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Employer alert: Payroll costs in Ontario went up (again) on April 1, 2018.

payroll costsIf you use a temporary help agency or hire casual or part-time employees then you should read this article. Because starting this month there is a change to the Ontario Employment Standards Act, 2000 (the “ESA”) that could increase your payroll costs.

Equal pay for equal work takes effect on April 1, 2018

Since April 1, 2018 Ontario employers have been required to pay temporary help agency workers and casual & part-time employers the same rate of pay as full-time employers performing substantially the same work unless an exemption applies.

Wage rates can no longer be kept confidential

Assignment employees from a temporary help agency can ask your non-assignment employees how much they are paid for doing substantially the same work.

A casual or part-time employee can ask you how much you pay a full-time employee doing substantially the same work. If you terminate or punish an employee for making this inquiry then you could be required to reinstate the employee to his or her job or compensate the employee for any wage loss.

What are the exemptions to this new law?

There are certain exceptions to the provisions regarding equal pay for equal work. The provisions do not apply when the difference in rates of pay are made on the basis of (a) a seniority system, (b) a merit system, (c) a system that measures earnings by quantity or quality of production, or (d) any other factor other than sex or employment status. Nevertheless, before you assume that this exemption applies to your organization, you should consult a lawyer.

Lessons to be learned

  1. The cost of temporary agency workers who perform substantially the same work as full-time employees is going up unless your organization can fall into one of the statutory exemptions.
  2. Similarly, the wage rates of casual employees, and part-time employees is going up unless your organization can fall into one of the statutory exemptions.
  3. Do not discipline a casual or part-time employee for asking how much your organization pays a full-time employee doing substantially the same work.
  4. An employer generally has the right to establish an employee’s job duties and therefore determine whether temporary agency workers, casual employees and part-time workers are performing substantially the same work as full-time employees.
  5. As long as an employer does not set different wage rates based on sex or employment status, an employer generally has the right to set wage rates based on seniority, merit and production quantity/quality.
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Doug MacLeod, MacLeod Law Firm

Employment and labour lawyer at MacLeod Law Firm
For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising and representing employers in connection with employee terminations. If you have any questions, you can contact him at 416 317-9894 or at doug@macleodlawfirm.ca. Read more
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