What Every Employer in Ontario Needs to Know – Part 1

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Every employer in the province of Ontario has numerous obligations in relation to employment law matters. The following is a summary of some of the more salient ones.

Please note this paper addresses provincially (as opposed to federally) regulated employers with non-unionized staffs. Additional considerations will apply to union situations. The commentary below is intended as a general guide. Specific advice should be obtained to address specific situations.

There are five parts to this blog. Please check back for further installments.

(This memorandum is effective at January, 2013)

1. Employment Standards Act, 2000 (Ontario)

The Employment Standards Act, 2000 (ESA) sets minimum standards for conditions of employment in most workplaces in Ontario. The ESA establishes basic employer obligations and employee rights with respect to rates of pay, hours of work and overtime, vacations, public holidays, various forms of leave and more. The ESA is enforced by officers who work for the Employment Standards (ES) Program, which is part of the Ontario Ministry of Labour. They can audit businesses throughout Ontario to ensure compliance. The following are a listing of key ESA requirements:

• Post the poster called “What you Need to Know”
Each employer in Ontario is required to post the “What You Should Know About the Employment Standards Act” poster, version 4.0 in at least one conspicuous location in the workplace. This poster must be printed out on legal-size (8 ½” X 14″) paper. It can be printed in colour or black and white.

• Hours of Work
The ESA limits hours that employees can work in a day and in a week. It provides ways in which a company and its employees can agree to work more hours. In the case of hours in excess of the weekly limit, prior approval by the Ontario Ministry of Labour is required, which means the employer must apply for this permission.

The ESA also sets out mandatory rest periods and rules concerning overtime. Further information is available in the chapter on Hours of Work in the ES Guide currently available at http://www.labour.gov.on.ca/english/es/pubs/guide/hours.php.

• Minimum Wage
The following chart sets out the lowest hourly rates an employer can currently pay an employee.
Minimum Wage Rate Effective March 31, 2010
General $10.25 per hour
Students $9.60 per hour

• Vacation Time and Pay
Most employees earn at least 2 weeks of vacation time after every 12 months of employment. In practice, employers often give vacation from the first year, but this is strictly not required, i.e., one earns the vacation in the first year in order to take it in the next. Employment contracts often enlarge on the minimum statutory scheme. Employees are entitled to be paid at least 4% of their total wages earned in that 12-month period as vacation pay, i.e. corresponding to the pay they would have received had they worked for such period.

• Public Holidays
Ontario has 9 public holidays every year. For more information, see http://www.labour.gov.on.ca/english/es/pubs/guide/publicholidays.php.
Most employees are allowed to take these public holidays with “public holiday” pay. The Ministry of Labour provides employers with access to an on-line calculator (http://www.labour.gov.on.ca/english/es/tools/php_calc.php) to help them calculate the public holiday pay for your employees.

• Leaves of Absence
There are four main types of leaves of absence that some employees are eligible for – pregnancy and parental leave, emergency leave, and family medical leave. These leaves are job-protected. That means employees cannot be terminated for asking for or taking these leaves of absence. Further information on leaves of absence is available at: http://www.labour.gov.on.ca/english/es/pubs/brochures/br_leaves.php

• Termination Notice and Pay
As a statutory minimum, employers must give an employee who has been employed for 3 months or more advance written notice of termination, termination pay in lieu of that notice, or a combination, if the employee is terminated. The amount of notice or pay depends on how long the employee has been working for the employer and the number of employees being terminated in a 4-week period. The common law adds another layer, potentially, of notice or salary in lieu thereof, in that termination of a non-fixed term contract is regarded as terminating a contract of an indeterminate duration, thus requiring reasonable notice or payment of salary in lieu thereof again. Employment contracts can limit this common law component provided the employee signed the contract freely and had the opportunity to obtain his own legal advice thereon.

• Temporary Help Agencies
Changes to the ESA affecting the temporary help sector came into force on November 6, 2009. The publication entitled “Complying with Employment Standards: What Temporary Help Agencies and Client Businesses Need To Know” sets out these new requirements.

Other Matters Under the ESA
For more information regarding an employer’s responsibilities under the ESA, see “Your Guide to the Employment Standards Act, 2000.”

About the Author
Libby Gillman is, by training, an experienced corporate and commercial lawyer with particular expertise in financial institution incorporation and regulation, banking law and regulation, sophisticated and innovative payment systems, electronic banking products, emerging technology-based financial and other products and services, electronic commerce including Internet law, and legal issues of privacy and security on the Internet.