Archived [2009-04-01] - Emergency Salary Advances

The following policy applies to those organizations listed the Public Service Staff Relations Act (PSSRA) Schedule I, Part I.

Separate employers (PSSRA Schedule I, Part II) are encouraged to adopt a similar policy.

The policy does not apply during a period of strike. Procedures regarding the payment of employees during a strike will be provided as required by the situation.

This section authorizes employing departments to requisition emergency salary advances for employees when a regular pay cheque has not been received by the official payday; establishes a standard of timeliness for issuing the first payment to new employees; and places on departments the onus to initiate action whenever the standards are not met through the normal payroll process.

The employee does not have to request an emergency salary advance (ESA). However, if the employee indicates that they do not want the ESA when it is offered, the department is not required to issue one. Such indication should be documented to clearly show that the decision was the employee's.

Employees should receive the compensation to which they are entitled in a timely fashion. An ESA should be available:

• For employees paid in arrears: on initial appointment, re-appointment after leave without pay, or any other salary interruption; payment covering the entitlement for the time worked during the first two-week pay period is due at the end of the second two-week pay period and thereafter at two-week intervals.

Example:

Employee taken on strength on June 2, 2003: first supplementary cheque should be available on June 18, 2003, for the period from June 2 to June 4, 2003, and subsequent cheques every two weeks thereafter.

• For employees paid on a current basis: on initial appointment, re-appointment after leave without pay, or any other salary interruption; payment covering the entitlement for the first two-week pay period is due within ten (10) working days of commencing employment and on the employee's regular payday thereafter.

Example:

Employee taken on strength on June 2, 2003: first supplementary cheque should be available by June 13, 2003, for the period from June 2 to June 4, 2003, and subsequent cheques should be available on every payday thereafter.

When pay cheques are lost prior to delivery to the payee, PWGSC pay offices have the authority to re-run the cheques. Departments should contact the local Regional Services Office of PWGSC to arrange the re-run.

Note: A cheque is considered to have been delivered to the employee once it is given to the employee, deposited as per direct deposit or once the employee's instructions for delivery have been acted upon (e.g. mailed to a bank, etc.).

The following rules apply to the issuance of an ESA:

• An advance shall be issued only in respect of current regular salary entitlements; it shall not be issued for allowances, or retroactive or extra duty entitlements.
• The issuing of an advance prior to the employee's regular payday or use of this advance to make a loan is prohibited.
• The amount of any salary advance should be calculated to the approximate net pay entitlement for the pay period covered, but in no case should exceed two-thirds of the employee's gross pay entitlement for the period.

Example 1 (where employee has already received net pay prior to LWOP)

Gross salary per pay period is $1634.97
Net salary per pay period is $441.97
2/3^rd x $1634.97 = $1089.98
The employee will receive an emergency salary advance of $441.97

Example 2

Gross salary per pay period is $2,234.55
Net salary per pay period is $1,500.07
2/3^rd x $2,234.55 = $1,489.70
The employee will receive an emergency salary advance of $1,489.70

• Salary advances are to be requisitioned from the Receiver General; departmental bank accounts can also be used for this purpose.
• Recovery of an ESA is the responsibility of the department and shall constitute a first charge against the next regular salary payment; in no circumstances shall such advances be recovered over a period of time.

It will be the responsibility of the requisitioning officer to determine the method of recovery of an ESA:

• By requiring the employee to make a cash, (includes a cheque or money order) refund immediately upon receipt of the regular pay cheque (it is intended that an advance be recovered from the cheque(s) covering entitlement for the period covered by the advance) or
• By authorizing the deduction of the full amount of the advance from the employee's next regular salary cheque.
• ESAs constitute accountable advances within the meaning of Section 38 of the Financial Administration Act (FAA) and where necessary, may be recovered out of any moneys payable (including Employment Insurance benefits and Superannuation payments) to the person concerned or that person's estate through set-off pursuant to Section 38(2) of the Financial Administration Act (FAA).

ESAs are not to be issued in respect of:

• Missing or delayed direct deposit payments: these must be handled in accordance with Section 9 of the Direct Deposit Regulations;
• Lost, stolen or destroyed cheques after they have been delivered to the employee: these must be handled in accordance with Section 7 of the Cheque Issue Regulations, 1997.

When an emergency salary advance is issued in one taxation year and repayment is made in the next year, the employee may request a T4-A and a Relevé 2 Supplementary for the amount of the salary advance, provided that these statements for the year in which the advance was made has not been issued by the regular paying office.

When the personnel office requests amended income taxes statements from the Finance Section of the department, this section must seek confirmation from the regular paying office that a T4-A and a Relevé 2 Supplementary have not been issued. The Finance Section of the department that issued the ESA shall provide the employee with a T4-A and a Relevé 2 Supplementary in cases where the regular paying office has not issued one.

On receipt of the T4-A and the Relevé 2 Supplementary, the employing department will provide the regular paying office with a photocopy of the statements and of the receipt or other evidence of repayment of the ESA and request that current year earnings be adjusted.

No adjustment shall be made to current year tax deductions.

As CPP/QPP and EI deductions are not taken from emergency salary advances, Canada Customs and Revenue Agency (CCRA) will request the payment of deficiencies to these accounts. It will be necessary for the paying office that issued the ESA to relay this information into the regular paying office so they may take the necessary recovery action.