September 27, 2017 By: Alexander Dezan
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This article originally appeared in The Lawyers Daily on September 26, 2017, published by LexisNexis Canada Inc.

As even the most casual observer of current events is aware, the Ontario Government introduced legislation that will increase minimum wage from $11.40 to $15.00 an hour by January 1, 2019. Bill 148, the Fair Workplaces, Better Jobs Act (“Bill 148”) was introduced and referred to committee on June 1, 2017, just days before the provincial legislature rose for the summer.

Bill 148 proposes amendments to a number of employment statutes, most notably the Employment Standards Act (“ESA”). Currently, Bill 148 is being read for a second time after receiving amendments over the summer from the Standing Committee on Finance and Economic Affairs.

It is no great surprise that this story grabbed headlines. After all, it is a meaningful change and will affect thousands of individuals across the province. However, employment lawyers should take note that it is only one of several important changes proposed by Bill 148, many of which will significantly impact the pocketbooks of employees and employers alike.

Employment lawyers need to be aware of Bill 148’s many proposed changes in order to properly advise their clients in the event Bill 148 passes. Some of the more significant changes with potential financial impacts are summarized below.

Scheduling Provisions

Currently, s. 5(7) of Ontario Regulation 285/01 states that when an employee is called in for a shift and works fewer than three hours, the employer is required to pay for three hours of work at either minimum wage or the employee’s regular rate of pay for the time worked, whichever is higher. This is commonly referred to as the “three-hour rule.”

Bill 148 changes both the calculation and applicability of the three hour rule. Under the proposed ESA s. 21.3(1), employees who work fewer than three hours will be entitled to their regular rate of pay for all three hours. Employees will also be entitled to 3 hours of pay at their regular rate of pay when:

  • Their shift is cancelled within 48 hours of beginning (so long as the nature of the employee’s work is not weather-dependent); and,
  • They are not called in for a shift for which they are “on call”, or are required to work less than three hours yet were available to work longer.

Furthermore, s. 21.5(1) will grant employees the right to refuse a request to work or be placed “on call” without repercussion where the employer makes such a demand within 96 hours of the shift starting. This provision will not apply where the employee’s work is either to deal with an emergency, or to remedy or reduce a threat to public safety.

Equal Pay for Equal Work

Currently, the ESA does not provide equal payment protection, or “wage parity,” for non-permanent employees such as casual, part-time, temporary, or seasonal employees. As the law currently stands, an employer may pay part-time employees less than full-time employees on the basis of employment status.

Bill 148 would amend this practice, and mandate that employers and temporary help agencies provide equal pay to non-permanent employees. Proposed s. 42 would prohibit employers and temporary help agencies from paying employees less than others when they perform substantially the same work in the same establishment, work under similar working conditions, and use substantially the same skill, effort, and responsibility as permanent/full-time employees.

The only exceptions to this rule will be where the pay difference results from a seniority system, a merit-based system, a system measuring quality/quantity of production, or any reason other than sex or employment status. Employees will also be empowered by a new right to request a review of their wage rate if they suspect the employer is not complying with wage parity provisions. When a request is made, the employer must respond by either increasing wages or providing a written explanation for any difference in pay rate.

Vacation Pay

The ESA currently entitles employees in Ontario to two weeks of vacation per 12 month entitlement period, calculated at a minimum as four per cent of the wages earned during this period. Bill 148 retains this calculation for employees with fewer than five years of experience at the same employer, however grants three weeks of vacation, calculated at a minimum as six per cent of wages, to those with five or more years of experience with the same employer.

Conclusion

Bill 148’s impacts will vary significantly between industries, and employment lawyers should consider Bill 148 in the context of their practice to better serve client needs. For example, employers in the service industry may need to develop and implement more reliable scheduling practices to avoid new costs associated with last minute scheduling changes. However, a seasonal employee performing manual labour may be less concerned with scheduling and more concerned with whether their employer is complying with wage parity provisions.

Regardless of industry, proposed changes to scheduling, compensation, and vacation are significant, and lawyers working in the employment field must be aware of the financial impacts of these and other proposed amendments in order to properly advise clients moving forward.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.