People and Payroll

PEOPLE AND PAYROLL: WHAT EVERY RURAL WATER CO-OP SHOULD KNOW

INTRODUCTION

Running a rural water co- op is about a little more than pipes and pumps — it's about people.

At some point, your water co- op will need to decide who does the work (bookkeeping, billing, operations, maintenance) and how to pay them fairly, legally, and transparently.

Many small Alberta rural utility co- ops start out entirely volunteer- run, but as systems age, regulations tighten, and workloads grow, paid help often becomes necessary.

Here's what your Board should know before, during, and after crossing that bridge.

PAYROLL VS CONTRACT: WHAT'S THE DIFFERENCE

You need to ask: Should workers be treated as employees or independent contractors?

Canada Revenue Agency and Alberta Employment Standards look at the actual relationship, not the label. Misclassifying a worker (calling them a contractor when they're really an employee) may lead to financial headaches down the road. The CRA link below should be used:

https://www.canada.ca/en/revenue- agency/services/publications/publications/rc4110/employee- self- employed.html

WHEN DOES A WATER CO-OP NEED TO CONSIDER PAYROLL?

There's no specific threshold; it's about what kind of work is being done and how regularly.

You might need a payroll system when:

• You've hired a system operator to check and maintain infrastructure on a regular basis
• You've brought on a bookkeeper or administrator who handles billing and financial matters on a regular basis
• You pay the same person(s) on a consistent schedule, with money from the water co- op

This is when your water co- op may need to register for a Payroll Account with Canada Revenue Agency (CRA) and start to deduct and remit income tax, CPP and EI, and issue T4s at year- end.

These payroll operations and filings can be completed by a bookkeeping service or software.

WHEN TO HIRE A BOOKKEEPER OR OPERATOR

Let's be realistic, your water co- op might be overdue for some hired help is:

• Member billing, payments and/or deposits are falling behind
• You need someone to manage CRA remittances or manage bank reconciliations
• The Treasurer role has become too time consuming for a volunteer
• Regulatory reporting and inspections require more consistent monitoring
• You need more technical expertise for general maintenance or managing emergencies
• Members are relying on volunteers for skilled work and there are growing gaps in meeting the needs of the water co- op

Hiring part- time or contract help can prevent burnout among volunteers and improve consistency for members.

The Board is responsible for financial stewardship, including how people are paid.

When the Board is making the financial decision to hire someone (whether on payroll or on contract) it should be recorded in the Board minutes and reflected in the budget and year- end financial report.

The Board should consistently outline the job duties and compensation rates for anyone working for the water co- op, and who has the authority to sign agreements with employees or contractors.

Ensure the process for invoicing and payments are clear, as are the terms of employment or contract, and defined before the agreement starts.

BEST PRACTICES

Have written agreements for all paid roles, even if they're short term.

The Board should also budget for training and safety certifications.

Keep payroll and contract records for at least seven years, along with T4s and invoices.

SUMMARY

Getting payroll right is important for legal and financial compliance as well as ensuring your water co- op has the capacity and confidence to serve its members for years to come. When your people are supported and paid properly, your water co- op runs more smoothly — and your members benefit too.