On November 20, 2014, the Stronger Workplaces for a Stronger Economy Act, 2014 (formerly Bill 18), became law (received royal assent) in Ontario. The Act makes a number of significant changes to employment law that will come into force over the following months.
The minimum wage will now be tied to the Consumer Price Index (i.e., inflation) and will take effect on October 1 of each year, starting in 2015. The Ministry of Labour must announce and publish the new minimum wage before April 1. Notwithstanding negative changes to the CPI, the minimum wage cannot be decreased as a result of the indexing calculation set out in the legislation.
In addition, before October 1, 2020, and every five years thereafter, the minister must cause a review of the minimum wage and the process for adjusting the minimum wage.
New Employment Standards Act poster requirement
Effective May 20, 2015 (six months after royal assent), employers will be required to provide individual copies of the Ministry of Labour informational poster to each employee. The poster must be provided within 30 days of the day the employee becomes an employee of the employer. If the employee is already employed when the law comes into force, the employer must provide his or her employees with a copy of the poster within 30 days of that day.
The current requirement to post the most recent version of the poster in the workplace remains in place.
Additionally, when an employer requests the poster in a different language, must make enquiries as to whether the minister has prepared a translation of the poster into that language, and if the minister has done so, the employer shall provide the employee with a copy of the translation.
This requirement ensures employees know and understand their rights and entitlements under the ESA at the beginning of the employment relationship.
New ESA enforcement tool: self-audits
New self-audit provisions in the Employment Standards Act (ESA) will also come into effect six months after the date of royal assent (May 20, 2015).
Under the new section 91.1 of the ESA, an employment standards officer may, by giving written notice, require an employer to conduct an examination of the employer’s records, practices or both to determine whether the employer is in compliance with one or more provisions of the Act or the regulations. The section sets out the rules that govern these employer self-audits. These include the following.
- If an employer is required to conduct a self-audit, the employer will conduct the examination and report the results of the examination to the employment standards officer in accordance with the notice and the requirements of this section.
- If an employer’s report includes an assessment that the employer owes wages to one or more employees, or that the employer has otherwise not complied with the ESA or the regulations, and the employment standards officer determines that the employer’s assessment is correct, the officer may issue an order as the officer determines is appropriate.
- No employer will provide a report required under this section that contains information that the employer knows to be false or misleading.
- This provision provides officers with wide power to customize the self-audit and may delineate the scope of records, types of contraventions, method of investigation and format of the report.
- Nothing in this section precludes an employment standards officer from conducting an investigation or inspection, and from taking any other enforcement action under the ESA as the officer considers appropriate.
This requirement will ensure employers have familiarized themselves with the law and are complying with it.
New ESA maximum cap on orders and limitation periods
Amendments to erase the previous $10,000 maximum cap on orders for unpaid wages to an employee under the ESA became law November 20, 2014. There is no longer a monetary limit on employment standards officers’ orders for wages, and employees will no longer be forced to pursue larger claims through the courts, saving both workers and businesses time and money.
Additionally, amendments increase the time limits on when an employee can file a complaint to recover unpaid wages to two years from six months. The time limit within which vacation pay can be recovered under the Act is now 12 months, rather than six months.
These new provisions will come into effect three months after royal assent (February 20, 2015, but include a two-year transition period based on claims arising before the provisions take effect.
It is expected employees will choose to file more ESA complaints for unpaid wages then go to court.
Employment protection for foreign persons expanded
The amendments extend employment protection for foreign persons working in Ontario under the Employment Protection for Foreign Nationals Act (Live-in Caregivers and Others), 2009 (EPFNA).
The newly amended EPFNA will come into force one year from the date of assent (November 20, 2015) and will apply to all foreign nationals working in Ontario pursuant to an immigration or foreign temporary employee program, not just live-in caregivers and some others.
There will also be expanded obligations on the Director of Employment Standards to publish, and on employers to make available, information pertaining to the rights of a foreign temporary worker.
- The title of the Act is repealed and replaced with Employment Protection for Foreign Nationals Act, 2009.
- The Act is amended to expand its application from foreign nationals employed in Ontario as live-in caregivers to foreign nationals employed in Ontario or attempting to find employment in Ontario. Several provisions are amended to reflect this change.
- Section 12 of the Act is amended to provide for the preparation and publication by the Director of Employment Standards of different categories of documents for different categories of foreign nationals and their employers. In addition, the director will prepare and publish a document providing such information about the rights and obligations of employees and employers under the ESA as the director considers of particular relevance to foreign nationals and their employers, and such other information as the director considers appropriate.
- Subsection 50(1) of the Act is amended to allow the lieutenant-governor-in-council to make regulations providing that an employer may recover certain prescribed costs and requiring that an employer of a foreign national give notice of the beginning and end of the foreign national’s employment in a written or electronic form approved by the person or body, and to provide such other information as is required by the Regulation.
- A person who employs or has employed a foreign national must give him or her a copy of the most recent documents published by the Director of Employment Standards under section 12 before the employment commences if the employer did not use the services of a recruiter in connection with the employment. If the employee is already employed, the documents must be given as soon as practicable.
- If a recruiter contacts or is contacted by a foreign national in connection with employment, the recruiter must give the foreign national a copy of the most recent documents published by the director under section 12 as soon as is practicable after first making contact with him or her.
- Employers are prohibited from charging fees and seizing personal documents like passports from temporary foreign workers.
New ESA temporary help agencies provisions
Bill 18 makes a number of significant changes to the ESA regarding temporary help agencies and assignment employees. These amendments will come into force November 20, 2015.
- The new sections 74.4.1 and 74.4.2 of the Act require temporary help agencies and their clients to record the number of hours worked by each assignment employee for each client of the agency in each day and each week in addition to all other information that an employer is required to record under Part VI of the Act. The records are required to be kept for three years after the day or week to which the information relates. The temporary help agency will ensure that the records required to be retained are readily available for inspection as required by an employment standards officer, even if the agency has arranged for another person to retain them.
- A client of a temporary help agency must record the number of hours worked by each assignment employee assigned to perform work for the client in each day and each week. The client will retain or arrange for some other person to retain the hours of work records for three years after the day or week to which the information relates. The client will ensure that the records required to be retained are readily available for inspection as required by an employment standards officer, even if the agency has arranged for another person to retain them.
- The new section 74.18 of the Act makes a temporary help agency and its client jointly and severally liable for unpaid wages owing to an assignment employee. Wages for which a client may be liable include: 1) regular wages that were earned during the relevant pay period, and 2) overtime pay that was earned during the relevant pay period. Amendments were made and approved to Bill 18 to include public holiday pay and premium pay in the list of wages for which a client of a temporary help agency may be jointly and severally liable under the proposed new section 74.18 of the Employment Standards Act in addition to regular wages and overtime pay.
- If an assignment employee was assigned to perform work for more than one client of a temporary help agency during a pay period, and the agency fails to pay the employee some or all of the wages described above that are owing to the employee for that pay period, each client is jointly and severally liable with the agency for a share of the total wages owed to the employee that is in proportion to the number of hours the employee worked for that client during the pay period relative to the total number of hours the employee worked for all clients during the pay period.
- Despite the above requirements, the temporary help agency is primarily responsible for an assignment employee’s wages, but proceedings against the agency under this Act do not have to be exhausted before proceedings may be commenced to collect wages from the client of the agency.
- For the purposes of enforcing the liability of a client of a temporary help agency under the Act, the client is deemed to be an employer of the assignment employee.
The Stronger Workplaces for a Stronger Economy Act will amend the Labour Relations Act (LRA) by decreasing the open period for decertification or displacement application in the construction sector to two months. The previous open period was three months in length. This change will take effect May 20, 2015.
Under the new LRA subsection 132(3), applications to the Labour Relations Board for a declaration that a trade union no longer represents the employees in a bargaining unit may occur under these conditions:
(a) In the case of a collective agreement for a term of not more than three years, only after the commencement of the last two months of its operation;
(b) In the case of a collective agreement for a term of more than three years, only after the commencement of the 35th month of its operation and before the commencement of the 37th month of its operation and during the two-month period immediately preceding the end of each year that the agreement continues to operate thereafter or after the commencement of the last two months of its operation, as the case may be; and
(c) In the case of a collective agreement referred to in clause (a) or (b) that provides that it will continue to operate for any further term or successive terms if either party fails to give to the other notice of termination or of its desire to bargain with a view to the renewal, with or without modifications, of the agreement or to the making of a new agreement, only during the last two months of each year that it so continues to operate or after the commencement of the last two months of its operation, as the case may be.
Other changes apply if a trade union and an employer have entered into a collective agreement:
- The new section 127.3 of the LRA applies to the construction industry and establishes two-month open periods during which a trade union may apply to the Labour Relations Board for certification as bargaining agent of any employees in a bargaining unit. Where the collective agreement is for a term of not more than three years, another trade union may apply to the board for certification as bargaining agent of any of the employees in the bargaining unit defined in the agreement only after the commencement of the last two months of its operation.
- Where the collective agreement is for a term of more than three years, another trade union may apply to the board for certification as bargaining agent of any of the employees in the bargaining unit defined in the agreement only after the commencement of the 35th month of its operation and before the commencement of the 37th month of its operation and during the two-month period immediately preceding the end of each year that the agreement continues to operate thereafter, or after the commencement of the last two months of its operation, as the case may be.
- Where a collective agreement referred to in subsection (2) or (3) provides that it will continue to operate for any further term or successive terms if either party fails to give to the other notice of termination or of its desire to bargain with a view to renewal, with or without modifications, of the agreement or to the making of a new agreement, another trade union may apply to the board for certification as bargaining agent of any of the employees in the bargaining unit defined in the agreement during the further term or successive terms only during the last two months of each year that it so continues to operate, or after the commencement of the last two months of its operation, as the case may be.
Health and safety
Occupational health and safety changes
Effective November 20, 2014, schedule 4 of the Stronger Workplaces for a Stronger Economy Act amends the Occupational Health and Safety Act (OHSA) by changing the definition of “worker” in subsection 1(1) as follows:
“Worker” means any of the following, but does not include an inmate of a correctional institution or like institution or facility who participates inside the institution or facility in a work project or rehabilitation program:
- A person who performs work or supplies services for monetary compensation
- A secondary school student who performs work or supplies services for no monetary compensation under a work experience program authorized by the school board that operates the school in which the student is enrolled
- A person who performs work or supplies services for no monetary compensation under a program approved by a college of applied arts and technology, university or other post-secondary institution
- A person who receives training from an employer, but who, under the Employment Standards Act, 2000, is not an employee for the purposes of that Act because the conditions set out in subsection 1(2) of that Act have been met
- Such other persons as may be prescribed who perform work or supply services to an employer for no monetary compensation
This change makes it clear that those individuals who are not paid for work done for, or services provided to, the employer (i.e., interns, co-op students, trainees etc.) are covered under the OHSA. The Ministry of Labour has indicated that volunteers are not covered by this new definition of worker.
Consequently, unpaid workers have the same rights and duties as paid workers under the OHSA, including the right to know about workplace hazards and to refuse unsafe work. This also means unpaid workers must comply with health and safety legislation and regulations regarding operating equipment safely and reporting workplace hazards, accidents or contraventions to their employer or supervisor. As an additional result, if they are injured in the workplace, they may receive Workplace Safety and Insurance Board (WSIB) benefits.
Workplace safety and insurance
The Stronger Workplaces for a Stronger Economy Act will introduce several changes to the Workplace Safety and Insurance Act (WSIA). However, these changes will only come in effect on a day to be named by proclamation of the lieutenant-governor.
Changes include adding a definition of “temporary help agency” which includes businesses that primarily lend or hire out the services of their workers to other employers on a temporary basis for a fee.
Section 83 of the WSIA is amended so that if, in certain circumstances, a temporary help agency lends or hires out the services of a worker to another employer and the worker sustains an injury while performing work for the other employer, the other employer is responsible for the injury.
For the purposes of this section the WSIB will:
a) Deem the total wages that are paid in the current year to the worker by the temporary help agency for work performed for the other employer to be paid by the other employer;
b) Attribute the injury and the accident costs arising from the injury to the other employer; and
c) Increase or decrease the amount of the other employer’s premiums based upon the frequency of work injuries or the accident costs or both.
Currently, if a temporary help agency worker is injured, the injury and related accident costs do not affect the client employer’s premium or WSIB experience rating programs, but rather they negatively affect the temporary help agency’s premium. The legislation will encourage client employers to provide and maintain safe and healthy working conditions for all workers in their workplaces, including temporary help agency workers.
The current situation creates a potential incentive for client employers to “contract out” unsafe work to temporary help agencies. The amendment will place the experience rating costs on the client employer and eliminate the incentive for contracting out unsafe work.
The WSIA will also allow the lieutenant-governor-in-council to make certain regulations respecting the attribution of injury costs and reporting requirements to temporary help agencies and the employers who use their services.
What needs to be done?
Employer should inform their employees, supervisors and managers about the changes and the impact of those changes on their business and human resources management. Lawyers and in-house counsel should advise clients how the above provisions will affect the way their clients do business and manage personnel and ensure that they remain compliant with affected employment related legislation.
Employers should prepare for the changes and reassess their policies, practices and procedures including conducting a self-audit to ensure they are already complying with the law, and make the required adjustments due to the changes. Self-audits should become a regular practice at the workplace regardless of the Ministry of Labour possible request for one. This will ensure that management understands their obligations under the law, know of changes they need to apply and prepare them for a Ministry of Labour inspection or request for a self-audit.
If the employer is in the habit of using temporary help agencies to find employees, documentations between the temp agency and the employer-client should be reviewed with respect to the upcoming changes and increased liability. For example, employer-clients should consider amending contracts to include an indemnity clause in case the employer-client is sued for unpaid wages arising out of the temp agency failing to pay the assignment employee’s wages. They should also ensure that the temp agency is maintaining the required records regarding hours of work among others; these records should also be kept by the employer.
Employers should ensure that managers/supervisors provide the most current version of the ESA poster within 30 days of hire, and that it is part of their orientation and training period.
This is my last post before the holidays. Happy Hanukkah! I also wish everybody a very Merry Christmas. If you do not celebrate the Jewish or Christian holidays, I hope you enjoy your time off! Furthermore, have a very Happy New Year! See you in 2015!