The Northwest Territories ESA: A Quick Guide for Employers

The labour market in the Northwest Territories is characterized by a high employment rate, with 23,900 people employed as of July 2023, representing an employment rate of 69.7%. The public administration, health care, and social assistance sectors are the largest employers. Like with all Canadian provinces or territories, the employment standards legislation ensures employees are treated fairly and in accordance with the law.

What are the key provisions of the Northwest Territories' Employment Standards Act?

Employment legislation in the Northwest Territories includes four main legal statutes: the Employment Standards Act (ESA) and its Regulations, the Safety Act, the Occupational Health and Safety (OHS) Regulations, and the Workers’ Compensation Act. This blog will provide an overview of the minimum entitlements that all territorially-regulated employees in the Northwest Territories must receive.

What are the minimum wage and overtime requirements in the Northwest Territories?

As of September 1, 2024, the minimum wage in the Northwest Territories is $16.70 per hour. Territorially-regulated employers must ensure that their employees receive at least the minimum wage.

Overtime

Territorially-regulated employees are entitled to overtime pay if they work more than eight hours a day and 40 hours in a week. The maximum hours of work for employees are 10 hours per day and 60 hours per week with at least one day off per week. Overtime pay like in most Canadian jurisdictions, is set at 1.5 times their regular pay rate. If the employee is paid on a basis other than time worked, the overtime rate is 1.5 times the minimum wage.

Employees in the Northwest Territories are entitled to the following  at least one day of rest per week of work. two consecutive days every two consecutive weeks, and three consecutive days every three consecutive weeks of work. They are also entitled to a 30-minute break after having worked for 5 hours.

The ESA allows employers in the Northwest Territories to implement an overtime averaging agreement. The following requirements apply: employers must first apply to the Employment Standards Officer for an Overtime Averaging Order. The employer’s decision must also have the approval of a majority of affected employees. Lastly, in the case of non-unionized employees, the averaging agreement cannot last more than 1-year. 

What are the rules regarding vacation and leave entitlements in the Northwest Territories?

 Statutory or general holidays:

• New Year’s Day
• Good Friday
• Victoria Day
• National Indigenous Peoples Day
• Canada Day
• The First Monday in August
• Labour Day
• National Day for Truth and Reconciliation
• Thanksgiving Day
• Remembrance Day
• Christmas Day

Employers in the Northwest Territories must note that Boxing Day is not a statutory holiday, but employers may choose to recognize them. For example, public sector employees within the Government of the Northwest Territories enjoy a paid Boxing Day holiday.

The ESA provides that an employee is always entitled to statutory holiday pay if they work on the holiday. For those that do not work on a statutory holiday, they must have attended work for 30 days in the last 12 months and have been scheduled to work the day before and after the holiday.

Vacation Time and Pay

In the Northwest Territories, employees are eligible for paid vacation time once they have completed one year of employment. Employers must schedule vacation for their employees no later than 6-months following completion of their year of employment. The ESA does not require employees to provide a minimum amount of notice for vacation time-off requests.

Territorially-regulated employees that have completed between one to five years of employment are entitled to at least two weeks of paid vacation time. Employees who have completed six or more years of employment are entitled to three weeks of paid vacation time. The ESA does not specify how vacation time should be scheduled.

With regards to vacation pay, employees who have completed between one to five years of employment have their vacation pay calculated as 4% of earnings. Vacation pay rate for employees with six or more years of employment is set at 6%. This includes all remunerations for work performed except tips and gratuities. Regarding how vacation pay should be paid, the ESA states that it must be paid at least one day before the employee begins their vacation.

Job-Protected Leaves of Absence

Territorially-regulated employees are entitled to 10 types of statutory leaves:

• Pregnancy Leave
• Parental Leave (including adoption)
• Sick Leave
• Compassionate Leave
• Family Caregiver Leave (related to Critical Illness)
• Family Violence Leave
• Emergency Leave
• Bereavement Leave
• Court Leave (Jury Duty Leave)
• Reservist Leave

Employers in the Northwest Territories must review the ESA to determine the eligibility criteria for any of these leaves of absence. Employers must also note that most of the statutory leaves listed above are considered unpaid leave, except for Family Violence leave, which is partially paid (5 paid days after 3 months of service; otherwise, it is unpaid provided the employee has completed 1 month of service).

How are employee termination and layoffs regulated under the NWT Employment Standards Act?

Temporary Layoff

The ESA permits employers to put an employee under a temporary layoff. It is best practice for employment contracts to provide the employer’s right to implement a temporary layoff. A temporary layoff is an interruption of work (not employment) for period not exceeding 45 days within 60 consecutive days. If the employer sees that the layoff period will exceed 45 days, they must first consult with an Employment Standards Officer who, in the circumstances, will determine a fixed timeframe in which the employee must be recalled.

Employers must provide a written notice of temporary layoff to employees. It should expressly indicate the expected return date; otherwise, the employee is deemed to have been immediately terminated. If the layoff exceeds the maximum period set in the ESA, the employment is deemed to have terminated on the last day of temporary layoff.

Termination of Employment

The ESA provides that employees terminated without cause are entitled to two weeks notice, plus one additional week for each year of employment over two years, up to a maximum of 8 weeks. See chat below: 

Termination notice requirements do not apply to employees with less than 90 days of service or who have been terminated for just cause.

Employers in the Northwest Territories are prohibited from changing working conditions during the termination notice period. This includes making unilateral changes to the employee’s working conditions, as it exposes the employer to potential liability for constructive dismissal. Employers are also prohibited from using the employee’s accrued unpaid vacation pay or unused vacation time to reduce their termination notice obligations.

The ESA sets time limits for the payment of wages owed to an employee at the time of employment termination. Territorially-regulated employees must receive payment of owed wages within ten days after termination. Accrued vacation pay is to be paid ‘without delay’. These time limits apply to all wages owed to the employee under their employment contract or the ESA, including termination pay.

Mandatory Workplace Policies

According to the Occupational Health and Safety Regulations, employers in Nunavut must have the following workplace policies in place:

• General Occupational Health and Safety Policy (lay out OHS duties and responsibilities)
• Freedom from Workplace Harassment and Violence Program
• Workplace Hazards and how to identify them
• Emergency Response Plan
• Incident Investigation and Reporting procedure. 

Do you need help understanding the Northwest Territories Employment Standard’s Act?

Our advisors can answer any questions you may have about the ESA as well as develop policies to help protect your business from costly claims. Our experts can also advise you on any other HR or health and safety questions you may have.

Contact us today at 1 (833) 247-3652 to find out how your business can benefit from our services.