New Owners and Employment Standards Act

If you are a new owner of an ongoing business, you may have some questions about your responsibilities toward the employees already working there.

According to the ESA, if you buy all or part of a business, the employment of the staff should be continuous and uninterrupted by the sale. What follows are a series of questions typically posed by both employees and employers following the sale of an ongoing business.

Q: What wages is the purchasing employer responsible for after the sale of the business?

A: The purchasing employer is responsible for an employee’s wages on the date the business was taken over. Wages that have not been paid by the vendor, such as accrued vacation pay and banked overtime, become the responsibility of the purchasing employer.

Q: What is the impact of an employee’s length of service at the place of business on the purchasing employer’s calculation of wages?

A: If employees continue working for the business with the new employer, that employer is required to recognize employees’ length of service with the previous ownership when calculating minimum entitlements such as vacation pay and compensation for length of service. The new employer must consider the date the employee commenced work at the place of business, not the new purchase date.

Q: How are employees on leave treated when a business is purchased?

A: Employees who are on leave, paid or unpaid, at the time of the sale, transfer, or disposal of the business are still considered to be employees. They must be treated in the same way as employees who are working.

For more information, visit the Government’s Interpretation Manual – Section 97.

Adapted from BC Restaurant News (June/July 2003). Additional information provided by Ryan Anderson, an employment lawyer with Mathews Dinsdale & Clark LLP (March 2013). The information provided in this article is necessarily of a general nature and must not be regarded as legal advice. For more information about Mathews Dinsdale & Clark LLP, please visit