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Ontario’s Employment Standards Act Reform: What Bill 148 may mean for employers

On May 30, 2017, Ontario Premier Kathleen Wynne announced that the province will increase the minimum wage from 11.60/hour (effective October 1, 2017):

  • to $14 an hour on January 1, 2018, and
  • to $15 an hour by January 1, 2019.

These changes will make Ontario the second province (Alberta was the first) to publicly target a $15 minimum wage.

If you thought the announcements would end there, you were mistaken:

May 25: Final report released, 173 recommendations
May 30: Wynne announces Minimum Wage increase
June 1: Bill 148 introduced and referred to Committee
June 5: Legislature closed for summer, resumes Sept. 1

Premier Wynne’s minimum wage announcement came after the release of the Final Report on the Changing Workplaces Review, which put forward 173 recommendations about strengthening workplace safety, collective bargaining and wage fairness for part-time, casual, temporary, seasonal and contract employees.

It’s worth noting that none of the 173 recommendations suggested an increase to minimum wage.

Ontario Bill 148: Fair Workplaces, Better Jobs Act

On June 1, 2017, Bill 148, the Fair Workplaces, Better Jobs Act, was introduced. The move has caused some to question whether there has been adequate consideration given to the economic impact of all of the changes being proposed.

What Ontario Employers should know about Bill 148 – in advance of January 2018

The following summarizes a few* of the proposed amendments to the Employment Standards Act that will be of interest. With the exception of Scheduling, Bill 148 indicates the changes listed here, if passed, would be effective January 2018:

  • Vacation Entitlement Increase: Minimum vacation entitlement for workers would rise from two to three weeks per year (after five years with the same employer)
  • Public Holiday Pay: Calculation changes for public holiday pay that refer to regular wages in the pay period before the holiday divided by the days worked (rather than a four-week period of regular wages divided by 20)
  • Overtime: The Mixed Hourly Rate (a weighted average established for employees with multiple rates) would be eliminated in favour of paying overtime at the rate of the work performed after the weekly threshold is reached
  • Personal Emergency Leave: Rather than limiting this leave to organizations with more than 50 employees, all workers will be given 10 personal emergency leave days per year – and a minimum of two days would be paid. Further, employees will not have to provide employers with a sick leave note when requesting personal leave.
  • Scheduling (January 1, 2019):
  • Advance notice: Employers must offer employees advance notice of 96 hours or be subject to refusal
  • Three-Hour Rule: Removal of minimum wage component – Rather than topping up shifts less than three hours to three times the minimum wage, as proposed, eligible employees would be entitled to three times the regular rate
  • Three-Hour Rule: Broader application – The rule would extend to unworked on-call situations and when shifts are cancelled within 48 hours of the scheduled start time

 

What does this mean for employers?

Although the government of Ontario has proposed a broad consultation process to gather feedback from a variety of stakeholders, the January 2018 effective date may challenge that intention.

As a result, businesses may be subject to some uncertainty around their 2018 obligations.

Preparing for these changes will require minimum wage updates and could require organizations to adjust their payroll set ups (vacation accruals), workforce policy rules (overtime, holidays and three-hour rule), and scheduling processes.

By starting an internal assessment now, businesses can confirm impacts in the context of their operations and work with their partners to understand how best to respond.  

For a summary of the current employment standards in your province, visit the Compliance Centre.

 

*Note: The focus of this list is on more traditional employment standards related changes. It is not inclusive. There are significantly more changes proposed in Bill 148 than are described here. For example, there are new penalties for misclassification of employees as contractors, measures to support equal pay for equal work as well as amendments directed at temporary help agency employees. A new leave is also being introduced and, as proposed, family medical leave would be increased from 8 weeks to up to 27 weeks.

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