnight. From the job posting to the first payday, BC law sets rules you cannot contract out of.

This checklist walks through the steps in order: deciding whether you are hiring an employee at all, what the posting must say, registering with WorkSafeBC and the CRA, putting the terms in writing, and setting up payroll the way the Employment Standards Act requires.

Employee or contractor? Decide before you hire

Start with the relationship you are actually creating. BC's Employment Standards Act defines "employee" broadly. It includes a person receiving wages for work performed for another, a person an employer allows to perform work normally done by an employee, and a person being trained for the employer's business. The Act's requirements are minimums, and an agreement to waive them has no effect (section 4).

If you plan to pay someone as an independent contractor, make sure the working arrangement genuinely supports it: their own tools, their own clients, control over how the work is done. Calling a worker a contractor on paper does not change what the relationship is in practice.

Before you post the job

Two sets of rules apply as soon as you advertise.

• Pay in the posting. Under section 2 of the Pay Transparency Act, an employer must state the expected wage or salary, or the expected range, in an advertisement for a publicly advertised job opportunity, unless exempted by regulation. That section has been in force since November 1, 2023 and, unlike the reporting rules, it is not limited to larger employers.
• No pay history questions. Section 3 of the same Act bars employers from seeking an applicant's pay history unless it is publicly accessible.
• No misleading offers. Section 8 of the Employment Standards Act prohibits persuading someone to take a job by misrepresenting the availability of the position, the type of work, the wages or the conditions of employment.

The reporting duties under the Pay Transparency Act are a separate matter that applies to larger employers; our article on what employers with 50 or more employees must prepare covers them.

Register with WorkSafeBC and the CRA

WorkSafeBC. WorkSafeBC states that all employers are legally required to have WorkSafeBC coverage unless exempt. Under section 245(1) of the Workers Compensation Act, an employer must keep complete and accurate payroll particulars at a place in BC and give WorkSafeBC an estimate of its payroll when it becomes an employer within the scope of the Act. Delay is costly: under section 263, an employer in default can be required to pay the full amount or capitalized value of compensation for a worker's injury that happens during the default, in addition to any penalty.

CRA payroll account. You will need to withhold income tax, CPP contributions and EI premiums. The CRA says you must register for a payroll account before your first remittance due date, which is the 15th day of the month after the month in which you began withholding.

Put the job in a written employment agreement

The Employment Standards Act does not require a written contract for most employees, but a well-drafted agreement helps avoid many first-hire disputes. It should cover:

• The role. Job title, duties, location, start date and whether the position is full time, part time or for a fixed term.
• Pay and hours. Wage or salary, pay frequency, expected hours and how overtime is approved.
• Termination. What notice or pay the employee receives if you end the employment. Without a clear and enforceable clause, an employee may be entitled to more than the minimum in the Act.
• Confidentiality and work product. Protection for your customer information and ownership of what the employee creates for the business.

Many owners talk about a "probation period". The Act itself works on length of service. Under section 63, after 3 consecutive months of employment the employer becomes liable to pay compensation for length of service equal to one week's wages, rising to 2 weeks after 12 months and 3 weeks after 3 years, plus one week for each additional year up to 8 weeks. Written notice, pay in lieu or a mix of the two can discharge it, and the liability does not arise if the employee quits, retires or is dismissed for just cause.

Have the agreement signed before the first day of work, not after the employee has started.

Set up payroll the way the Act requires

The Employment Standards Act has specific rules for paying and recording wages:

• Minimum wage. You must pay at least the minimum wage (section 16). The rate is adjusted every June 1 (section 16.2), so check the current figure published by the Province before you set pay.
• Paydays. Wages must be paid at least semi-monthly and within 8 days after the end of each pay period (section 17).
• Wage statements. Every payday, the employee receives a written statement showing hours, wage rate, deductions, and gross and net pay (section 27).
• Payroll records. Keep the records listed in section 28 for each employee, in English, at your principal place of business in BC, for 4 years.
• Vacation. Vacation pay of at least 4% of total wages is owed after 5 calendar days of employment, and at least 2 weeks' annual vacation after 12 consecutive months (sections 57 and 58).
• Sick leave. After 90 consecutive days, an employee is entitled each calendar year to paid illness or injury leave for the number of days prescribed by regulation, plus up to 3 unpaid days (section 49.1).

Section 6 also requires you to make available or provide information about the employee's rights under the Act, in a form provided or approved by the Director of Employment Standards.

A few basic policies

A short written handbook, even a few pages, reduces misunderstandings: hours and scheduling, how vacation is requested, overtime approval, use of company equipment and devices, and confidentiality. Policies should match the employment agreement and never promise less than the Act requires.

If you are still setting up the business itself, our legal checklist for starting a business in Vancouver covers the earlier steps.

Making your first hire? Start with the right paperwork

Our business lawyers can prepare an employment agreement and basic workplace policies that fit your business and reflect BC's employment standards.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.