A Glance at ESA and OHSA Requirements Under Bill 148 With Implementation Dates

On November 27, 2017, the Fair Workplaces, Better Jobs Act, 2017 (Bill 148) received royal assent and is now law. Bill 148 makes significant amendments to Ontario’s Employment Standards Act, 2000, Labour Relations Act, 1995 and the Occupational Health and Safety Act. The amendments are significant and have various implementation dates. This article deals with providing a timeline for provisions in force from the date of assent to January 1, 2019 under Ontario’s Employment Standards Act, 2000 (ESA) and the Occupational Health and Safety Act (OHSA). Changes to the Labour Relations Act, 1995 will be dealt with in a separate article next week.

1. Amendments and new provisions that are now in effect (on assent)

Changes to the Occupational Health and Safety Act:

Effective November 27, 2017, the requirement to wear high heels in some workplaces is now considered a workplace health and safety issue. The issue is that there is a risk of physical injury from slipping or falling, as well as possible damage to the feet, legs and back from prolonged wearing of high heels while at work. Therefore, under section 25.1 (1) of OHSA, employers can no longer require workers to wear footwear with an elevated heel (i.e., high-heeled shoes) unless it is required for the worker to perform his or her work safely. Exceptions are made for workers in the “entertainment and advertising industry,” which includes the production of a live or broadcast performance or visual, audio or audio-visual recordings of performances.

Employment Standards Act explicit ban on mislabelling independent contractors:

Many employers try to find alternative employment arrangements as a means to reduce payroll costs. One such alternative is to hire “independent contractors” as opposed to employees. Effective November 27, 2017, there is now an explicit ban on treating employees as independent contractors for the purposes of the ESA. The burden of proof will shift to employers to demonstrate that any independent contractors they do business with are not in fact employees under the ESA, if, during the course of an employment standards officer’s investigation or inspection or in any proceeding under the ESA, other than a prosecution, an employer or alleged employer claims that a person is not an employee. According to the government, this is intended to address cases where employers improperly treat their employees as if they are self-employed and not entitled to the protections of the ESA.

Mischaracterizing an employee as an independent contractor could result in liabilities because of non-compliance with the ESA, including:

  • Unpaid wages resulting from overtime, minimum wages, holiday pay, vacation pay, etc.
  • Notice of termination and severance pay.

2. Amendments and provisions that are in force December 3, 2017

New critical illness leave:

Currently, employees who have been employed for at least six months are entitled to a 37-week critically ill child care leave to provide care or support to a critically ill child. Employees eligible for this leave are entitled to Employment Insurance (EI) benefits for parents of critically ill children. On December 3, 2017, ESA’s critically ill child care leave will be replaced with a new critical illness leave which consists of the following:

  • A leave of up to 37 weeks (in a 52-week period) to provide care for a critically ill child under the age of 18. The total amount of leave that may be taken by one or more employees under this section in respect of the same critically ill minor child is 37 weeks; and
  • A leave of up to 17 weeks to provide care or support to a critically ill family member (over the age of 18). The total amount of leave that may be taken by one or more employees under this section in respect of the same critically ill adult is 17 weeks.

To be eligible for critical illness leave, employees must be employed for at least six months and have a medical certificate from a qualified health practitioner that,

  • states that the minor child or adult is critically ill minor child or adult who requires the care or support of one or more family members; and
  • sets out the period during which the minor child or adult requires the care or support.

The employee is entitled to take a leave for the maximum number of week allowed in the ESA but leave will be granted only for the number of weeks in the period specified in the medical certificate.

“Critically ill,” with respect to a minor child or adult, means a minor child or adult whose baseline state of health has significantly changed and whose life is at risk as a result of an illness or injury.

Effective December 3, 2017, a new EI caregiving benefit is introduced to give eligible caregivers up to 15 weeks of EI benefits in a 52-week period while they are temporarily away from work to support or care for critically ill or injured adult family members.

There is a current EI benefit to provide income support for eligible parents or family members (effective December 3, 2017) caring for a child (under 18 years of age) with a critical illness or injury. EI benefits are for a maximum of 35 weeks within a 52-week window.

Extended parental leave:

Entitlement to parental leave will increase to 61 weeks (effective December 3, 2017, previously 35 weeks) without pay for employees (birth mothers) who took pregnancy leave and a period of 63 weeks (effective December 3, 2017, previously 37 weeks) without pay for all other eligible employees, and must start within 78 weeks (effective December 3, 2017, previously 52 weeks) of the day on which the child was born or came into the employee’s custody, care and control for the first time. Employees are only entitled to this extended parental leave if the child is born or comes into their custody, care and control after December 3, 2017. As a result, employees currently on parental leave will not have the benefit of this extended leave. Also, an employee may begin parental leave no later than 52 weeks after the day the child is born or comes into the employee’s custody, care and control for the first time if that day was before December 3, 2017.

The total amount of parental leave that may be taken by two employees for the same birth or adoption is 63 weeks, effective December 3, 2017 (previously 37 weeks).

The parental leave changes were made to align with federal changes to Employment Insurance parental benefits. Effective December 3, 2017, parental EI benefits become more flexible as well. Parents of newborns and adoptive parents will be allowed to choose between two options (standard or extended parental benefits) for receiving EI parental benefits at the time of application.

  • Option 1: Standard parental benefits – The employee and the other parent can receive EI parental benefits for up to 35 weeks, which can be divided however they choose. The 35 weeks must be in the 12 months after the child is born or adopted. The employee will receive 55 percent of his or her individual average weekly earnings to a maximum amount for each week of paid benefits.
  • or

  • Option 2: Extended parental benefits – The employee and the other parent can receive EI parental benefits for up to 61 weeks, which can be divided however they choose. The 61 weeks must be in the 18 months after the child is born or adopted. The employee will receive 33 percent of his or her individual average weekly earnings, to a maximum amount for each week of paid benefits.

3. Amendments and provisions that are in force January 1, 2018

Minimum wage increase:

The minimum wage will increase to $14 an hour on January 1, 2018. The student rate will be $13.15. The liquor server rate will be $12.20 and the homeworker rate will be $15.40.

Vacation increase with length of service:

Currently, the ESA allows two weeks of vacation per year with 4 percent vacation pay with no requirement to increase because of length of service. Effective January 1, 2018, employees with five or more years of service on January 1, 2018, will be entitled to three weeks of vacation time and six percent vacation pay. In addition, employers will be required to retain records related to vacation for a period of five years instead of the current three.

Public holiday pay formula changes:

The current formula for the calculation of public holiday pay will be amended. Currently, public holiday pay is based on regular wages the employee earned and any vacation pay that was payable in the four workweeks prior to the workweek in which the public holiday fell, divided by 20, which did not necessarily amount to an employee’s regular daily earnings. The formula effectively prorates holiday pay for employees who work less than five days per week. The amendment to the formula effective January 1, 2018, is designed to better ensure that the calculation reflects an employee’s regular wages that he or she would have earned but for the holiday. The new calculation divides the total amount of regular wages earned in the pay period immediately preceding the public holiday by the number of days actually worked in that pay period to earn those wages.

In addition, employers who provide a substitute holiday to an employee will be required to provide written confirmation of that substitution. And certain payments to employees will be excluded from regular wages used to calculate public holiday pay, such as public holiday pay, premium pay, vacation pay, domestic or sexual violence leave pay, personal emergency leave pay, termination pay, severance pay and termination of assignment pay and entitlements under a provision of an employee’s contract of employment .

Clarification and expansion of the related employer provision of the ESA:

Under the Ontario Employment Standards Act, companies or persons may be treated as jointly and severally liable for any contravention of the ESA if, in effect, associated or related activities or businesses were carried on by or through an employer and one or more other persons with the intent or effect of defeating the intent and purpose of the ESA. The “intent or effect” requirement of the related employer test will be removed from the ESA. As a result, two employers may now be found to be “related employers” simply because they carry on related businesses or activities. Many business models that are not currently considered “related” for the purposes of the ESA, such as franchising arrangements or parent-subsidiary relationships, may be subjected to increased scrutiny from the Ministry of Labour or complaints from employees they do not even employ. A finding of joint or related employer status can leave franchisors exposed to claims by franchisee employees for unpaid wages, overtime, vacation pay, benefits, termination notice, pay in lieu of notice, severance pay, wrongful and constructive dismissal, human rights violations and payroll taxes.

Extended personal emergency leave:

Currently, the ESA requires employers with 50 or more employees to provide 10 unpaid days of emergency leave per calendar year. Effective January 1, 2018, personal emergency leave will be available to all employees, not just employees of employers who regularly employ 50 or more employees. On that same day, personal emergency days will still consist of 10 days each calendar year, but eight of those days will be unpaid and two will be paid provided that the employee has been employed by the employer for more than one week. The paid days will have to be taken before any unpaid days. The reasons for the leave remain the same (i.e., personal illness, injury or medical emergency, or death, illness, injury, medical emergency or urgent matter relating to the specified family members or an urgent matter.) Employers can still require evidence of entitlement to these days but they will not be permitted to require a certificate from a qualified health practitioner, i.e., doctor’s note.

Extended pregnancy leave:

The entitlement to six weeks pregnancy leave in certain circumstances is increased to 12 weeks. Pregnancy leave for employees who suffer a still-birth or miscarriage will be extended from six weeks to 12 weeks after the pregnancy loss occurs. This only applies to leaves that commence after January 1, 2018. Employees will be able to satisfy their entitlement to this leave by providing a medical certificate from a physician, nurse practitioner or midwife.

Extended family medical leave (compassionate care leave):

The entitlement to family medical leave to provide care or support to a family member who has a serious medical condition with a significant risk of death within a certain timeframe will be extended from an eight-week leave in a 26-week period to a 28-week leave in a 52-week period. Entitlement to this leave may now be certified by physicians, nurse practitioners or another prescribed class of health practitioners. EI compassionate care benefits now cover 26 weeks.

New domestic or sexual violence leave:

An employee who has been employed by an employer for at least 13 consecutive weeks will be entitled to a leave of absence without pay if the employee or a child of the employee experiences domestic or sexual violence, or the threat of domestic or sexual violence. The eligible employee would be entitled to take up to 17 weeks off work per calendar year, comprising of 10 days that can be taken in days (or part of a day) for things like medical appointments, and up to 15 weeks (or partial weeks) intermittently for reasons that require more time, such as making moving arrangements. The first five days of this leave must be paid.

In addition, employers may make a reasonable request for evidence of the necessity of the leave, however, they must also establish mechanisms to protect the confidentiality of such information and only disclose it in limited circumstances.

Separate child death leave and child disappearance leave:

The current crime-related child death or disappearance leave is an unpaid job-protected leave of absence. It provides up to 104 weeks with respect to the crime-related death of a child and up to 52 weeks with respect to the crime-related disappearance of a child. Employees are entitled to crime-related child death or disappearance leave if it is probable, considering the circumstances that a child of the employee died or disappeared as a result of a crime.

The new child death leave expands upon the entitlement of the former crime-related child death or disappearance leave and will provide employees with an entitlement of up to 104 weeks of unpaid leave if a child of an employee dies for any reason.

The entitlement to crime-related child disappearance leave remains but increases from 52 weeks to up to 104 weeks.

Temporary help agency and termination pay:

Effective January 1, 2018, temporary help agencies must 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.

Administrative penalties for non-compliance:

There will be an increase in penalties for non-compliance, coupled with expanded wage collection powers. Section 113 (Notice of contravention) is amended to provide that the penalties for contraventions will be determined in accordance with the regulations, which permit the establishment of a penalty range or of different penalties that apply to individuals and to corporations. Employment standards officers are given the discretion to determine a penalty within the range in accordance with the prescribed criteria, if any. New provisions are added to authorize the Director to publish information related to a deemed contravention of the Act following the issuance of a notice of contravention. New provisions are added to Part XXIV (Collection) to allow the Director to accept security for amounts owing under the Act, issue warrants collecting money pursuant to an order under the Act or registering a lien respecting money owed pursuant to an order under the Act. These powers may be delegated to collectors. The Director and the collectors may disclose information to each other for the purpose of collecting an amount payable under the Act. Related consequential amendments are made to the Employment Protection for Foreign Nationals Act, 2009 and to the Occupational Health and Safety Act.

4. Amendments and provisions that are in force April 1, 2018

Equal pay for equal work:

Effective April 1, 2018, employers will be required to pay casual, part-time, temporary and seasonal employees the same rate as full-time, permanent employees when doing the same job. This will also apply for temporary help agency employees doing the same job as permanent employees at the company they are assigned to if those employees perform substantially the same (but not necessarily identical) kinds of work, in the same establishment. However, where the difference in pay is made on the basis of seniority, merit, earnings by quantity or quality of production, or any other factor other than sex or employment status, this rule will not apply. It is important to note that “seniority” does not include the amount of hours an employee works, despite that being a common distinguishing factor in workplaces and collective agreements.

Employees and temporary help agency workers who believe they are not being paid equally will be permitted to request a review of their rate of pay with their respective employer. Employers who receive such a request, and disagree with it, will be required to provide a written response setting out the reasons for the disagreement. Further, employers will be expressly prohibited from committing reprisals against employees (or temporary help agency workers) who make such a request and must permit or discuss or disclose their rate of pay to other employees.

It is important to note that collective agreements which permit differences in pay that conflict with the requirement of equal pay for equal work will prevail until January 1, 2020 or the expiry of the agreement, whichever is earlier. This means that employers may be required to renegotiate the pay provisions during the currency of their collective agreement, or have them overridden by the ESA’s new rules. The Ministry of Labour intends to review the equal pay for equal work provisions prior to April 1, 2021.

5. Amendments and provisions that are in force January 1, 2019

Minimum wage increase:

The general minimum wage rate will increase to $15 per hour on January 1, 2019. The student rate will be $14.10. The liquor server rate will be $13.05 and the homeworker rate will be $16.50.

After January 1, 2019, the minimum wage will be subject to an annual inflation adjustment on October 1 of each year. In addition, the Ministry of Labour has committed to reviewing the minimum wage and the process of adjusting it by October 1, 2024.

Right to request scheduling changes and restrictions:

Previously, the ESA did not contain any provisions regulating the scheduling of work by employers. Amendments reduce the ability of an employer to change the working hours of an employee on short notice, among other things.

The three-hour rule is expanded and an employee will be entitled to at least three hours of regular pay where:

  • the employee attends work for a shift longer than three hours but works fewer than three hours,
  • the employee is on-call and is not called into work or is called in for fewer than three hours, and
  • the employee has an entire scheduled day of work cancelled within 48 hours of its intended start.

Three hours of pay is at the employee’s regular rate, or the sum of: the pay for the time worked; and wages equal to the employee’s regular rate for the remainder of the three hours. Under this calculation, employees who receive overtime pay (or some form of premium) for the time worked, will be entitled to that premium.

Regarding on-call, employers will only be required to pay an employee a minimum of three hours in a 24-hour period beginning at the start of the first time during that period that the employee is on the call. In addition, the requirement to provide “on-call pay” will not apply to employees on call for the purposes of ensuring the continued delivery of essential public services. Under this exception, “emergency” is defined to include: (i) 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 (ii) a situation in which a search and rescue operation takes place.

Regarding the cancellation of shifts within 48 hours, if an employee’s scheduled day of work (or on-call period) is cancelled within 48 hours of its intended start, the employee is entitled to three hours of pay at his or her regular rate. It is important to note that this only applies to cancellations and not if schedules are shortened or extended. This requirement will not apply to cancellations beyond the employer’s control, such as weather, fire, power failure or other reasons prescribed by regulation.

An employee will have the right to refuse a shift where the request to work is made fewer than 96 hours (four days) prior to the start of the shift. Employers are exempt from this provision if the employer’s request is to deal with an emergency, to remedy or reduce a threat to public safety, ensure delivery of essential public services or for other reasons prescribed by regulation.

After three months of employment, an employee will be entitled to request a change to his or her work schedule or location. Once an employer receives the request they must:

  1. Discuss the request with the employee; and
  2. Notify the employee of their decision within a reasonable time. If the employer grants the request, they must specify the date the change takes place and the duration.

If the employer denies the request, they must provide reasons for the denial.

Where a collective agreement is in effect on January 1, 2019, the scheduling provisions of the collective agreement will prevail until January 1, 2020 or the expiry of the agreement, whichever is earlier.

Removal of what is known as the work hardening exemption:

Amendments will repeal section 3(5)(6) of the ESA which will remove the exemption under the ESA for an individual who performs work in a simulated job or working environment if the primary purpose in placing the individual in the job or environment is his or her rehabilitation. This will effectively limit the use of work hardening programs which are designed to assist employees return to productive work after an injury, illness or disability.

Takeaway for employers

Employers should therefore become aware of recent significant amendments to Ontario’s Employment Standards Act and Occupational Health and Safety Act.

These amendments will require employers to update their employment practices, communicate with employees and train managers and supervisors on the changes as soon as possible.

Failure to comply with the legislation will place organizations at risk of costly fines, employment standards or human rights complaints, investigations, poor morale and damage to the organization’s brand.

Updating policies and procedure manuals or employee handbooks is extremely important, however, the most important consideration will be proactively training managers and supervisors on the changes and ensuring that they understand the implications of the changes and entitlements of employees. This will ensure they do not deny entitlement and rights to employees they supervise because they don’t know the legislation or its application.

New entitlements with respect to hours of work, overtime, vacation and public holiday, statutory leaves, rest periods, three-hour rules and terminations are all changes in the legislation that managers are going to need to understand in order to effectively supervise staff and avoid costly mistakes or misinterpreting the law which can result in a complaint.

Being proactive and preparing in advance for legislative changes will support your managers and give them the confidence they need to address questions that will inevitably come prior to the various coming into force dates found in the law.

It is expected a new version of the ESA poster will be prepared shortly informing employees of their existing, amended and new rights. When the ESA poster is made available, employers will need to provide a copy to each employee as soon as reasonably practicable and post a copy in a conspicuous place in the workplace.

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