AMENDING PAID SICK LEAVE IN BC (2025)

Issue

Since 2022, BC employers have been required to provide at least 5 days of paid illness or injury leave, otherwise known as ‘sick leave,’ to all employees. While laudable in its aim to support workers and protect workplaces, this new obligation represents an unnecessary intrusion by the government into the employer-employee relationship, creates a financial and administrative burden on businesses, and reduces BC business competitiveness.

Background

Following a brief consultation period, the provincial government announced on November 24, 2021, that less than 6 weeks later all employers would have to implement a new paid sick leave program for all employees – including part-time, full-time, and casual.

This created a new cost for businesses of all sectors and sizes, but particularly those for whom a sick employee requires another shift to backfill the position. Unfortunately, this includes the retail and hospitality sectors which were deeply impacted by both the pandemic which preceded the sick leave legislation, and the inflation-driven economic challenges which followed it.

Since 2022, businesses of all sizes and sectors have voiced their concerns about the cost of the paid sick leave to chambers of commerce across the province, as they have had to weather declining economic performance in BC and handle the challenges of increased costs at all turns.

Over the past number of years, BC’s GDP growth rate has tumbled. From a real GDP growth rate of 6.1% in 2021, that declined to 3.6% in 2022, 1.6% in 2023, and has been forecast to be 1.1% or 1.2% in 2024, which would be the worst performing province in Canada.[1] [2]

During that time, business outlook has also lagged as costs pressures mounted. Business sentiment in BC was behind the national average in 10 out of the last 12 quarters, and in the most recent Canadian Survey on Business Sentiment by the Canadian Chamber of Commerce and Statistics Canada, costs-related challenges were named as the biggest obstacles for Canadian businesses, with those in BC being second-most likely to cite rising input costs (of which labour is a part) as a barrier to their success.[3]

These rising costs take their toll on the bottom-line. In 2023, of all province and territories in Canada, BC saw the second-highest increase in business insolvencies with a 65% increase in the year before[4] and in the first three quarters of 2024 bankruptcies rose again in BC by 19%.

Following this time of economic uncertainty and challenge, BC businesses deserve to see changes that support their bottom-line viability and competitiveness, and directly reducing their labour costs through paid sick leave is one way to accomplish this.

Reducing the Burden on Employers by Providing for 3 Paid Sick Days

During the development of this sick leave requirement, the government considered three options of either 3, 5, or 10 days.

The provincial government’s own surveys during the consultation found that 50% of BC workers had paid sick leave already, and of those, most did not even use all of those paid sick days they already had. The government’s own survey of employers found that “50% or less of their employees use all of their allotted paid sick days in a typical year, and that employees typically used between one and five sick days per year.” One government survey noted that “nearly three-quarters of respondents…reported that they typically do not use all their allotted paid sick days each year.” Importantly, even among workers who receive only 1-2 paid sick days a year, 49% still reported that they do not use them all! [5] [6] Clearly, given the government’s own data at the time the three-day model would have been the most targeted and appropriate allotment.

Further, when government must step into the free market to provide minimum standards, its intervention arguably should be in as limited a fashion as possible. If the government wished to regulate this area, the focus should have been on establishing a minimum, base standard only, which allowed businesses to build upon that if they wished. Thus, government should have opted for the least prescriptive model available: 3 days.

As changing the required number of sick days to be provided means a revision to regulations only - not entirely new legislation - a revision to reduce provided days to three should be implemented, reducing the burden and cost on employers already struggling with high labour costs, the impacts of high inflation on the cost of inputs, lacklustre consumer spending, and the looming threat of a tariff-induced recession.

It is important to note that this legislation creates only minimum standards; businesses and employers can – and many do – offer paid sick leave benefits over and above the minimum required, and many others allow some level of carry-over of unused days to the following year, making the actual number of days available higher.

Implementing Further Eligibility Criteria for Casual and Part-Time Employees

In addition to the number of days, the breadth of the application of the paid sick leave causes challenges for businesses. In BC, paid sick leave is extended to not just full-time employees, but all part-time and casual employees as well, with very little in terms of limitations on their eligibility for the leave. It is important to note that for many businesses, when part-time or casual employees are unable to work, employers must bring in replacement staff to cover that shift, creating a second layer of cost beyond the initial paid sick day.

As government has already included casual and part-time employees in the legislation, instead of removing them entirely, implementing further eligibility criteria in the form of a minimum-hours-worked requirement would be beneficial. Currently, if an employee works or earns any amount in the 30 days preceding a sick day, they are eligible for the day to be paid. Alternatively, to be eligible for paid sick days a part-time employee should be required to have worked a minimum number of hours in the 30 days preceding the sick day in question, such as 48 hours (approximately three half-shifts or 1.5 full days a week). This would be like the model already used by employers in BC to gauge whether employees are entitled to statutory holiday pay and would limit this new paid obligation to workers with a more consistent tie to the employer.

Allowing for Pro-Rating of Paid Sick Leave Requirements

Under the current paid sick leave regime employees are entitled to 5 days of paid sick leave after 90 consecutive days of employment with an employer. Employees who start employment part way through a year are entitled to the full 5 paid days despite not being employed for the full year. Under current legislation, an employee who begins works as late as September 27 would technically be eligible for the full 5 days paid sick leave by the end of December – which hardly seems like an objectively fair application of the law.

In most other business and personal circumstances where someone is owed a benefit or incurs a cost mid-way through a defined time period, pro-rating is the fair way of ensuring that one only pays for—or receives—the equivalent value given the reduced time involved. As paid sick days do not accrue and cannot be portioned out in fractions, a pure pro-rating based on the number of months or weeks left in the calendar year may be impractical. Instead, a mid-year eligibility criterion should be established whereby employees who start employment on or after July 2 (halfway through the year) would only be eligible for up to 3 paid sick days instead of 5.[7] This change would be fairer for both employers and employees who work the full year, while still providing paid sick day coverage.

THE CHAMBER RECOMMENDS

That the Provincial Government:

1. Amend the Employment Standards Act Regulations to reduce the number of paid sick days required to be provided to three.
2. Implement a minimum-hours-worked requirement for paid sick days eligibility, similar to the model used for determining eligibility for statutory holiday pay.
3. Allow for pro-rating of the paid sick days required for employees who commence employment after halfway through a calendar year.