[Canada] Nearly half a million in wages owed to employees paid with gift cards

In Canada, Vancouver-based Dayton Boots Company has lost its attempt to amend a ruling requiring it to pay nearly half a million dollars for using its own retail gift cards as part of employees’ pay, HRD reports.

The BC Employment Standards Tribunal (BCEST) rejected an appeal to reconsider the scope of the ruling, leaving the bootmaker and retailer owing $484,995 in wages. The company’s sole director has been ordered to pay $446,472. 

'Big misunderstanding'

The case reportedly began in 2020 when two individuals filed a case against Dayton alleging that the company was replacing 50 per cent of employees' wages with its own retail gift cards.

An investigation into the company's wage statements revealed that - beginning in June 2020 - Dayton made deductions from some employees' gross wages and labelled the deductions as "other deductions," then "Dayton Card," and then "Dayton Gift Card,” according to the tribunal’s ruling.

The investigation reportedly found that these deductions were equivalent to "either exactly half or all of the employees' wages."

Dayton's sole director initially argued that the deductions were the company's way of covering the cost of employees' clothing because they were required to wear store products at work.  The owner is said to have claimed that the cost of the clothing was incorporated into the pay structure.

According to the owner, store employees also agreed verbally to be paid a weekly salary of $600 and a weekly merchandise credit of $600.

In addition, Dayton reportedly argued in later proceedings that the issue of wage deductions for gift cards was "just a big misunderstanding and accounting error." The company claimed that the gift cards "were never meant to be wages" and employees "were never intended to receive the gross amount."

Decision and appeal

Dayton Boots was found to have violated four different sections of the Employment Standards Act (ESA) in the case of 71 employees. It was initially ordered to pay wages amounting to $610,417, including interest, as well as an additional $2,000 in administrative penalties.

The company’s sole director was also found "personally liable under section 96" of the ESA and was ordered to pay $545,688, plus an interest amount of $10,349.

Dayton and its owner both reportedly submitted appeals for the determinations, which reduced the amount they need to pay to $484,995 and $446,472.

Both parties subsequently pushed for a reconsideration of the appeal decision on the basis of "new evidence," arguing in the latest hearing that 36 of the 71 individuals were "brand ambassadors" instead of employees.

The tribunal rejected that argument, saying in its decision "the evidence provided throughout the original investigation did in fact point to the… individuals being employees."

According to the BCEST, the new evidence from the parties "does not warrant a new investigation" and the applicants failed to show new significant and pertinent evidence that would make the tribunal reopen the case.

"The applications for reconsideration of the Appeal Decision are dismissed," the BCEST's order said. 

Source: HRD

(Links via original reporting)

In Canada, Vancouver-based Dayton Boots Company has lost its attempt to amend a ruling requiring it to pay nearly half a million dollars for using its own retail gift cards as part of employees’ pay, HRD reports.

The BC Employment Standards Tribunal (BCEST) rejected an appeal to reconsider the scope of the ruling, leaving the bootmaker and retailer owing $484,995 in wages. The company’s sole director has been ordered to pay $446,472. 

'Big misunderstanding'

The case reportedly began in 2020 when two individuals filed a case against Dayton alleging that the company was replacing 50 per cent of employees' wages with its own retail gift cards.

An investigation into the company's wage statements revealed that - beginning in June 2020 - Dayton made deductions from some employees' gross wages and labelled the deductions as "other deductions," then "Dayton Card," and then "Dayton Gift Card,” according to the tribunal’s ruling.

The investigation reportedly found that these deductions were equivalent to "either exactly half or all of the employees' wages."

Dayton's sole director initially argued that the deductions were the company's way of covering the cost of employees' clothing because they were required to wear store products at work.  The owner is said to have claimed that the cost of the clothing was incorporated into the pay structure.

According to the owner, store employees also agreed verbally to be paid a weekly salary of $600 and a weekly merchandise credit of $600.

In addition, Dayton reportedly argued in later proceedings that the issue of wage deductions for gift cards was "just a big misunderstanding and accounting error." The company claimed that the gift cards "were never meant to be wages" and employees "were never intended to receive the gross amount."

Decision and appeal

Dayton Boots was found to have violated four different sections of the Employment Standards Act (ESA) in the case of 71 employees. It was initially ordered to pay wages amounting to $610,417, including interest, as well as an additional $2,000 in administrative penalties.

The company’s sole director was also found "personally liable under section 96" of the ESA and was ordered to pay $545,688, plus an interest amount of $10,349.

Dayton and its owner both reportedly submitted appeals for the determinations, which reduced the amount they need to pay to $484,995 and $446,472.

Both parties subsequently pushed for a reconsideration of the appeal decision on the basis of "new evidence," arguing in the latest hearing that 36 of the 71 individuals were "brand ambassadors" instead of employees.

The tribunal rejected that argument, saying in its decision "the evidence provided throughout the original investigation did in fact point to the… individuals being employees."

According to the BCEST, the new evidence from the parties "does not warrant a new investigation" and the applicants failed to show new significant and pertinent evidence that would make the tribunal reopen the case.

"The applications for reconsideration of the Appeal Decision are dismissed," the BCEST's order said. 

Source: HRD

(Links via original reporting)