There have been a number of changes to employment standards in Ontario since the passing of Bill 148, the Fair Workplaces, Better Jobs Act, 2017. As there are more changes becoming effective as of next month, it is a good time for organizations to review what’s already changed and what changes are still to come. We have highlighted some significant changes as of November 2017, December 2017, January 2018, April 2018, and upcoming in 2019.
As of November 27, 2017, your organization should have already reviewed its classification of employee vs. contractor. We have noticed an uptick in the number of payroll audits among nonprofits. With stricter enforcement around classifications of who is an employee vs. who is an independent contractor (aka freelancer) now in effect with Bill 148, it is important that organizations thoughtfully review their decision-making process around defining an individual as an employee or as a contractor. Organizations should be prepared to implement necessary changes.
Factors to consider include:
- Control. An employee is directed by an employer; a contractor has a measure of control over what and how work is done (although they don’t have to exercise that control).
- Tools & Equipment. Employees who use tools and equipment do not own those items. Their employer should provide, maintain, and insure most of those tools. Employers can also reimburse employees for tools and equipment they have acquired for the job.
- Subcontracting / hiring assistants. An employee cannot subcontract tasks or hire an assistant to do their work. A contractor can subcontract or hire help without approval of the payer.
- Financial risk. An employee’s expenses are reimbursed and generally has no financial risk. A contractor is self-employed and takes on financial risk with each engagement, should the contract go incomplete/unpaid.
- Responsibility for investment and management. An employee does not have a capital investment in the employer’s business. A self employed person generally has an established business, or a capital investment in the payor's business.
- Opportunity for profit. An employee doesn’t gain profit or incur loss while doing their work, whereas self-employed individuals can take a loss or a profit in the course of a contract.
Also as of November 2017, your organization should have updated its crime-related child death or disappearance leave. A child is defined as under 18 and can be a step-child or foster child. Employees qualify for this leave after 6 months of employment. It is an unpaid but protected leave of up to 104 weeks.
Employers should note that as of November 2017 the EI waiting period has been reduced from 2 weeks to 1 week, for those who have a reduced EI rate due to an STD (short-term disability) program. The government has provided employers 4 years from January 1, 2017 to have plans to accommodate the reduced wait period or the organization will risk losing the reduced EI rate.
As of December 3, 2017 employers need to have begun preparing to accommodate the following family-related job leaves: employees can now opt to take an extended parental leave (increased by an additional 26 weeks (61 weeks total). This could prove to be a popular option for parents in Ontario, where childcare availability and affordability are a huge challenge, especially for children under 18 months of age. It is important to note that once an employee chooses the parental benefit path (extended or non-extended) they cannot change paths at a later date. Also note that the EI coverage for parental leave is for the same amount, no matter the path chosen. In other words, the recipient will receive the same overall dollar amount whether the leave is 35 weeks or 61 weeks, but their biweekly payments will be more or less respectively.
Also as of December 1, 2017, women can now take maternity leave up to 12 weeks prior to the birth of a child, and employees who are family caregivers are now able to take up to 15 weeks of unpaid, job protected leave.
As of January 1, 2018, several changes related to wages and paid time off have come into effect, as well overtime, job leaves, and holiday pay, and record-keeping obligations.
Your organization should now be accomodating the following changes related to wages and PTO:
- Minimum wage. Employees have a minimum wage of $14/hour. Student employees have a minimum wage of $13.15 (but if school is in session, they must work less than 28 hours / week to be eligible for this wage). So, if a student is working full time hours while school is in session, they are considered an employee, not a student employee, and are entitled to the full $14/hour minimum wage. The 28 hour per week limit does not apply on school holidays or during summer break.
- Vacation pay. New legislation means that every employee in Ontario is now entitled to 3 weeks (6%) vacation after 5 years of consecutive employment with a single employer.
- Overtime. Overtime pay must be paid out at the rate at which an employee was being paid at the time the overtime occurred. For employers, this means that overtime can no longer be calculated at a blended pay rate, and overtime pay cannot be paid out at, for example, the lower of an employee’s two pay rates.
- Public holiday pay calculation. To determine the amount of stat holiday pay to pay out to an employee, an employer should now use the single pay period directly prior to the stat holiday to calculate the average daily wage (total gross earnings/number of days worked in that period). Some scenarios require employers to consider some additional factors:
- For new hires, employers should use the current period to to determine the average daily wage, and pay that. UPDATE: The Ministry of Labour has announced that effective July 1, 2018, the ESA will be reverting back to the former statutory holiday calculation of 1/20 of the prior 4 weeks earnings as an interim measure while the public holiday changes to the ESA continue to be reviewed. This change is due to concerns arising from the Changing Workplaces Review, which found that "public holiday rules were the source of the most complaints under the ESA and needed to be simplified." More info.
- For anyone on approved leave in the pay period prior to the stat, employers should use the pay period in which the individual last worked to determine the average daily wage.
- When determining average daily wage use the gross earnings before statutory deductions. Do not include overtime pay, termination pay, severance and premium pay, vacation pay, personal emergency leave pay, domestic or sexual violence leave pay or pay for other public holidays.
- The Statutory Holiday Calculator can be found here.
Employers also, as of January 2018, need to be prepared to provide to eligible employees 10 days of Personal Emergency Leave, the first two of which are paid. Employees are eligible after 1 week of consecutive employment. Employers are no longer allowed to to ask the employee for a physician’s note to validate the leave.
As well, employers should be prepared to accommodate Domestic and Sexual Violence leave to eligible employees. Employees are eligible after 13 weeks of employment. This is a job protected leave of up to 10 individual days, the first 5 of which are paid, and up to 15 weeks per calendar year for employees, or children of employees, who have experienced or been threatened with domestic or sexual violence.
As of January 2017, all organizations are now obliged to follow several new employee-related record-keeping measures. They should record:
- Dates and times employees are scheduled to work and changes to on call schedules
- Dates and times employees worked
- If an employee has two or more pay rates for worked performed in a pay week
- Any cancellations of scheduled days or work or on call periods and dates and times of those cancellations
- Vacation records for 5 years (instead of 3 years)
April 1, 2018
Upcoming as of April 1, 2018, organizations need to be prepared to issue equal pay for equal work. Part-time, casual, temporary, and seasonal employees must be paid the same as full-time permanent employees if they are doing essentially the same job. All organizations, including nonprofits, often with stretched budgets, will need to think carefully about how they rely on these types of workers and what they budget to pay them. A permanent, full-time employee cannot be paid more for the same task or set of tasks. Exceptions exist jobs paying by quantity or quality of work, or for merit or seniority systems, but these systems must be applied consistently.
Possible changes coming in 2019
Although not yet confirmed by the government, organizations in Ontario should be prepared for the following in 2019:
WSIB review, which is proposed to
- Update the 34 industry classifications
- Establish premium rates based on the collective experience of employers in the industry classification
- Set an employer’s actual premium based on individual employer experience based on individual company level of risk
- Starting in 2019 CPP contribution rate will increase each year until 2023 when it reaches 5.95%
- There will also be an additional enhanced earnings percentage of 4% for earnings between the yearly maximum and the new upper earnings beginning in 2024
- Employees can request a location or schedule change after three months of employment, without penalization
- Employees can refuse shifts that an employer requests they take with less than 96 hours notice, without fear of retaliation
- exceptions are made for dealing with an emergency, remedy, or reducing a threat to public safety, or continued delivery of an essential public service
- Employers must pay 3 hours wages to anyone who
- regularly works more than 3 hours but has their shift is cut short
- whose shift is cancelled without 48 hours notice from scheduled start time
- is scheduled on call and is available to work but does not work at least 3 hours
An exception will be made when any of these situations arises from an event that is out of the employer’s control (eg. power failure, fire,) or if the employee works in a weather-related industry (eg. snow removal).
This tip sheet was created by Alicia McGuire of Young Associates. Founded in 1993, Young Associates delivers technical expertise and advisory services to support operational effectiveness of nonprofit and creative organizations. We invest in transformative technology and expert human capital to provide our customers progressive solutions in financial, data and information management, human resources, and strategic planning.