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Posts tagged: minimum wage

Bill 148 – Summary of Changes to the Employment Standards Act and When Each Change is Implemented

By , December 4, 2017 2:24 pm

On November 22, 2017, the Ontario legislature passed the final version of Bill 148- the Fair Workplaces, Better Jobs Act. Below is a summary of some of the provisions of the Act , their dates of implementation and their impact on employers and employees throughout Ontario. We offer a fixed fee service for employers who need help complying with these changes. 

 

Provision Amendment Effective Date
Minimum wage General minimum wage will increase to $14 per hour on January 1, 2018 and $15 per hour on January 1, 2019. There will also be a proportional increase to special minimum wage rates. January 1, 2018: $14/h

January 1, 2019: $15/h

Minimum wage will increase every year going forward subject to an annual inflation adjustment on October 1 of every year starting in 2019

Misclassification of workers An employer who wrongfully classifies a worker as a non-employee (i.e. an independent contractor, or other nonemployee) will now be in contravention of the ESA and subject to penalties.
Note: The burden of proof lies on the employer to show that the person is not an employee.
 November 27, 2017
Equal Pay for Equal Work – No difference in pay rate because of employment status Employers will be prohibited from paying employees at different rates depending on whether they are full-time, part-time, seasonal, etc. unless an exemption applies.

An employee may request a review of their rate of pay from the employer, to which the employer must respond if it disagrees with the employee’s belief that this section has been breached.

Note: The reprisal provisions have been amended to protect employees who avail themselves of this change.

The rule will not apply when the difference in pay rate is made on the basis of: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quality of production; or, any other factor other than sex or employment status.Unionized employers: if a collective agreement (“CA”) that is in effect on April 1, 2018 contains a provision that permits differences in pay based on employment status, and there is a conflict between the provision of the CA and this rule, the provision of the CA prevails until the earlier of the date the CA expires and January 1, 2020.

 April 1, 2018
Equal pay for equal work for assignment employees This new change mandates equal pay for temporary help agency employees:

• equal pay for jobs that are substantially the same but not necessarily identical to   regular employees;

• where performance requires substantially the same skill, effort and responsibility; and,

• when work is performed under similar working conditions.

There are however  exceptions: namely, when the difference in the rate of pay is made on the basis of any other factor other than sex, employment status or assignment employee status.
Unionized employers: if a collective agreement (“CA”) that is in effect on April 1, 2018 contains a provision that permits differences in pay between employees of a client and an assignment employee, and there is a conflict between the provision of the CA and this rule, the provision of the CA prevails until the earlier of the date the CA expires and January 1, 2020.

 April 1, 2018
Holiday Pay Holiday pay will be calculated as the average daily wages earned in the pay period leading up to the holiday instead of the current law which is calculated as wages and vacation pay earned in the four work weeks prior to the week in which the holiday falls, divided by 20.

If the employee was not employed during the pay period immediately preceding a public holiday, the employee’s public holiday pay for the public holiday shall be equal to the amount of regular wages earned in the pay period that includes the public holiday divided by the number of days the employee worked in that period.

January 1, 2018
Substitute holidays The rule on substituted holidays remains but with the new imposition of written requirements for documenting substitutions.
Under the new law, the employer must provide the employee with a written statement outlining: a) the public holiday (on which the employee will work); b) the substitution date; and, c) the date the written statement was provided to the employee. 
 January 1, 2018
Vacation entitlement, pay and timing   A minimum 3 week vacation entitlement to employees whose period of employment is five years or more.

 

There is also a requirement that an employee must pay vacation pay equal to at least, (a) 4 per cent of the wages if the employee’s period of employment is less than five years; or (b) 6 per cent of the wages if the employee’s period of employment is five years or more.

 

Vacation Timing: (i) The vacation must be completed no later than 10 months after the end of the vacation entitlement year for which it is given. (ii) If the employee’s period of employment is less than five years, the vacation must be a two-week period or two periods of one week each, unless the employee requests in writing that the vacation be taken in shorter periods and the employer agrees to that request. (iii) If the employee’s period of employment is five years or more, the vacation must be a three-week period or a two-week period and a one-week period or three periods of one week each, unless the employee requests in writing that the vacation be taken in shorter periods and the employer agrees to that request.

 January 1, 2018
Paid Personal Emergency Leave All employees will be entitled to 10 days off for personal emergencies, the first two of which must be paid.
[Note: Currently, employees who work for employers with less than 50 employees are not entitled to this leave. Also employees are not currently entitled to any paid personal emergency leave.]
Employers retain the right to require evidence of entitlement to these days but are not permitted to require a certificate from a qualified health practitioner.
Qualifying period: The employee must have worked for the employer for at least one week before reaching entitlement for the two paid days. Regardless of overtime pay or shift premiums, the employee will be paid regular wages.
 January 1, 2018
Cancellation Pay – Guaranteed Three Paid Hours Employees are entitled to a minimum of three hours’ pay at their regular rate (i) for being on call (even if they are not called into work) or (ii) if an employer cancels the employee’s shift within 48 hours of the start of that shift.
This amendment includes exemptions in circumstances:

• Beyond the employer’s control – such extreme weather, power failure, etc.

• Where the work is weather dependent and the employer cannot provide work for weather dependent reasons.

• Where the employer requires the employee to be on call for the purposes of ensuring the continued delivery of essential public services.

Unionized employers:

if a collective agreement (“CA”) that is in effect on January 1, 2019 contains a provision that addresses payment when the employer cancels the employee’s scheduled work or on-call period, and there is a conflict between the provision of the CA and this rule, the provision of the CA prevails until the earlier of the date the CA expires and January 1, 2020.

 January 1, 2019
Employees Who Regularly Works Three Hours are Guaranteed Three Paid Hours: Employees who regularly work more than three hours each day must be paid three hours at their regular pay rate if they are required to work and work for less than three hours despite being available to work longer.

Exception: the rule does not apply if the employer is unable to provide work for the employee because of weather, fire, or other similar causes beyond the employer’s control

 January 1, 2019
On-Call Employees – Guaranteed Three Paid Hours: If “on call” employees are not called into work, or are called in but work less than three hours despite being available to work longer, then they must be paid three hours at their regular pay rate, and this is required for each 24-hour on-call period.

Note: Currently an employee who is called into work is entitled to the greater of their wages earned and three hours at the minimum wage.

Exceptions: the rule does not apply if the employer is unable to provide work for the employee because of weather, fire, or other similar causes beyond the employer’s control.

The three-hour rule also does not apply if the employer required the employee to be on call for the purposes of ensuring the continued delivery of essential public services.

January 1, 2019
Right to Refuse – 96 Hour Rule: An employee is now entitled to refuse without repercussion an employer’s request to work or to be on call if the request is made less than 96 hours prior to the commencement of the shift.

Exception: Where the work is to: a) deal with an emergency; b) to remedy or reduce a threat to public safety; c) ensure the continued delivery of essential public services; or d) for such other reasons as may be prescribed.

Note: An “emergency” is this section would refer to a situation or an impending situation that constitutes a danger of major proportions that could result in serious harm to persons or substantial damage to property and that is caused by the forces of nature, a disease or other health risk, an accident or an act whether intentional or otherwise, or  a situation in which a search and rescue operation takes place.

Unionized employers: if a collective agreement (“CA”) that is in effect on January 1, 2019 contains a provision that addresses an employee’s ability to refuse the employer’s request or demand to perform work or be on call on a day the employee is not scheduled to work or be on-call, and there is a conflict between the provision of the CA and this rule, the provision of the CA prevails until the earlier of the date the CA expires and January 1, 2020.

January 1, 2019
Overtime pay when employee has two or more rates of pay If an employee has two or more regular rates for work performed for the same employer in a work week, the employee is entitled to be paid overtime pay for each hour of work performed in the week after the total number of hours performed for the employer reaches the overtime threshold.

Additionally, the overtime pay for each hour is one and a half times the regular rate that applies to the work performed in that hour

January 1, 2018
Right to request changes to schedule or work location Employees with at least three months’ tenure with their employer can request changes to their schedule or work location. Employers who receive these requests must discuss them with the employee and either grant them or provide reasons for their denial. January 1, 2019
Domestic or sexual violence leave An employee, who has been employed by an employer for at least 13 consecutive weeks, is entitled to take a leave of absence if the employee or their child experiences sexual or domestic violence.
The leave can be up to 10 days (taken individually), and up to 15 weeks (intermittently) to a maximum of 17 weeks total. The leave may be taken: to seek medical attention; to obtain services from a victim services organization; to obtain counselling; to relocate; or, to seek legal or law enforcement assistance.
The first 5 days of the leave must be paid
January 1, 2018
Critical-Illness of an Adult Family Member An employee may take leave to provide care and support to any critically ill family member for up to 17 weeks
A qualified health practitioner must issue a certificate that, (a) states that the adult is a critically ill adult who requires the care or support of one or more family members; and (b) sets out the period during which the adult requires the care or support.
December 3, 2017
Pregnancy and parental leave Pregnant employees with at least 13 weeks service will be entitled to 18 months pregnancy and parental leave
Amendments will extend the leave for employees who suffer a stillbirth or miscarriage from 6 to 12 weeks.
The length of parental leave is extended from 35 to 61 weeks if the employee took a pregnancy leave and from 37 to 63 weeks for employees who did not. An employee may commence parental leave no later than 78 weeks (previously 52) after the day the child is born or comes into the employee’s care or custody for the first time.
December 3, 2017

 

January 1, 2018

 

 

December 3, 2017

 

 

 

 

Family medical leave Increased leave from 8 to up to 28 weeks of leave. Expansion of the definition of “qualified health practitioner” to now include certain registered nurses or individuals with equivalent qualifications, and, in some circumstances a member of a prescribed class of health practitioners January 1, 2018
Termination of temporary agency assignment employees Temporary help agencies must now provide an assignment employee with one week’s written notice or pay in lieu, if an assignment that was estimated to last for three months or more, is terminated before the end of its estimated term, unless another assignment lasting at least one week is offered to the employee. January 1, 2018
Record Keeping A larger list of recordkeeping requirements has been imposed, which will be coming into force on varying dates:

– Dates and hours worked.

– Where an employee has two or more regular rates of pay, the dates and times that the employee worked in excess of the overtime threshold at each rate of pay.

– Records of substitute holidays (mentioned above).

– Retention of documents for all leaves. – Record-keeping of vacation pay and vacation time.

– Record retention for 5 years instead of 3

January 1, 2018
Record Keeping Requirements for Employers with On-Call Employees Employers with on-call employees:

– Dates and times of work and on-call schedules, and any changes made to oncall scheduling

-Dates and times of cancellations of a scheduled day of work or scheduled on-call period.

January 1, 2019
Record Keeping Requirements for Temporary Help Agencies. Temporary help agencies must:

– record the number of hours worked by each assignment employee for each client of the agency in each day and each week; and
-retain a copy of any written notice provided to the employee upon termination of an assignment.

January 1, 2018
Footwear with elevated heel under the Occupational Health and Safety Act (“OHSA”). A new section is added to the OHSA stating that an employer shall not require a worker to wear footwear with an elevated heel unless it is required for the worker to perform his or her work safely. An exception to this prohibition is made for employers or performers in the entertainment and advertising industry. November 27, 2017


The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

Turning the Page and Upping the Wage: Some Changes to the Employment Standards Act

By , February 10, 2015 12:40 am

Bill 18, the Stronger Workplaces for a Stronger Economy Act, 2014 received Royal Assent last year but certain sections did not take effect immediately.

Schedule 2 of Bill 18 sets out amendments to the Employment Standards Act (the “ESA”). This blog summarizes some of these legislative changes as they will take effect chronologically in 2015.

1. The Monetary Limits for an ESA Complaint Increases: Starting February 20, 2015, there will be no limit on the amount of money an Employment Standards Officer can order an employer to pay for wages that become due to an employee. Wages include termination pay and severance pay. This change will significantly benefit long-service employees who work for an employer with a payroll of over $ 2 500 000 and who secure alternative employment shortly after being terminated. For example, an employee with 26 years service earning $ 100 000 a year can file a no cost claim under the ESA for termination pay and severance pay totaling $ 65 384.62. Prior to this change, the maximum order that could have been issued was generally $ 10 000.

2. The Time Limit for Filing a Complaint under the ESA Increases: Starting February 20, 2015, an employee will have two years to file a complaint under the ESA. We believe this will result in more complaints being filed under the ESA. What are the implications for employers? Employers should start keeping better records- including internal documents that confirm when vacation is taken and when people work overtime. The current time limit is generally 6 months.

3. Employers Must Provide Employees with a ESA Poster: Within 30 days of May 20, 2015 in most situations an employer will be required to provide every employee with a copy of the most recent poster published by the Minister of Labour under the Employment Standards Act (ESA). A copy of this poster is found here. Failure to comply could result in a compliance order or a fine or a prosecution under the Provincial Offences Act.

4. The Minimum Wage Increases: Starting October 1, 2015 the minimum wage will automatically increase on October 1st each year. The increase is tied to the Consumer Price Index. This change will benefit, among others, students and workers in the retail sector.

5. Employers are Liable for Temporary Help Agencies Obligations: Effective November 20, 2015, a temporary help agency and the employer are jointly and severally liable for wages owing if the temporary agency fails to pay the employee some or all of the wages owing. In other words, an employer can be ordered to pay a temporary worker his or her wages even if the employer has already paid his or her wages to the temporary agency. We therefore recommend that an employer only use reputable, and well-financed temporary help agencies.

For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him directly at 416 317-9894 or at [email protected]

Employee Payroll Costs in Ontario: Nowhere to Go but Up

By , July 17, 2014 12:03 pm

The Minimum Wage is Increasing

On June 1, 2014 the minimum wage increased to $ 11 per hour for most employees. A momentous increase for employers? Perhaps not. But let’s take a look at the bigger financial picture; the cost of employing a person in Ontario is more than the person’s salary or wages.

A Mandatory Pension with an Employer Contribution is coming

Employers are not currently required to provide any employee benefits. However, it appears that the tables are turning. On July 14, 2014,the Ontario government announced an intention to create an Ontario Retirement Pension Plan “to help working families build a more secure retirement.” The proposed plan requires workers to contribute 1.9 per cent of their earnings up to $90,000, matched by a 1.9 per cent contribution from employers.

The Ontario Retirement Pension Plan, if passed into law, will be mandatory for the more than three million Ontarians without a workplace pension plan.

The $ 64, 000 Question: Employee or Independent Contractor?

Employers currently have two options when it comes to payroll costs: absorb ancillary wage costs (which are on an upward trajectory) or save these costs by contracting out certain business functions to a consultant.

When answering this question, employers need to consider the totality of all payroll costs.  To that end, this blog outlines some of the ancillary payroll costs that an employer must pay in addition to an employee’s salary or wages.

1. Payroll taxes

 Employment Insurance

Employers are generally required to deduct and remit the employee and employer contributions to the employment insurance commission.

In 2014, the employee’s contribution is 1.8 % of wages up to $48 600 or a maximum contribution of $ 913.68 per year.

The employer’s contribution (or additional payroll cost) is 1.4 of the employee’s contribution up to $ 48 600 or a maximum contribution of $ 1,279.15per year.

2. Canada Pension Plan

Employers are generally required to deduct and remit the employee and employer contributions to the Canada pension.

In 2014, the employee’s contribution is 4.95 % of wages up to $ 49 000 or a maximum contribution of $ 2425.50 per year.

The employer’s contribution (or additional payroll cost) is also 4.95 % of wages up to $ 49 000 or a maximum contribution of $ 2425.50 per year

3. Workers Compensation

Employers who are covered by the Workplace Safety & Insurance Act are required to pay premiums to the WSIB. The amount of premiums (or payroll tax) depends on the nature of the employer’s business. For example, the rate for employers in auto vehicle assembly is $ 3.59 per $ 100 earnings up to $ 84,100 or up to $ 3019.19 per year.

4. Employer Health Tax

Employers are required to pay up to 1.95 % of Ontario payroll as an employer health tax. No tax is payable on the first $ 450 000 of compensation.

Mandatory Paid Unproductive Time

An employee is entitled to receive two weeks paid vacation each year and vacation pay is generally calculated as 4% of the employee’s wages in a vacation year minus vacation pay received in that year.

An employee is generally entitled to 9 paid statutory holidays which is approximately equal to 4% of the employee’s wages.

Employers are also required to provide mandatory training to employees. In 2012, a new law required training under the Accessibility for Ontarians with Disabilities Act for employers with 20 or more employees, and by July 1, 2014 employers should have provided mandatory health & safety training to its employees.

The Cost of Terminating an Employee

An employee is generally entitled to a minimum amount of notice of termination. Employers rarely provide an employee with notice of termination so the employer is required to provide pay in lieu of this notice. The amount this termination pay depends on the employee’s years of service and whether the employee has signed an employment contract with a termination clause. An employee with more than 8 years service is generally entitled to between 8 and 104 weeks termination pay depending on whether there is a termination clause in an employment contract. That’s right. 104 weeks.

An employee is generally entitled to at least 5 weeks severance pay if the employee has worked more than 5 years and the employer’s payroll exceeds $ 2.5M.

The cost of payroll taxes

 An employer with an Ontario payroll of over $ 850 000 in the auto vehicles assembly business pays $ 6474.65 payroll taxes each year for an employee earning $ 50 000 (i.e  $ 1,279.15 for EI, $ 2425.50 for CPP, $ 1795 for WSIB, and $ 975 EHT).

In addition the employer is required to pay a minimum of $ 2 000 in vacation pay and $ 1730.77 in statutory holiday pay for a total of $ 10 205.42 which is about 20% of the employee’s salary.

If the Ontario Retirement Pension Plan comes into effect as proposed then this amount will increase by $ 975 per year.

How to Avoid Payroll Costs

As mentioned previously, one way to avoid payroll costs is to contract out certain work to a consultant. An organization is not required to pay payroll taxes on a consultant’s compensation or provide paid vacation or pay for statutory holiday. An employer must, however, be very careful when doing so because the Canada Revenue Agency (CRA) carefully reviews these arrangements. If the CRA concludes the consultant is really an employee then the CRA will order the employer to pay EI and CPP premiums on the consultant’s income. The CRA generally applies a four part test when determining whether a person is an employee or an independent contractor. The same test is generally applied by the Workers Compensation Board in connection with workers’ compensation premiums, and the Minister of Finance in connection with the Employer Health Tax. If an employer carefully considers the nature of the work and ensures that a consulting arrangement passes the four part test then an employer can save the above noted payroll costs.

For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on whether to hire employees or retain consultants to perform certain business functions. You can contact him at 416 317-9894 or at [email protected]

 

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