British Columbia Law

Employment Law for BC Business Owners: What You Must Know

By Andrew Liggett, Sea to Sky Law, New Westminster, BC

Employment Law for BC Business Owners: What You Must Know

Running a business in British Columbia means taking on a set of legal obligations to your workers from the moment you hire your first employee. The *Employment Standards Act* (ESA), the *Human Rights Code*, and WorkSafeBC regulations create a framework that applies whether you have one employee or one hundred.

Understanding these rules is not optional — failing to meet them can result in complaints, penalties, back-pay orders, and costly wrongful dismissal claims.

This guide covers the core employment law obligations every BC business owner needs to understand.

The Employment Standards Act: Minimum Obligations

The ESA sets the floor for employment in BC. No employment contract can go below these minimums, even if the employee agrees in writing.

Minimum Wage and Pay Requirements

As of June 2025, BC's general minimum wage is $17.40 per hour. Wages must be paid at least twice per month. Employers must keep payroll records for at least four years.

Hours of Work and Overtime

Employees are entitled to overtime pay (1.5 times their regular rate) after 8 hours in a day or 40 hours in a week. After 12 hours in a day, the rate increases to double time. You can set up an averaging agreement with employees to smooth out irregular hours, but these agreements must comply with ESA requirements.

Statutory Holidays

BC has 11 statutory holidays per year. Eligible employees are entitled to statutory holiday pay whether they work that day or not. If an employee works on a statutory holiday, they are entitled to time-and-a-half plus a day off in lieu, or double time if they agree to waive the day off.

Annual Vacation

Employees earn vacation entitlement from their first day of work:

• After 1 year: 2 weeks (4% of wages)
• After 5 years: 3 weeks (6% of wages)

Vacation pay must be paid at least 7 days before the vacation begins, unless the employer and employee agree otherwise.

Leaves of Absence

BC employees are entitled to several unpaid leaves, including:

• Maternity and parental leave — up to 78 weeks combined
• Personal illness or injury leave — 5 days paid, 3 days unpaid per year
• Bereavement leave — 3 days unpaid per year
• Domestic violence leave — up to 10 days unpaid per year
• Jury duty leave — unpaid, for the duration of service

Refusing to grant a protected leave or penalizing an employee for taking one is a serious ESA violation.

Employment Contracts: Why Written Agreements Matter

BC law does not require a written employment contract, but every employer should have one. A well-drafted contract:

• Clearly defines the role, compensation, and benefits
• Sets out termination entitlements (notice or pay in lieu)
• Includes a probationary period clause (up to 3 months under the ESA)
• Addresses confidentiality and protection of business information
• Contains a non-solicitation clause (carefully drafted — see below)

Without a written contract that addresses termination, BC courts apply common law reasonable notice — which can be far longer than ESA minimums, sometimes many months of pay depending on the employee's age, tenure, and role.

Termination Notice Under the ESA

ESA minimum notice (or pay in lieu) scales with length of service:

• After 3 months: 1 week
• After 1 year: 2 weeks
• After 3 years: 3 weeks
• After 4 years: 4 weeks, and so on up to 8 weeks maximum

These are the minimums. Common law notice — what a court would award without a limiting contract clause — can be dramatically higher.

Independent Contractor Misclassification: A Major Risk

Many BC business owners engage workers as "independent contractors" to avoid payroll taxes, vacation pay, and ESA obligations. BC courts and the CRA look past the label to the actual working relationship. Factors that suggest employment rather than contracting include:

• The worker works exclusively or primarily for your business
• You control how and when the work is done
• You supply the tools, equipment, or workspace
• The worker cannot subcontract or profit independently from the arrangement
• There is no real risk of loss for the worker

If a worker is later found to be an employee, your business faces liability for unpaid ESA entitlements, CPP and EI remittances, potential WorkSafeBC assessments, and wrongful dismissal claims.

Getting the classification right from the start — with a properly drafted services agreement — is far cheaper than defending a misclassification claim.

The Human Rights Code: Employer Obligations

The *BC Human Rights Code* prohibits discrimination in employment on protected grounds, including race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, sex, sexual orientation, gender identity or expression, and age.

Discrimination can be direct or systemic. Employers must also accommodate employees with disabilities, family status obligations, and religious practices to the point of undue hardship.

Workplace Harassment and the Duty to Investigate

Employers have a legal duty to maintain a harassment-free workplace. When a complaint is made — whether formally or informally — you must take it seriously, investigate promptly and fairly, and take corrective action where harassment is found. Failure to investigate a complaint can make your business liable even if the harassing conduct was by another employee, not management.

A written workplace harassment policy, complaint procedure, and regular training are not just good practice — they are your best protection against liability.

WorkSafeBC: Health and Safety Obligations

Every BC employer must register with WorkSafeBC and pay assessments. Beyond premiums, you have a legal duty to:

• Maintain a safe workplace and identify hazards
• Have a written health and safety program (required for most employers)
• Investigate workplace accidents and near-misses
• Not retaliate against workers who raise safety concerns

Serious injuries must be reported to WorkSafeBC immediately. Failure to report or retaliate against a worker for making a safety complaint can result in significant penalties.

Wrongful Dismissal: The Most Costly Employment Law Risk

Terminating an employee incorrectly is one of the most expensive mistakes a BC business owner can make. "Wrongful dismissal" in BC does not necessarily mean the termination was unfair — it means the employee did not receive adequate notice or pay in lieu.

Without Cause Termination

You can terminate an employee at any time without cause, provided you give adequate notice or pay in lieu. As described above, without a carefully drafted contract clause, common law notice can be substantial — particularly for long-serving, senior, or specialized employees.

With Cause Termination

Terminating "for cause" — meaning no notice or pay — requires serious misconduct: theft, fraud, serious insubordination, harassment of co-workers, or repeated misconduct after documented warnings. Casual poor performance, personality conflicts, or a single incident rarely meet the legal threshold for cause.

Courts scrutinize cause dismissals closely; getting it wrong exposes you to a wrongful dismissal claim plus potential aggravated damages.

Before You Terminate

Before terminating any employee, particularly a long-serving one, get legal advice. The cost of a brief consultation is a fraction of the potential liability of getting it wrong.

Non-Compete and Non-Solicitation Clauses in BC

BC courts are skeptical of non-compete clauses that restrict where a former employee can work. To be enforceable, such a clause must be:

• Reasonable in geographic scope
• Reasonable in duration
• Necessary to protect a legitimate business interest

Most broadly-drafted non-competes are struck down. Non-solicitation clauses — restricting a former employee from soliciting your clients or staff — are more readily enforced, provided they are clearly worded and reasonable in scope.

These clauses must be in a written contract signed at the beginning of employment (or with fresh consideration if added later) to have any force.

Practical Steps for BC Employers

• Have a written employment contract for every worker, reviewed by a lawyer before signing
• Classify workers correctly — employee or independent contractor — from the start
• Keep accurate payroll and hours records for at least 4 years
• Have a written workplace harassment policy and complaint procedure
• Get legal advice before terminating any employee, especially for cause
• Review your contracts periodically as the business and roles evolve

Employment law is one of the areas where proactive legal advice pays for itself many times over. A well-drafted contract and clear policies prevent the disputes that become expensive litigation.

This article is general information, not legal or tax advice. Meetings are by appointment only, by phone or secure video.