Should You Consider a 4 Day Work Week?

Both employers and employees have been shown to benefit from a 4-day work week, but that doesn’t mean it’s the ideal framework for every organization – especially in a remote working environment. Your industry, pay structure, and region of employment will all need to be taken into account when considering whether a shortened work week is the right move for your business.

Benefits for Employees

Who wouldn’t welcome the opportunity to spend more time with family and friends, pursue a hobby, learn a new skill, or help out in the local community? One recent survey indicated that 88% of Canadians would say yes to a 4-day work week if it was offered to them – so long as it meant no change to their pay.

When staff were given the option of working four days a week instead of the traditional five as part of an impactful corporate experiment in New Zealand in 2018, the results were impressive:

  • Work-life balance jumped from 54% to 78%
  • Employee stress levels dropped from 45% to 38%, and
  • Overall productivity increased by 20%

A number of studies worldwide have concluded that employees are more engaged and enthusiastic about their jobs when their work week includes a 3-day weekend. So it’s not surprising that, in addition to NZ, countries like Japan and the UK have recently considered making a 4-day work week the new normal.

Benefits for Employers

Some industries – like brick and mortar retail, restaurants, and real estate services, for example – clearly don’t lend themselves to a 4-day work week.

Similarly, if yours is a salary-based business, reducing the number of working days each week probably won’t make much of an impact on personnel or corporate culture.

But for companies that follow a traditional 40-hour work week spread over five days, switching to four 10-hour workdays can do more than boost employee satisfaction and ramp up productivity. It’s been shown to yield solid benefits like:

  • Improved employee time management
  • More effective team building, and
  • Lower overhead costs in terms of workspace utilities and maintenance

Bear in mind, however, that depending on which part of Canada your employees work in, making the change to a 4-day work week could have certain payroll consequences for your business.

Canadian Payroll and the 4-Day Work Week

Different provinces have different payroll legislation governing things like overtime, vacationable earnings, and pay for stat holidays.

Because switching to a shorter work week often means cramming more work hours into fewer days – and doing away with certain workable stat holidays – your company’s payroll requirements could change if you opt for a 4-day work week.

In Ontario, for example, overtime is calculated at 1.5 times an employee’s regular hourly rate after 44 are worked in a week.

In BC, on the other hand, there’s both a daily and a weekly overtime rule:

  • Daily work is paid at 1.5 times after 8 hours, and 2 times after 12 hours
  • Weekly work is paid at 1.5 times after 40 hours

And if yours is a unionized environment, there may be an entirely different set of work and pay-related requirements or restrictions to take into account.

That said, the advantages and desirability of a flexible work structure in today’s employment environment are noteworthy. And given that hiring and retaining the right talent will benefit your business over the long term, offering a shorter work week might make sense.

Just be sure you seek help from an accountant or qualified payroll expert if you’re considering taking the 4-day work week out for a spin.