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@@ -92,6 +92,13 @@ The payroll department in a large organization may have:
- payroll managers who manage the payroll function, the payroll staff and represent payroll at the management level
Legislation vs. regulation
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
**The legislation** specifies the __requirements__.
**The regulation** specifies the __methods__ of applying the legislation.
Payroll Content Knowledge
--------------------------
@@ -163,6 +170,193 @@ must have. Effective payroll professionals should be:
Payroll Stakeholders
=====================
**Stakeholders** are the individuals, groups and agencies, both internal
and external to the organization, who share an interest in the function and
output of the payroll department. Stakeholders can be considered customers of the payroll department and payroll practitioners
can take a proactive customer service approach to serving these individuals and groups.
Payroll Management Stakeholders
--------------------------------
**Payroll Management Stakeholders** are the federal and provincial/territorial governments,
the internal stakeholders and the external stakeholders. Internal stakeholders
include employees, employers and other departments within the organization.
External stakeholders include benefit carriers, courts, unions, pension
providers, charities, third party administrators and outsource/software vendors.
Government Stakeholders
--------------------------
Government legislation provides the rules and regulations that the payroll function must
administer with respect to payments made to employees. For this reason, it is important for
the payroll practitioner to understand both the scope and the source of payroll-related
legislation.
Canada is ruled by a federal government with ten largely self-governing provinces and three
territories controlled by the federal government. Payroll practitioners have to be compliant
not only with the federal government legislation, but with the provincial and territorial
governments' legislation as well.
As a result, payroll practitioners and their organizations are affected by the enactment of
legislation at both the federal and provincial/territorial level.
The federal parliament has the power to make laws for the peace, order and good government
of Canada. The federal cabinet is responsible for most of the legislation introduced by
parliament, and has the sole power to prepare and introduce tax legislation involving the
expenditure of public money.
The provincial/territorial legislatures have power over direct taxation in the province or
territory for the purposes of natural resources, prisons (except for federal penitentiaries),
charitable institutions, hospitals (except marine hospitals), municipal institutions, education,
licences for provincial/territorial and municipal revenue purposes, local works, incorporation
of provincial/territorial organizations, the creation of courts and the administration of justice,
fines and penalties for breaking provincial/territorial laws.
In the case of old age, disability, and survivor's pensions, again both the federal and
provincial/territorial governments have power. In this instance, if their laws conflict, the
provincial/territorial power prevails.
The federal government cannot transfer any of its powers to a provincial/territorial
legislature, nor can a provincial/territorial legislature transfer any of its powers to the federal
government. The federal government can, however, delegate the administration of a federal
act to a provincial/territorial agency, and a provincial/territorial legislature can delegate the
administration of a provincial/territorial act to a federal agency.
Federal Government
-------------------
The *Constitution Act of 1867* outlined the division of legislative power and authority between
federal and provincial/territorial jurisdictional governments. The exclusive legislative
authority of the Parliament of Canada extends to all matters regarding:
- the regulation of trade and commerce
- the raising of money by any mode or system of taxation
- the borrowing of money on the public credit
- the postal service
- fixing and providing salaries and allowances for civil and other officers of the Government of Canada
- navigation and shipping
- ferries between a province and any British or foreign country or between two provinces
- criminal law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters
- anything not specifically assigned to the provinces under this Act
The Canada Labour Code is legislation that consolidates certain statutes respecting labour.
Part I deals with Industrial Relations, Part II deals with Occupational Health and Safety and
Part III deals with Labour Standards. The primary objective of Part III is to establish and
protect employees' and employers' rights to fair and equitable conditions of employment.
Part III provisions establish minimum requirements concerning the working conditions of
employees under federal jurisdiction in the following industries and organizations:
- industries and undertakings of inter-provincial/territorial, national, or international nature, that is, transportation, communications, radio and television broadcasting, banking, uranium mining, grain elevators, and flour and feed operations
- organizations whose operations have been declared for the general advantage of Canada or two or more provinces, and such Crown corporations as Canada Post Corporation, and the Canadian Broadcasting Corporation (CBC)
Provincial/Territorial Governments
------------------------------------
Under the *Constitution Act of 1867*, the exclusive legislative authority of the provinces and
territories exists over:
- all laws regarding property and civil rights, which give the provinces/territories the authority to enact legislation to establish employment standards for working conditions
- employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction
The existing divisions between federal and provincial/territorial control impact payroll when
dealing with employment/labour standards. Employment/labour standards are rules legislated
by each provincial/territorial jurisdiction that dictate issues such as hours of work, minimum
wage, overtime, vacation pay and termination pay requirements.
Employers must follow the employment/labour standards legislated by the jurisdiction in
which their employees work, unless they are governed by federal labour standards. Federal
labour standards apply to certain industries and organizations, regardless of where the
employees work.
The person or persons performing the payroll function must clearly understand under which
employment/labour standards jurisdiction the employees of the organization fall.
Organizations may have some employees who fall under federal jurisdiction and another
group of employees who fall under provincial/territorial legislation.
Internal Stakeholders
---------------------
Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.
Employers - Management may require certain information from payroll to make sound
business decisions.
Employees - Employees require that their pay is received in a timely and accurate manner to
meet personal obligations. Employees must also be assured that their personal information is
kept confidential.
Other departments - Many departments interact with payroll, either for information or
reporting. According to the Canadian Payroll Association's 2020 National Payroll Week
(NPW) Payroll Professional Research Survey, fifty-five percent of payroll practitioners
report through the finance department and thirty-two percent report through the human
resources department.
Information such as general ledger posting, payroll and benefit costs
and salary information must flow between payroll, human resources and finance in formats
needed for their various requirements.
In addition, other departments such as contracts and manufacturing often need payroll
information for budgeting, analytical and quality purposes.
External Stakeholders
---------------------
External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.
Benefit Carriers are insurance companies that provide benefit coverage to employees.
Payroll is responsible for deducting and remitting premiums for the insurance coverage to the
carriers and for providing reports on employee enrolment and coverage levels.
Courts and the CRA require payroll to accurately deduct and remit amounts ordered to be
withheld through garnishments, third party demands, requirements to pay and support
deduction orders.
**Unions** require that payroll accurately deduct and remit union dues and initiation fees, and to
ensure that the terms of the collective agreement are adhered to. It is estimated that just under
one-third of the workforce in Canada belongs to a trade union. Payroll professionals must be
familiar with the role and activities of trade unions and the responsibilities of the employer
and the payroll department in a unionized environment.
Trade unions negotiate with the employer, through collective bargaining, the wages, benefits,
allowances and other terms and conditions of employment on behalf of their member
employees. The outcome of negotiations is a collective agreement, which is a legally binding
contract between the employer, the union and the employees.
**Pension Providers** are third party pension plan providers that may require payroll to provide
enrolment reports on participating employees and length of service calculations, and to remit
employee deductions and employer contributions.
**Charities** have arrangements with some organizations to facilitate employee donations
through payroll deductions. Payroll is responsible for remitting these deductions to the
charity.
**Third Party Administrators** are organizations that affect the administration of the payroll
function. Examples of these external stakeholders are banking institutions or benefit
organizations that offer Group Registered Retirement Saving Plans (RRSP). Payroll is
responsible for deducting any employee contributions and remitting employer and employee
contributions to the plan administrator.
**Outsource/Software vendors** are payroll service providers or payroll software vendors that
work with the payroll department to ensure the payroll is being processed accurately and
efficiently.
Content Review
==================
@@ -176,7 +370,31 @@ Content Review
- Payroll practitioner knowledge consists of information on payroll compliance legislation, payroll processes and payroll reporting as well as technical, personal and professional skills.
- Stakeholders are the individuals, groups and agencies, both internal and external to the organization, who share an interest in the function and output of the payroll department.
- Payroll management stakeholders are the federal and provincial/territorial governments, the internal stakeholders, and the external stakeholders. Internal stakeholders include employees, employers and other departments within the organization.
- External stakeholders include benefit carriers, courts, unions, pension providers, charities, third party administrators and outsource/software vendors.
- The federal parliament has the power to make laws for the peace, order and good government of Canada.
- The provincial/territorial legislatures have power over direct taxation in the province/territory for provincial/territorial purposes.
- Federal control exists over industries and undertakings of inter-provincial/territorial, national, or international nature and organizations whose operations have been declared for the general advantage of Canada or two or more provinces and Crown corporations.
- Provincial/territorial legislation exists over all laws regarding property and civil rights, and employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction.
- Employers must follow the employment/labour standards legislated by the jurisdiction in which their employees work, unless they are governed by federal labour standards.
- Where legislation requires employer compliance, there are financial penalties or the possibility of legal action to encourage compliance.
Review Questions
=================
1. What is the primary objective of the payroll department?
2. List the three types of payroll management stakeholders and provide an example of each.
3. Explain the difference between legislation and regulation.
4. List three external stakeholders and explain their compliance requirements.

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@@ -51,10 +51,7 @@ to confidently perform essential payroll functions encountered in day-to-day ope
<li class="toctree-l1"><a class="reference internal" href="preface.html">1. PREFACE</a></li>
<li class="toctree-l1"><a class="reference internal" href="introduction.html">2. INTRODUCTION TO CANADIAN PAYROLL</a><ul>
<li class="toctree-l2"><a class="reference internal" href="introduction.html#payroll-objectives-and-definitions">2.1. Payroll Objectives and Definitions</a><ul>
<li class="toctree-l3"><a class="reference internal" href="introduction.html#payroll-content-knowledge">2.1.1. Payroll Content Knowledge</a></li>
<li class="toctree-l3"><a class="reference internal" href="introduction.html#technical-skills">2.1.2. Technical Skills</a></li>
<li class="toctree-l3"><a class="reference internal" href="introduction.html#personal-and-professional-skills">2.1.3. Personal and Professional Skills</a></li>
<li class="toctree-l3"><a class="reference internal" href="introduction.html#behavioural-and-ethical-standards">2.1.4. Behavioural and Ethical Standards</a></li>
<li class="toctree-l3"><a class="reference internal" href="introduction.html#legislation-vs-regulation">2.1.1. Legislation vs. regulation</a></li>
</ul>
</li>
<li class="toctree-l2"><a class="reference internal" href="introduction.html#payroll-stakeholders">2.2. Payroll Stakeholders</a></li>

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@@ -121,8 +121,12 @@ required reports.</p>
<li><p>payroll managers who manage the payroll function, the payroll staff and represent payroll at the management level</p></li>
</ul>
</div></blockquote>
<section id="legislation-vs-regulation">
<h3><span class="section-number">2.1.1. </span>Legislation vs. regulation<a class="headerlink" href="#legislation-vs-regulation" title="Link to this heading"></a></h3>
<p><strong>The legislation</strong> specifies the __requirements__.</p>
<p><strong>The regulation</strong> specifies the __methods__ of applying the legislation.</p>
<section id="payroll-content-knowledge">
<h3><span class="section-number">2.1.1. </span>Payroll Content Knowledge<a class="headerlink" href="#payroll-content-knowledge" title="Link to this heading"></a></h3>
<h4><span class="section-number">2.1.1.1. </span>Payroll Content Knowledge<a class="headerlink" href="#payroll-content-knowledge" title="Link to this heading"></a></h4>
<p>Payroll administrators should know the following to effectively perform
their duties:</p>
<blockquote>
@@ -135,7 +139,7 @@ their duties:</p>
<p>In addition, payroll reporting includes accounting for payroll expenses and accruals to internal financial systems and federal and provincial/territorial year-end reporting.</p>
</section>
<section id="technical-skills">
<h3><span class="section-number">2.1.2. </span>Technical Skills<a class="headerlink" href="#technical-skills" title="Link to this heading"></a></h3>
<h4><span class="section-number">2.1.1.2. </span>Technical Skills<a class="headerlink" href="#technical-skills" title="Link to this heading"></a></h4>
<p>The technical skills required by payroll professionals include proficiency in
computer programs such as payroll software and financial systems,
spreadsheets, databases and word processing.</p>
@@ -146,7 +150,7 @@ As a payroll practitioner, you must be prepared and willing to embrace
continuous learning.</p>
</section>
<section id="personal-and-professional-skills">
<h3><span class="section-number">2.1.3. </span>Personal and Professional Skills<a class="headerlink" href="#personal-and-professional-skills" title="Link to this heading"></a></h3>
<h4><span class="section-number">2.1.1.3. </span>Personal and Professional Skills<a class="headerlink" href="#personal-and-professional-skills" title="Link to this heading"></a></h4>
<p>The following personal and professional skills will assist payroll
administrators in dealing with the various stakeholders involved in the
payroll process:</p>
@@ -161,7 +165,7 @@ payroll process:</p>
</div></blockquote>
</section>
<section id="behavioural-and-ethical-standards">
<h3><span class="section-number">2.1.4. </span>Behavioural and Ethical Standards<a class="headerlink" href="#behavioural-and-ethical-standards" title="Link to this heading"></a></h3>
<h4><span class="section-number">2.1.1.4. </span>Behavioural and Ethical Standards<a class="headerlink" href="#behavioural-and-ethical-standards" title="Link to this heading"></a></h4>
<p>Behaviour and ethics are two areas that build on the skills that an effective payroll practitioner
must have. Effective payroll professionals should be:</p>
<blockquote>
@@ -185,8 +189,146 @@ must have. Effective payroll professionals should be:</p>
</div></blockquote>
</section>
</section>
</section>
<section id="payroll-stakeholders">
<h2><span class="section-number">2.2. </span>Payroll Stakeholders<a class="headerlink" href="#payroll-stakeholders" title="Link to this heading"></a></h2>
<p><strong>Stakeholders</strong> are the individuals, groups and agencies, both internal
and external to the organization, who share an interest in the function and
output of the payroll department. Stakeholders can be considered customers of the payroll department and payroll practitioners
can take a proactive customer service approach to serving these individuals and groups.</p>
<p><strong>Payroll Management Stakeholders</strong> are the federal and provincial/territorial governments,
the internal stakeholders and the external stakeholders. Internal stakeholders
include employees, employers and other departments within the organization.
External stakeholders include benefit carriers, courts, unions, pension
providers, charities, third party administrators and outsource/software vendors.</p>
<p>Government legislation provides the rules and regulations that the payroll function must
administer with respect to payments made to employees. For this reason, it is important for
the payroll practitioner to understand both the scope and the source of payroll-related
legislation.</p>
<p>Canada is ruled by a federal government with ten largely self-governing provinces and three
territories controlled by the federal government. Payroll practitioners have to be compliant
not only with the federal government legislation, but with the provincial and territorial
governments’ legislation as well.</p>
<p>As a result, payroll practitioners and their organizations are affected by the enactment of
legislation at both the federal and provincial/territorial level.
The federal parliament has the power to make laws for the peace, order and good government
of Canada. The federal cabinet is responsible for most of the legislation introduced by
parliament, and has the sole power to prepare and introduce tax legislation involving the
expenditure of public money.</p>
<p>The provincial/territorial legislatures have power over direct taxation in the province or
territory for the purposes of natural resources, prisons (except for federal penitentiaries),
charitable institutions, hospitals (except marine hospitals), municipal institutions, education,
licences for provincial/territorial and municipal revenue purposes, local works, incorporation
of provincial/territorial organizations, the creation of courts and the administration of justice,
fines and penalties for breaking provincial/territorial laws.</p>
<p>In the case of old age, disability, and survivor’s pensions, again both the federal and
provincial/territorial governments have power. In this instance, if their laws conflict, the
provincial/territorial power prevails.</p>
<p>The federal government cannot transfer any of its powers to a provincial/territorial
legislature, nor can a provincial/territorial legislature transfer any of its powers to the federal
government. The federal government can, however, delegate the administration of a federal
act to a provincial/territorial agency, and a provincial/territorial legislature can delegate the
administration of a provincial/territorial act to a federal agency.</p>
<p>The <em>Constitution Act of 1867</em> outlined the division of legislative power and authority between
federal and provincial/territorial jurisdictional governments. The exclusive legislative
authority of the Parliament of Canada extends to all matters regarding:</p>
<blockquote>
<div><ul class="simple">
<li><p>the regulation of trade and commerce</p></li>
<li><p>the raising of money by any mode or system of taxation</p></li>
<li><p>the borrowing of money on the public credit</p></li>
<li><p>the postal service</p></li>
<li><p>fixing and providing salaries and allowances for civil and other officers of the Government of Canada</p></li>
<li><p>navigation and shipping</p></li>
<li><p>ferries between a province and any British or foreign country or between two provinces</p></li>
<li><p>criminal law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters</p></li>
<li><p>anything not specifically assigned to the provinces under this Act</p></li>
</ul>
</div></blockquote>
<p>The Canada Labour Code is legislation that consolidates certain statutes respecting labour.
Part I deals with Industrial Relations, Part II deals with Occupational Health and Safety and
Part III deals with Labour Standards. The primary objective of Part III is to establish and
protect employees’ and employers’ rights to fair and equitable conditions of employment.</p>
<p>Part III provisions establish minimum requirements concerning the working conditions of
employees under federal jurisdiction in the following industries and organizations:</p>
<blockquote>
<div><ul class="simple">
<li><p>industries and undertakings of inter-provincial/territorial, national, or international nature, that is, transportation, communications, radio and television broadcasting, banking, uranium mining, grain elevators, and flour and feed operations</p></li>
<li><p>organizations whose operations have been declared for the general advantage of Canada or two or more provinces, and such Crown corporations as Canada Post Corporation, and the Canadian Broadcasting Corporation (CBC)</p></li>
</ul>
</div></blockquote>
<p>Under the <em>Constitution Act of 1867</em>, the exclusive legislative authority of the provinces and
territories exists over:</p>
<blockquote>
<div><ul class="simple">
<li><p>all laws regarding property and civil rights, which give the provinces/territories the authority to enact legislation to establish employment standards for working conditions</p></li>
<li><p>employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction</p></li>
</ul>
</div></blockquote>
<p>The existing divisions between federal and provincial/territorial control impact payroll when
dealing with employment/labour standards. Employment/labour standards are rules legislated
by each provincial/territorial jurisdiction that dictate issues such as hours of work, minimum
wage, overtime, vacation pay and termination pay requirements.</p>
<p>Employers must follow the employment/labour standards legislated by the jurisdiction in
which their employees work, unless they are governed by federal labour standards. Federal
labour standards apply to certain industries and organizations, regardless of where the
employees work.</p>
<p>The person or persons performing the payroll function must clearly understand under which
employment/labour standards jurisdiction the employees of the organization fall.
Organizations may have some employees who fall under federal jurisdiction and another
group of employees who fall under provincial/territorial legislation.</p>
<p>Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.</p>
<p>Employers - Management may require certain information from payroll to make sound
business decisions.</p>
<p>Employees - Employees require that their pay is received in a timely and accurate manner to
meet personal obligations. Employees must also be assured that their personal information is
kept confidential.</p>
<p>Other departments - Many departments interact with payroll, either for information or
reporting. According to the Canadian Payroll Association’s 2020 National Payroll Week
(NPW) Payroll Professional Research Survey, fifty-five percent of payroll practitioners
report through the finance department and thirty-two percent report through the human
resources department.</p>
<p>Information such as general ledger posting, payroll and benefit costs
and salary information must flow between payroll, human resources and finance in formats
needed for their various requirements.</p>
<p>In addition, other departments such as contracts and manufacturing often need payroll
information for budgeting, analytical and quality purposes.</p>
<p>External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.</p>
<p>Benefit Carriers are insurance companies that provide benefit coverage to employees.
Payroll is responsible for deducting and remitting premiums for the insurance coverage to the
carriers and for providing reports on employee enrolment and coverage levels.</p>
<p>Courts and the CRA require payroll to accurately deduct and remit amounts ordered to be
withheld through garnishments, third party demands, requirements to pay and support
deduction orders.</p>
<p><strong>Unions</strong> require that payroll accurately deduct and remit union dues and initiation fees, and to
ensure that the terms of the collective agreement are adhered to. It is estimated that just under
one-third of the workforce in Canada belongs to a trade union. Payroll professionals must be
familiar with the role and activities of trade unions and the responsibilities of the employer
and the payroll department in a unionized environment.</p>
<p>Trade unions negotiate with the employer, through collective bargaining, the wages, benefits,
allowances and other terms and conditions of employment on behalf of their member
employees. The outcome of negotiations is a collective agreement, which is a legally binding
contract between the employer, the union and the employees.</p>
<p><strong>Pension Providers</strong> are third party pension plan providers that may require payroll to provide
enrolment reports on participating employees and length of service calculations, and to remit
employee deductions and employer contributions.</p>
<p><strong>Charities</strong> have arrangements with some organizations to facilitate employee donations
through payroll deductions. Payroll is responsible for remitting these deductions to the
charity.</p>
<p><strong>Third Party Administrators</strong> are organizations that affect the administration of the payroll
function. Examples of these external stakeholders are banking institutions or benefit
organizations that offer Group Registered Retirement Saving Plans (RRSP). Payroll is
responsible for deducting any employee contributions and remitting employer and employee
contributions to the plan administrator.</p>
<p><strong>Outsource/Software vendors</strong> are payroll service providers or payroll software vendors that
work with the payroll department to ensure the payroll is being processed accurately and
efficiently.</p>
</section>
<section id="content-review">
<h2><span class="section-number">2.3. </span>Content Review<a class="headerlink" href="#content-review" title="Link to this heading"></a></h2>
@@ -197,6 +339,15 @@ must have. Effective payroll professionals should be:</p>
<li><p>Legislation refers to laws enacted by a legislative body.</p></li>
<li><p>Compliance is the observance of official requirements.</p></li>
<li><p>Payroll practitioner knowledge consists of information on payroll compliance legislation, payroll processes and payroll reporting as well as technical, personal and professional skills.</p></li>
<li><p>Stakeholders are the individuals, groups and agencies, both internal and external to the organization, who share an interest in the function and output of the payroll department.</p></li>
<li><p>Payroll management stakeholders are the federal and provincial/territorial governments, the internal stakeholders, and the external stakeholders. Internal stakeholders include employees, employers and other departments within the organization.</p></li>
<li><p>External stakeholders include benefit carriers, courts, unions, pension providers, charities, third party administrators and outsource/software vendors.</p></li>
<li><p>The federal parliament has the power to make laws for the peace, order and good government of Canada.</p></li>
<li><p>The provincial/territorial legislatures have power over direct taxation in the province/territory for provincial/territorial purposes.</p></li>
<li><p>Federal control exists over industries and undertakings of inter-provincial/territorial, national, or international nature and organizations whose operations have been declared for the general advantage of Canada or two or more provinces and Crown corporations.</p></li>
<li><p>Provincial/territorial legislation exists over all laws regarding property and civil rights, and employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction.</p></li>
<li><p>Employers must follow the employment/labour standards legislated by the jurisdiction in which their employees work, unless they are governed by federal labour standards.</p></li>
<li><p>Where legislation requires employer compliance, there are financial penalties or the possibility of legal action to encourage compliance.</p></li>
</ul>
</div></blockquote>
</section>
@@ -204,6 +355,9 @@ must have. Effective payroll professionals should be:</p>
<h2><span class="section-number">2.4. </span>Review Questions<a class="headerlink" href="#review-questions" title="Link to this heading"></a></h2>
<ol class="arabic simple">
<li><p>What is the primary objective of the payroll department?</p></li>
<li><p>List the three types of payroll management stakeholders and provide an example of each.</p></li>
<li><p>Explain the difference between legislation and regulation.</p></li>
<li><p>List three external stakeholders and explain their compliance requirements.</p></li>
</ol>
</section>
</section>
@@ -220,10 +374,13 @@ must have. Effective payroll professionals should be:</p>
<ul>
<li><a class="reference internal" href="#">2. INTRODUCTION TO CANADIAN PAYROLL</a><ul>
<li><a class="reference internal" href="#payroll-objectives-and-definitions">2.1. Payroll Objectives and Definitions</a><ul>
<li><a class="reference internal" href="#payroll-content-knowledge">2.1.1. Payroll Content Knowledge</a></li>
<li><a class="reference internal" href="#technical-skills">2.1.2. Technical Skills</a></li>
<li><a class="reference internal" href="#personal-and-professional-skills">2.1.3. Personal and Professional Skills</a></li>
<li><a class="reference internal" href="#behavioural-and-ethical-standards">2.1.4. Behavioural and Ethical Standards</a></li>
<li><a class="reference internal" href="#legislation-vs-regulation">2.1.1. Legislation vs. regulation</a><ul>
<li><a class="reference internal" href="#payroll-content-knowledge">2.1.1.1. Payroll Content Knowledge</a></li>
<li><a class="reference internal" href="#technical-skills">2.1.1.2. Technical Skills</a></li>
<li><a class="reference internal" href="#personal-and-professional-skills">2.1.1.3. Personal and Professional Skills</a></li>
<li><a class="reference internal" href="#behavioural-and-ethical-standards">2.1.1.4. Behavioural and Ethical Standards</a></li>
</ul>
</li>
</ul>
</li>
<li><a class="reference internal" href="#payroll-stakeholders">2.2. Payroll Stakeholders</a></li>

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# Sphinx build info version 1
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</a>
<ul>
<li class="toctree-l3">
<a class="reference internal" href="#payroll-content-knowledge">
2.1.1. Payroll Content Knowledge
</a>
</li>
<li class="toctree-l3">
<a class="reference internal" href="#technical-skills">
2.1.2. Technical Skills
</a>
</li>
<li class="toctree-l3">
<a class="reference internal" href="#personal-and-professional-skills">
2.1.3. Personal and Professional Skills
</a>
</li>
<li class="toctree-l3">
<a class="reference internal" href="#behavioural-and-ethical-standards">
2.1.4. Behavioural and Ethical Standards
<a class="reference internal" href="#legislation-vs-regulation">
2.1.1. Legislation vs. regulation
</a>
</li>
</ul>
@@ -725,185 +710,205 @@ required reports.
</ul>
</div>
</blockquote>
<section id="payroll-content-knowledge">
<section id="legislation-vs-regulation">
<h4>
Payroll Content Knowledge
<a class="headerlink" href="#payroll-content-knowledge" title="Link to this heading">
Legislation vs. regulation
<a class="headerlink" href="#legislation-vs-regulation" title="Link to this heading">
&para;
</a>
</h4>
<p>
Payroll administrators should know the following to effectively perform
<strong>
The legislation
</strong>
specifies the __requirements__.
</p>
<p>
<strong>
The regulation
</strong>
specifies the __methods__ of applying the legislation.
</p>
<section id="payroll-content-knowledge">
<h5>
Payroll Content Knowledge
<a class="headerlink" href="#payroll-content-knowledge" title="Link to this heading">
&para;
</a>
</h5>
<p>
Payroll administrators should know the following to effectively perform
their duties:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
<strong>
Payroll Compliance Legislation:
</strong>
the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act, Employment/Labour Standards, privacy legislation, Workers&rsquo; Compensation and provincial/territorial payroll-specific legislation
</p>
</li>
<li>
<p>
<strong>
Payroll Processes:
</strong>
the remuneration and deduction components of payroll and how to use these components to calculate a net pay in both regular and non-regular circumstances
</p>
</li>
<li>
<p>
<strong>
Payroll Reporting:
</strong>
how to calculate and remit amounts due to government agencies, insurance companies, unions and other third parties.
</p>
</li>
</ul>
</div>
</blockquote>
<p>
In addition, payroll reporting includes accounting for payroll expenses and accruals to internal financial systems and federal and provincial/territorial year-end reporting.
</p>
</section>
<section id="technical-skills">
<h4>
Technical Skills
<a class="headerlink" href="#technical-skills" title="Link to this heading">
&para;
</a>
</h4>
<p>
The technical skills required by payroll professionals include proficiency in
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
<strong>
Payroll Compliance Legislation:
</strong>
the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act, Employment/Labour Standards, privacy legislation, Workers&rsquo; Compensation and provincial/territorial payroll-specific legislation
</p>
</li>
<li>
<p>
<strong>
Payroll Processes:
</strong>
the remuneration and deduction components of payroll and how to use these components to calculate a net pay in both regular and non-regular circumstances
</p>
</li>
<li>
<p>
<strong>
Payroll Reporting:
</strong>
how to calculate and remit amounts due to government agencies, insurance companies, unions and other third parties.
</p>
</li>
</ul>
</div>
</blockquote>
<p>
In addition, payroll reporting includes accounting for payroll expenses and accruals to internal financial systems and federal and provincial/territorial year-end reporting.
</p>
</section>
<section id="technical-skills">
<h5>
Technical Skills
<a class="headerlink" href="#technical-skills" title="Link to this heading">
&para;
</a>
</h5>
<p>
The technical skills required by payroll professionals include proficiency in
computer programs such as payroll software and financial systems,
spreadsheets, databases and word processing.
</p>
<p>
Organizations often change their payroll and business systems to meet new
</p>
<p>
Organizations often change their payroll and business systems to meet new
technology requirements and corporate reporting needs. It is important for
payroll personnel to have the ability to be adaptable to changing systems.
As a payroll practitioner, you must be prepared and willing to embrace
continuous learning.
</p>
</section>
<section id="personal-and-professional-skills">
<h4>
Personal and Professional Skills
<a class="headerlink" href="#personal-and-professional-skills" title="Link to this heading">
&para;
</a>
</h4>
<p>
The following personal and professional skills will assist payroll
</p>
</section>
<section id="personal-and-professional-skills">
<h5>
Personal and Professional Skills
<a class="headerlink" href="#personal-and-professional-skills" title="Link to this heading">
&para;
</a>
</h5>
<p>
The following personal and professional skills will assist payroll
administrators in dealing with the various stakeholders involved in the
payroll process:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
written communication skills, such as preparing employee emails and memos, management reports, policies and procedures and correspondence with various levels of government
</p>
</li>
<li>
<p>
verbal communication skills, to be able to respond to internal and external stakeholder inquiries
</p>
</li>
<li>
<p>
the ability to read, understand and interpret legal terminology found in documents such as collective agreements, benefit contracts and government regulations
</p>
</li>
<li>
<p>
excellent mathematical skills to perform various calculations
</p>
</li>
<li>
<p>
problem solving, decision-making, time management and organizational skills
</p>
</li>
</ul>
</div>
</blockquote>
</section>
<section id="behavioural-and-ethical-standards">
<h4>
Behavioural and Ethical Standards
<a class="headerlink" href="#behavioural-and-ethical-standards" title="Link to this heading">
&para;
</a>
</h4>
<p>
Behaviour and ethics are two areas that build on the skills that an effective payroll practitioner
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
written communication skills, such as preparing employee emails and memos, management reports, policies and procedures and correspondence with various levels of government
</p>
</li>
<li>
<p>
verbal communication skills, to be able to respond to internal and external stakeholder inquiries
</p>
</li>
<li>
<p>
the ability to read, understand and interpret legal terminology found in documents such as collective agreements, benefit contracts and government regulations
</p>
</li>
<li>
<p>
excellent mathematical skills to perform various calculations
</p>
</li>
<li>
<p>
problem solving, decision-making, time management and organizational skills
</p>
</li>
</ul>
</div>
</blockquote>
</section>
<section id="behavioural-and-ethical-standards">
<h5>
Behavioural and Ethical Standards
<a class="headerlink" href="#behavioural-and-ethical-standards" title="Link to this heading">
&para;
</a>
</h5>
<p>
Behaviour and ethics are two areas that build on the skills that an effective payroll practitioner
must have. Effective payroll professionals should be:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
trustworthy, as the potential for fraud is ever present
</p>
</li>
<li>
<p>
conscientious, with a keen attention to detail
</p>
</li>
<li>
<p>
discreet, due to the confidential nature of information being handled
</p>
</li>
<li>
<p>
tactful in dealing with employees who can be very sensitive when
</p>
</li>
</ul>
<p>
discussing their financial issues
</p>
<ul class="simple">
<li>
<p>
perceptive, able to understand all sides of an issue
</p>
</li>
<li>
<p>
able to work under the pressures of absolute deadlines
</p>
</li>
<li>
<p>
able to use common sense in order to recognize problems quickly and
</p>
</li>
</ul>
<p>
apply sound solutions
</p>
<ul class="simple">
<li>
<p>
able to remain objective and maintain a factual perspective when
</p>
</li>
</ul>
<p>
dealing with questions and inquiries
</p>
</div>
</blockquote>
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
trustworthy, as the potential for fraud is ever present
</p>
</li>
<li>
<p>
conscientious, with a keen attention to detail
</p>
</li>
<li>
<p>
discreet, due to the confidential nature of information being handled
</p>
</li>
<li>
<p>
tactful in dealing with employees who can be very sensitive when
</p>
</li>
</ul>
<p>
discussing their financial issues
</p>
<ul class="simple">
<li>
<p>
perceptive, able to understand all sides of an issue
</p>
</li>
<li>
<p>
able to work under the pressures of absolute deadlines
</p>
</li>
<li>
<p>
able to use common sense in order to recognize problems quickly and
</p>
</li>
</ul>
<p>
apply sound solutions
</p>
<ul class="simple">
<li>
<p>
able to remain objective and maintain a factual perspective when
</p>
</li>
</ul>
<p>
dealing with questions and inquiries
</p>
</div>
</blockquote>
</section>
</section>
</section>
<section id="payroll-stakeholders">
@@ -913,6 +918,290 @@ must have. Effective payroll professionals should be:
&para;
</a>
</h3>
<p>
<strong>
Stakeholders
</strong>
are the individuals, groups and agencies, both internal
and external to the organization, who share an interest in the function and
output of the payroll department. Stakeholders can be considered customers of the payroll department and payroll practitioners
can take a proactive customer service approach to serving these individuals and groups.
</p>
<p>
<strong>
Payroll Management Stakeholders
</strong>
are the federal and provincial/territorial governments,
the internal stakeholders and the external stakeholders. Internal stakeholders
include employees, employers and other departments within the organization.
External stakeholders include benefit carriers, courts, unions, pension
providers, charities, third party administrators and outsource/software vendors.
</p>
<p>
Government legislation provides the rules and regulations that the payroll function must
administer with respect to payments made to employees. For this reason, it is important for
the payroll practitioner to understand both the scope and the source of payroll-related
legislation.
</p>
<p>
Canada is ruled by a federal government with ten largely self-governing provinces and three
territories controlled by the federal government. Payroll practitioners have to be compliant
not only with the federal government legislation, but with the provincial and territorial
governments&rsquo; legislation as well.
</p>
<p>
As a result, payroll practitioners and their organizations are affected by the enactment of
legislation at both the federal and provincial/territorial level.
The federal parliament has the power to make laws for the peace, order and good government
of Canada. The federal cabinet is responsible for most of the legislation introduced by
parliament, and has the sole power to prepare and introduce tax legislation involving the
expenditure of public money.
</p>
<p>
The provincial/territorial legislatures have power over direct taxation in the province or
territory for the purposes of natural resources, prisons (except for federal penitentiaries),
charitable institutions, hospitals (except marine hospitals), municipal institutions, education,
licences for provincial/territorial and municipal revenue purposes, local works, incorporation
of provincial/territorial organizations, the creation of courts and the administration of justice,
fines and penalties for breaking provincial/territorial laws.
</p>
<p>
In the case of old age, disability, and survivor&rsquo;s pensions, again both the federal and
provincial/territorial governments have power. In this instance, if their laws conflict, the
provincial/territorial power prevails.
</p>
<p>
The federal government cannot transfer any of its powers to a provincial/territorial
legislature, nor can a provincial/territorial legislature transfer any of its powers to the federal
government. The federal government can, however, delegate the administration of a federal
act to a provincial/territorial agency, and a provincial/territorial legislature can delegate the
administration of a provincial/territorial act to a federal agency.
</p>
<p>
The
<em>
Constitution Act of 1867
</em>
outlined the division of legislative power and authority between
federal and provincial/territorial jurisdictional governments. The exclusive legislative
authority of the Parliament of Canada extends to all matters regarding:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
the regulation of trade and commerce
</p>
</li>
<li>
<p>
the raising of money by any mode or system of taxation
</p>
</li>
<li>
<p>
the borrowing of money on the public credit
</p>
</li>
<li>
<p>
the postal service
</p>
</li>
<li>
<p>
fixing and providing salaries and allowances for civil and other officers of the Government of Canada
</p>
</li>
<li>
<p>
navigation and shipping
</p>
</li>
<li>
<p>
ferries between a province and any British or foreign country or between two provinces
</p>
</li>
<li>
<p>
criminal law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters
</p>
</li>
<li>
<p>
anything not specifically assigned to the provinces under this Act
</p>
</li>
</ul>
</div>
</blockquote>
<p>
The Canada Labour Code is legislation that consolidates certain statutes respecting labour.
Part I deals with Industrial Relations, Part II deals with Occupational Health and Safety and
Part III deals with Labour Standards. The primary objective of Part III is to establish and
protect employees&rsquo; and employers&rsquo; rights to fair and equitable conditions of employment.
</p>
<p>
Part III provisions establish minimum requirements concerning the working conditions of
employees under federal jurisdiction in the following industries and organizations:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
industries and undertakings of inter-provincial/territorial, national, or international nature, that is, transportation, communications, radio and television broadcasting, banking, uranium mining, grain elevators, and flour and feed operations
</p>
</li>
<li>
<p>
organizations whose operations have been declared for the general advantage of Canada or two or more provinces, and such Crown corporations as Canada Post Corporation, and the Canadian Broadcasting Corporation (CBC)
</p>
</li>
</ul>
</div>
</blockquote>
<p>
Under the
<em>
Constitution Act of 1867
</em>
, the exclusive legislative authority of the provinces and
territories exists over:
</p>
<blockquote>
<div>
<ul class="simple">
<li>
<p>
all laws regarding property and civil rights, which give the provinces/territories the authority to enact legislation to establish employment standards for working conditions
</p>
</li>
<li>
<p>
employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction
</p>
</li>
</ul>
</div>
</blockquote>
<p>
The existing divisions between federal and provincial/territorial control impact payroll when
dealing with employment/labour standards. Employment/labour standards are rules legislated
by each provincial/territorial jurisdiction that dictate issues such as hours of work, minimum
wage, overtime, vacation pay and termination pay requirements.
</p>
<p>
Employers must follow the employment/labour standards legislated by the jurisdiction in
which their employees work, unless they are governed by federal labour standards. Federal
labour standards apply to certain industries and organizations, regardless of where the
employees work.
</p>
<p>
The person or persons performing the payroll function must clearly understand under which
employment/labour standards jurisdiction the employees of the organization fall.
Organizations may have some employees who fall under federal jurisdiction and another
group of employees who fall under provincial/territorial legislation.
</p>
<p>
Internal stakeholders are those individuals or departments closely related to the organization
that the payroll department is serving. This group includes employers, employees and other
departments in the organization.
</p>
<p>
Employers - Management may require certain information from payroll to make sound
business decisions.
</p>
<p>
Employees - Employees require that their pay is received in a timely and accurate manner to
meet personal obligations. Employees must also be assured that their personal information is
kept confidential.
</p>
<p>
Other departments - Many departments interact with payroll, either for information or
reporting. According to the Canadian Payroll Association&rsquo;s 2020 National Payroll Week
(NPW) Payroll Professional Research Survey, fifty-five percent of payroll practitioners
report through the finance department and thirty-two percent report through the human
resources department.
</p>
<p>
Information such as general ledger posting, payroll and benefit costs
and salary information must flow between payroll, human resources and finance in formats
needed for their various requirements.
</p>
<p>
In addition, other departments such as contracts and manufacturing often need payroll
information for budgeting, analytical and quality purposes.
</p>
<p>
External stakeholders are organizations that are neither government nor internal stakeholders,
yet have a close working relationship with the payroll function. Compliance with external
stakeholder requirements is also a responsibility of the payroll department. In most cases,
compliance will require that payroll request a cheque from accounts payable and send it to
the external organization along with supporting documentation.
</p>
<p>
Benefit Carriers are insurance companies that provide benefit coverage to employees.
Payroll is responsible for deducting and remitting premiums for the insurance coverage to the
carriers and for providing reports on employee enrolment and coverage levels.
</p>
<p>
Courts and the CRA require payroll to accurately deduct and remit amounts ordered to be
withheld through garnishments, third party demands, requirements to pay and support
deduction orders.
</p>
<p>
<strong>
Unions
</strong>
require that payroll accurately deduct and remit union dues and initiation fees, and to
ensure that the terms of the collective agreement are adhered to. It is estimated that just under
one-third of the workforce in Canada belongs to a trade union. Payroll professionals must be
familiar with the role and activities of trade unions and the responsibilities of the employer
and the payroll department in a unionized environment.
</p>
<p>
Trade unions negotiate with the employer, through collective bargaining, the wages, benefits,
allowances and other terms and conditions of employment on behalf of their member
employees. The outcome of negotiations is a collective agreement, which is a legally binding
contract between the employer, the union and the employees.
</p>
<p>
<strong>
Pension Providers
</strong>
are third party pension plan providers that may require payroll to provide
enrolment reports on participating employees and length of service calculations, and to remit
employee deductions and employer contributions.
</p>
<p>
<strong>
Charities
</strong>
have arrangements with some organizations to facilitate employee donations
through payroll deductions. Payroll is responsible for remitting these deductions to the
charity.
</p>
<p>
<strong>
Third Party Administrators
</strong>
are organizations that affect the administration of the payroll
function. Examples of these external stakeholders are banking institutions or benefit
organizations that offer Group Registered Retirement Saving Plans (RRSP). Payroll is
responsible for deducting any employee contributions and remitting employer and employee
contributions to the plan administrator.
</p>
<p>
<strong>
Outsource/Software vendors
</strong>
are payroll service providers or payroll software vendors that
work with the payroll department to ensure the payroll is being processed accurately and
efficiently.
</p>
</section>
<section id="content-review">
<h3>
@@ -949,6 +1238,51 @@ must have. Effective payroll professionals should be:
Payroll practitioner knowledge consists of information on payroll compliance legislation, payroll processes and payroll reporting as well as technical, personal and professional skills.
</p>
</li>
<li>
<p>
Stakeholders are the individuals, groups and agencies, both internal and external to the organization, who share an interest in the function and output of the payroll department.
</p>
</li>
<li>
<p>
Payroll management stakeholders are the federal and provincial/territorial governments, the internal stakeholders, and the external stakeholders. Internal stakeholders include employees, employers and other departments within the organization.
</p>
</li>
<li>
<p>
External stakeholders include benefit carriers, courts, unions, pension providers, charities, third party administrators and outsource/software vendors.
</p>
</li>
<li>
<p>
The federal parliament has the power to make laws for the peace, order and good government of Canada.
</p>
</li>
<li>
<p>
The provincial/territorial legislatures have power over direct taxation in the province/territory for provincial/territorial purposes.
</p>
</li>
<li>
<p>
Federal control exists over industries and undertakings of inter-provincial/territorial, national, or international nature and organizations whose operations have been declared for the general advantage of Canada or two or more provinces and Crown corporations.
</p>
</li>
<li>
<p>
Provincial/territorial legislation exists over all laws regarding property and civil rights, and employment in manufacturing, mining, construction, wholesale and retail trade, service industries, local businesses and any industry or occupation not specifically covered under federal jurisdiction.
</p>
</li>
<li>
<p>
Employers must follow the employment/labour standards legislated by the jurisdiction in which their employees work, unless they are governed by federal labour standards.
</p>
</li>
<li>
<p>
Where legislation requires employer compliance, there are financial penalties or the possibility of legal action to encourage compliance.
</p>
</li>
</ul>
</div>
</blockquote>
@@ -966,6 +1300,21 @@ must have. Effective payroll professionals should be:
What is the primary objective of the payroll department?
</p>
</li>
<li>
<p>
List the three types of payroll management stakeholders and provide an example of each.
</p>
</li>
<li>
<p>
Explain the difference between legislation and regulation.
</p>
</li>
<li>
<p>
List three external stakeholders and explain their compliance requirements.
</p>
</li>
</ol>
</section>
</section>