Employers may soon be able to distribute T4 (Statement of Remuneration Paid) slips electronically to active employees without having obtained advance express consent from those employees. Employers are currently required to provide paper copies of T4 information slips to employees unless specific consent has been provided by the employee to receive such T4 slips electronically. The recently-announced federal budget for 2017-2018 includes proposed amendments to the Income Tax Act (Canada) that would allow employers to now default to electronic T4 distribution.
For employers this could mean:
- reduced compliance costs;
- increased efficiencies for employers; and
- increased convenience for employees.
Employers will be required to have appropriate privacy safeguards in place before they will be able to distribute electronic T4 slips without express consent. It is expected that specific safeguards will be outlined by the Minister of National Revenue, and may include requirements to provide paper T4s where employees are not able to confidentially access and print their T4 slips, or to employees who request paper slips.
The ability for employers to rely on the above measure is expected to apply for the 2017 and future tax years.
In addition to satisfying any safeguards specifically outlined by the Minister of National Revenue, employers will also need to ensure that :
- the electronic distribution of T4 slips is in accordance with the employer’s obligations under any applicable privacy laws and best practices; and
- the appropriate steps are taken to minimize any cyber security risks relating to electronic distribution.
Employers may wish to consult experienced legal counsel to review any proposed electronic distribution of T4 slips to ensure that appropriate privacy and other safeguards are in place to minimize associated risks.