What Must an Alberta Employment Contract Include?

Building a compliant Alberta employment contract: the steps

An Alberta employment contract is not a blank page. Certain rules apply automatically, and certain terms must be captured in writing before they take legal effect. The steps below walk through what a contract needs to address, in the order that matters most for compliance.

1. Start from the Employment Standards Code floor. Alberta’s Employment Standards Code sets minimum standards for wages, hours, overtime, vacations, statutory holidays, leaves, and termination. These minimums apply to employees regardless of what the contract says, so a contract cannot lawfully offer less. A contract can offer more than the statutory minimum, but not less.

2. Set out hours of work, and put any averaging arrangement in writing. If the contract sets up an averaging arrangement (where an employee’s daily hours are averaged over a period of weeks, for example to manage overtime on rotating shifts), that arrangement must be in writing and must specify the number of weeks over which hours are averaged. An averaging arrangement that exists only as a verbal understanding does not meet this requirement.

3. Address deductions from earnings, and get written authorization where required. Where an employer wants the ability to deduct pay for cash shortages or loss of property, the Employment Standards Code requires the employee’s written authorization before such a deduction can be made, apart from limited statutory exceptions. A contract that is silent on this, or that only implies consent, does not satisfy the requirement.

4. Include a termination and notice provision that meets the statutory minimums. Alberta contracts must contemplate that either party gives written notice to end the employment. The Code sets minimum notice periods based on length of service (or pay in lieu of notice), and a contract’s termination clause operates against that backdrop. Employers planning a group termination affecting 50 or more employees at one location within a four-week period must also give the Minister responsible for Employment Standards at least four weeks’ written notice; this is a notice obligation to government, separate from notice to the affected employees.

5. Add special terms for young workers, if applicable. Employing a worker aged 14 or under requires written parental or guardian consent as part of the arrangement. Employing a 13 or 14 year old in an artistic endeavour, or in work not otherwise listed under the youth employment rules, requires an Employment Standards permit obtained before the work begins. A contract for a young worker that skips this step is not compliant, even if the pay and hours terms are otherwise fine.

6. Reflect the correct wage floor for domestic employees. Where the contract is for a domestic employee, the applicable minimum wage differs depending on whether the employee lives in the employer’s home. A live-in domestic employee’s contract needs to reflect the monthly minimum wage rate that applies to that living arrangement, rather than an hourly rate that may not fit the role.

7. Confirm the employer’s record-keeping obligations tie back to the contract. Part 2 of the Employment Standards Code requires employers to keep and provide written earnings records to employees. While this is primarily an employer obligation rather than a contract clause, a contract that references pay periods and pay statements should align with this record-keeping duty rather than contradict it.

Before you start drafting

Before drafting or revising a contract, it helps to know which parts of the arrangement trigger a written-terms requirement under the Employment Standards Code (averaging arrangements, deduction authorizations, termination notice, and youth employment consent or permits) versus which parts are simply governed by the statutory floor whether or not the contract mentions them. Confirming which category each term falls into avoids drafting a clause that looks complete but omits the written element the Code actually requires.

What the Code does not let a contract override

None of the statutory minimums described above (wages, hours, overtime, vacations, holidays, leaves, and termination notice) can be contracted down. An employer and employee can agree to terms more generous than the Code, and they can agree on additional matters the Code does not address, but any term that falls below the Code’s floor does not relieve the employer of the statutory obligation.