The following highlights and summarizes the most significant amendments to the Employment Standards Act. This paper provides a summary of the legislation only and should not be relied upon as a complete review of the statute. Nothing in this paper constitutes legal advice. For further assistance, please contact one of the Dunsmore Law lawyers.
Employee Classification – Effective Immediately
Perhaps the most significant change to the Employment Standards Act relates to independent contractors. The Act now requires proper classification of employees and those employers who assert that an individual is an independent contractor will bear the burden to prove that the employee is properly classified. While the Act remains complaint driven, the Ministry has hired 175 new inspectors who will conduct employer audits to ensure compliance with these, and other, provisions of the Act.
2. Vacation – Effective January 1, 2018
Vacation Entitlement. Employees will be entitled to:
2 weeks’ vacation (4% vacation pay) where the employee has less than 5 years of service; or
3 weeks’ vacation (6% vacation pay) where the employee has more than 5 years of service.
The legislation provides formulas for the calculation of vacation pay where the vacation year is other than the calendar year.
Scheduling vacation. Vacation is still subject to the employer’s approval, but vacation must be taken in complete weeks unless the employee requests otherwise in writing and the employer agrees. Vacation must be taken within 10 months’ after the end of the vacation year in which it was earned.
3. Holiday Pay – Effective January 1, 2018
Calculation of holiday pay. Holiday pay will now be calculated based upon the total amount of regular wages earned in the pay period immediately preceding the public holiday, divided by the number of days the employee worked in that period. This means part-time employees will receive more holiday pay than ever before. If the employee is on vacation during the relevant pay period, the employer must use the preceding pay period. The effect of the amendment is that all employees, whether full or part time, will be entitled to holiday pay equal to one days’ pay.
Substitute holidays. The employer must provide written notice before the public holiday if another day is substituted for the public holiday. This would apply where the employee either works the public holiday, or the holiday falls on a day which is not ordinarily a working day for the employee, or where the employee is on vacation. The notice must identify the day the employee must work, and the day that will be substituted as the public holiday.
4. Equal Pay – Effective April 1, 2018
Regardless of the employee’s status (full-time, part-time, contract) the employee must be paid the same rate of pay when the employee performs substantially the same work, at the same establishment, the work requires substantially the same skill effort and responsibility, and is performed under similar working conditions. This will not apply where there is a seniority or merit system, or where pay is based upon quantity or quality of production, or on the basis of any other reason other than sex or employment status.
Employers will bear the onus to demonstrate why there may be a difference in pay based upon a job evaluation model or evaluation of the precise duties and responsibilities assigned to the respective employees. Employers may not reduce the pay of any employee in order to comply with this provision. Where a collective agreement in effect on April 1, 2018 provides for differences in pay based upon employee status, the collective agreement will prevail until January 1, 2020.
Employee Review. An employee who feels that their employer is not in compliance with this section may request a review of their rate of pay, and the employer must respond in writing and either adjust the employee’s rate or provide written reasons for the disagreement. The reasons should be fulsome.
5. Temporary Help Agencies – Effective April 1, 2018.
The equal pay provisions apply to temporary help agencies to the effect that the temporary employee cannot be paid less than an employee of the client the employee performs the substantially the same work, at the same establishment, where the work requires substantially the same skill effort and responsibility, and the work is performed under similar working conditions. The section will not apply where the difference is based any factor other than employment status or sex. The legislation is silent in respect of what those factors might be but presumably the factors would have to be based upon the duties and responsibilities of the individual.
These sections create the practical issue of how a temporary help agency can comply with the rules without first obtaining disclosure of the client’s compensation practices, or alternately, obtaining an acknowledgement from the client that the payments made to the temporary employee are in compliance with the legislation. What is clear is that an employer or a temporary help agency cannot decrease the pay of an employee merely for purposes of compliance.
A temporary help agency must now maintain a written record of all hours of work by each assignment employee for each agency client. The temporary help agency must also retain a copy of all notices (policy directives etc.) provided to agency employees.
Where the assignment is for more than three months, and if the assignment is terminated before the end of its term, the agency must provide one week’s notice or pay in lieu of notice. This does not apply if the employee can be offered another assignment, if the employee is guilty of wilful misconduct, disobedience, or wilful neglect of duty or if the assignment ends due to a strike or lockout at the client’s place of business.
6. Personal Emergency Leave – Effective January 1, 2018
All employees, regardless of the size of their employer, will be entitled to 10 personal emergency leave days. The provision of the Act which limited the obligation to provide emergency leave days to employers with more than 50 employees has been revoked. Two of those days will now be paid.
An employer is NOT entitled to ask for a medical note as evidence to demonstrate that the employee is entitled to the leave days. Many employers offer paid sick leave or paid family leave in excess of the 2 paid leave days available under the Act or access to insured benefits after 5 days of absence and in such cases there remains an open question as to whether an employer can require medical evidence to substantiate eligibility for the payment of sick benefits, and whether these days are an addition to existing leave days.
In respect of the two paid leave days, the standard calculation for employee pay is “the wages the employee would have earned had they not taken the leave”). However, if wages are calculated based on commission or performance, the employee is entitled to the greater of the employee’s hourly wage, if any, or minimum wage. Employees who take Emergency Leave days are not entitled to overtime or shift premiums, nor are is the employee entitled to premium pay if the leave falls on a public holiday.
7. Pregnancy (Effective January 1, 2018) and Parental Leave (Effective December 3, 2017)
Pregnancy leave will continue to be up to 17 weeks in duration. Parental leave is increased to 61 weeks for those employees who take pregnancy leave and to 63 weeks otherwise. Employees who take both pregnancy and parental leave will therefore be entitled to 78 weeks of leave (18 months).
Service Canada is going to revise the manner in which it pays employment insurance benefits parental and pregnancy leaves. Under the new EI rules, Maternity Leave will remain 15 weeks at 55 per cent of insurable earnings, regardless of how parental leave is taken. However, mothers may start maternity leave up to 12 weeks (formerly 8 weeks) before the baby is born. The maximum duration of the EI maternity benefits remains at 15 weeks.
Regarding Parental Leave, there are now two options:
Parents can choose to receive EI benefits over the current 35 weeks at the existing 55 per cent of their insurable earnings or;
Parents can opt to receive EI benefits over a 61 weeks period at 33 per cent of their insurable earnings.
Employers who offer maternity leave top up should review their policies and collective agreements. Many such policies provide that an employer will pay the difference between some or all of the employee’s wages and the amount payable under the Employment Insurance Act for some or all of the leave. The option effectively now spreads out employment insurance monies over a longer period of time during a parental leave and that may result in commitments to pay more for a longer period for some employers depending upon the terms of the policy.
8. New Leaves of Absences
Domestic of Sexual Violence Leave – Effective January 1, 2018. If the employee has been employed for more than 13 weeks, the employee is entitled to up to 15 weeks of leave if the employee or a child experiences domestic or sexual violence of threat of same. The first 5 days of the leave are paid leave days.
Critical Illness leave – Effective December 3, 2017. If the employee has been employed for more than 6 months, the employee is entitled to up to 37 weeks leave to care for a critically ill child and up to 17 weeks to care for a critically ill adult. The leave is unpaid.
Child Death Leave – Effective January 1, 2018. If the employee has been employed for more than 6 months, the employee is entitled to up to 104 weeks of leave. The leave is unpaid.
Crime Related Child Disappearance Leave – Effective January 1, 2018. If the employee has been employed for more than 6 months, the employee is entitled to up to 104 weeks of leave. The leave is unpaid.
9. Scheduling – Effective January 1, 2019
The amendments introduce a number of new scheduling provisions. The provisions must be read together for a full and fair understanding of an employer’s obligations and an employee’s entitlements.
Minimum shift pay. Where the employee regularly works more than 3 hours on a particular day but works less than three hours, that employee is entitled to minimum 3 hours pay for shifts that are under 3 hours. This does not apply where the reason is due to a fire, lightening, power failure storms or similar causes beyond an employer’s control. This would not apply if the employee leaves early for whatever reason.
The as yet determined question is whether an employer can utilize the provisions of the Act to change the employee’s regularly scheduled shift on notice as required (see below) to shorten the shift and thereby pay only for the actual hours worked.
On-call. Employees who are on call will be paid 3 hours at the employee’s regular rate even if the employee is not called into work, or is called in but works less than 3 hours. If the employee works longer, the employee is entitled to be paid for those hours at his or her regular rate. This provision does not apply if the purpose of the on-call assignment is for purposes of providing continuous essential public services regardless of who delivers those public services. The minimum on-call pay only applies to the first on-call period in a 24-hour period, regardless of whether the employee is on-call multiple times during that 24-hour period.
Shift changes. An employee has the right to refuse a request, without fear of reprisal, to work or to be on call on a day they were not scheduled to work if the request is made less than 96 hours before the commencement of the on-call period. The employee therefore can refuse a change in schedule to work a day that is not a regularly scheduled day if the employer provides less than 96 hours of the change. In other words, an employer may change the shift with 96 hours’ notice and the employee has no legislated right to refuse.
This provision will not apply where the request is to deal with an emergency, a threat to public safety, or to ensure the continued delivery of essential services regardless of who delivers those services, or other reasons as may be proclaimed by regulation.
Where there is a collective agreement in place on January 1, 2019 which addresses either the right of an employee to refuse a schedule change, or the right of the employer to demand work or on-call availability, or where there is a conflict between the collective agreement and the legislation the collective agreement will prevail until January 1, 2020.
Shift cancellations. Where the employer cancels a scheduled day of work or scheduled on call period, the employee is entitled to 3 hours of pay at his or her regular rate, unless the employer provides 48 hours’ notice of the cancellation. Cancellation in this provision means the entire day of work or on-call period, not shortened periods.
This provision will not apply where the reason for the cancellation is due to fire, lightning, power failure storms, or similar causes beyond an employer’s control, or where the work is weather dependent and the employer cannot provide work because of the weather. Where there is a collective agreement in place on January 1, 2019 that deals with shift cancellations the collective agreement will prevail until January 1, 2020.
10. Request to Change Work Location – Effective January 1, 2019
After 3 months’ employment, employees may request a change in shift or work location and an employer is obligated to consider that request and must respond in writing.
11. Minimum Wage – Effective January 1, 2018, and January 1, 2019
The minimum wage will be raised to $14.00 per hour effective January 1, 2018 and to $15.00 per hour on January 1, 2019. There are other specific rates for identified categories of employees, including students, servers, and homemakers. Employers should review their compensation plans as the rise in minimum wage may create compression with other wage earners.
Generally - $14/hour.
• Students under 18 years of age - $13.15/hour.
• Employees who serve liquor - $12.20/hour.
• Hunting and fishing guides - $70 for less than five consecutive hours in a day and $140 for five or more hours in a day.
• Homeworkers - $15.40/hour
• Generally - $15/hour.
• Students under 18 years of age - $14.10/hour.
• Employees who serve liquor - $13.05/hour.
• Hunting and fishing guides - $75 for less than five consecutive hours in a day and $150 for five or more hours in a day.
• Homeworkers - $16.50/hour.