As 2024 marks a leap year, providing an extra day in February, the question arises regarding how workers will be compensated for this additional day. According to Alan Price, CEO of BrightHR, the payment scenario varies based on the employment contract and payment structure.
Salaried employees paid on a weekly or bi-weekly basis will receive their usual pay, unaffected by the leap year. However, those who receive monthly payments, particularly on the 15th or end of the month, may face a different situation. Price notes that these employees may not be eligible for additional pay for the extra day unless their employment contract explicitly states otherwise. In such cases, the onus is on the contractual agreement between the employer and the employee.
On the other hand, hourly employees will see an increase in their earnings for working on February 29, as they are typically compensated for all actual hours worked. This includes the extra day in February, which is considered the same as any other working day.
Employers must also consider the implications of minimum wage legislation, especially for salaried workers earning at or close to the minimum wage. Price suggests potential solutions, such as paying these employees for the extra hours worked or offering new employees an annual wage slightly higher than the minimum wage requirements. It is crucial for employers to have proper documentation in place to account for the hours worked and paid to employees.
The scenario becomes more complex for salaried employees, as their entitlement to extra pay depends on explicit provisions in their employment contracts. Peninsula, an HR consulting firm, emphasizes the importance of considering the province’s minimum wage requirements. While paying salaried employees extra for the leap year is not mandatory, employers must ensure that such a decision does not bring employees’ overall pay below the minimum wage threshold specified by the province.
The cost-of-living crisis has already led to additional work hours for many employees, including nurses and various other workers. In this context, employers need to navigate the compensation landscape with careful consideration of contractual agreements, minimum wage regulations, and fair employment practices. The leap year provides a unique situation that requires employers to address compensation matters thoughtfully to maintain compliance and fairness in the workplace.