On May 7, 2018, the Ontario government filed Ontario Regulation 375/18 under the Employment Standards Act, to change temporarily how public holiday is to be paid and calculated. In essence, the government is reverting back to the old formula that was in place before the Fair Workplaces, Better Jobs Act, 2017 (Bill 148) came into force January 1, 2018.
Therefore, effective July 1, 2018, an employee’s public holiday pay will be equal to the total amount of the regular wages earned and vacation pay payable to the employee in the four weeks before the workweek in which the public holiday occurred, divided by 20. This change will not result in retroactive pay changes.
Important to note that Ontario Regulation 375/18 is an interim measure and is scheduled to be revoked on December 31, 2019. In addition, the Victoria Day holiday, which falls on May 21, 2018, will still have to be paid according to the current formula introduced under Bill 148, which is based on the regular wages the employee earned in the pay period prior to the public holiday, divided by the number of days the employee worked in that period.
On May 7, 2018, the Ontario government also announced that they will undertake a review of the public holiday provisions of the ESA to find a permanent solution, and has invited interested stakeholders to provide feedback. The review will be conducted in 2018 by the Ministry of Labour and continues to form part of the Ontario government’s on-going response to the Changing Workplaces Review (CWR), and submissions can be sent to firstname.lastname@example.org.
Why the need for the interim measure and the review?
The change back is due to complaints from employers who have been grappling with the new public holiday pay formula. According to the government’s press release, the CWR found that the new public holiday rules were the source of the most complaints under the ESA and needed to be simplified.
Business owners argued that the public holiday provision under Bill 148 was both costly and flawed because “it increased the amount paid to some casual or part-time employees. Some business owners said they were paying more in additional holiday pay per month than what they were forking over due to the increase in minimum wage to $14 from $11.60.” For example, (calculation confirmed by the Ministry of Labour),
“Under the old system (prior to January 1, 2018), for example, a full-time person would get paid a full day for a statutory holiday, and a half-time person would get a half day. Someone that only worked one eight-hour shift a week would receive 20 percent of a day’s pay.
Under the new system (on January 1, 2018, Bill 148), a full-time worker would still get a full day of pay for the public holiday and someone working part-time would get a half day. However, if someone worked just one eight-hour day in the two weeks before the holiday, they would receive eight hours of pay – or a full day, which is the same as a full-time employee. If they worked an eight-hour shift and a four-hour shift they would receive six hours, based on the government’s holiday pay calculator.”
We will keep you updated on any new developments. It seems that the CWR may be looking at other Bill 148 provisions such as changes around scheduling of workers and on-call staff, which is set to come into force January 1, 2019.