Changes to ESA and LRT Passed, EHT Exemptions and Provincial Income Tax

1. Employment Standards and Labour Relations law changes

On November 21, 2018, the Ontario conservative government gave third reading to Bill 47, Making Ontario Open for Business Act, 2018, effectively rolling back many employment and labour law changes brought in by the previous Liberal government Fair Workplaces, Better Jobs Act, 2017 (introduced as Bill 148). Bill 47 although passed is awaiting royal assent to become law. Most of the provisions will come into force at a later date, on January 1, 2019. To summarize certain key employment standards provisions:

  • Changes to personal emergency leave: Bill 47 repeals the personal emergency leave (PEL) provision in the ESA (s. 50) and replaces it with three separate leaves: Three unpaid sick days; three family responsibility leave days; two unpaid bereavement days. No prohibition on requirement of medical documentation and no paid sick leave.
  • Equal pay for equal work based on employment status: Bill 47 repeals section 42.1 of the ESA, which relates to equal pay for equal work based on employment status.
  • Changes to scheduling and record-keeping: Scheduling and related record-keeping provisions of the ESA were to come into force on January 1, 2019. Bill 47 repeals sections 27 (2), (3) and (5) of the ESA which relate to scheduling and record-keeping provisions in the ESA, including a minimum of three hours pay in the event a shift is cancelled 48 hours or less before it was scheduled to begin.
  • Modified three hour rule exemption: Bill 47 provide for a modified three-hour rule under Part VII.1 (s. 21.2) of the ESA.
  • Minimum wage: Bill 47 freezes the province’s minimum wage at $14 an hour until 2020, with future increases tied to the rate of inflation.

Where can you get more detailed information on the changes?

You can read more on Bill 47 employment standards provisions in a previous Slaw post here

You can read about the BIll 47 labour relations provisions in a previous Slaw post here.

How can employers prepare?

Employers need to familiarize themselves with the language of the changes. Employers should also prepare for the changes by ensuring that their policies are reviewed and amended accordingly.

Employees should also understand that most of their rights are changing effective January 1, 2019 by having these amended policies communicated to them.

It is crucial that employers continue to comply with the requirements of the Fair Workplaces, Better Jobs Act, 2017 (introduced as Bill 148) until Bill 47 repeal actually come into force.

2. Changes to provincial personal income tax and EHT exemption

On November 15, 2018, the Ontario government released its 2018 Ontario Economic Outlook and Fiscal Review, outlining the government's fiscal roadmap. According to the government, "Ontario is now projecting a 2018–19 deficit of $14.5 billion—that's already $0.5 billion less than the $15 billion deficit inherited from the previous government as reported by the Independent Financial Commission of Inquiry just 11 weeks ago."

The government is said to aggressively pursue every opportunity to find new efficiencies and savings. The province has saved $3.2 billion, or about 2 percent, in program expenses by reducing spending—while not reducing front-line services.

Of interest to employers and payroll, the government is giving individuals, families and businesses important tax relief which include:

  • Ontario workers earning less than $30,000 will no longer have to pay Ontario Personal Income Tax starting in 2019, and those earning up to $38,000 will pay less tax. The Low-income Individuals and Families Tax (LIFT) Credit would benefit 1.1 million people across the province. It would provide low-income and minimum wage workers up to $850 in Ontario Personal Income Tax relief and couples up to $1,700.
  • Tax relief would be gradually reduced for taxpayers with individual incomes greater than $30,000, and family incomes greater than $60,000.
  • Reversing the previous government’s announced changes to Ontario’s small business deduction that would have raised taxes by up to $40,000 per year for about 7,900 companies, and
  • Increased the amount of payroll that is exempt from the Employer Health Tax for eligible Ontario employers from $450,000 to $490,000. This is part of a series of EHT exemption adjustments for inflation using the Ontario Consumer Price Index scheduled for every five years.

Legislation must be tabled to enact the above measures. We will keep you updated on any legal developments to that effect.

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