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A rollback on calculation of holiday pay for Ontario employees

Due to negative feedback regarding the new calculation of holiday pay, the Ontario government is temporarily reverting to the old way of calculating public holiday pay.

calculation of holiday payAs Ontario employers and employees know, the Employment Standards Act, 2000 (the “ESA”) was recently amended by Bill 148 introducing a number of sweeping changes. Most of those changes have already come into effect, such as the increase of the minimum wage to $14 per hour effective January 1, 2018. Other changes are being introduced at a later date such as an employee having the right, without fear of reprisal, to request changes to their work schedule or location if they’ve been employed for 3 months.

One change has already been reversed and this will affect employees’ take-home pay.

Before Bill 148, the calculation for public holiday pay under the ESA was as follows: the amount equal to total regular wages and vacation pay earned over the previous 4 weeks, divided by 20. This typically resulted in full-time workers earning more than casual or part-time workers.

Under sections 24-32 of the ESA, the government had modified the calculation of public holiday pay. The formula became: “the total amount of regular wages earned in the pay period immediately preceding the public holiday, divided by the number of days the employee worked in that pay period.”

This new calculation was leading to a significantly greater entitlement for casual and part-time employees. It meant that a part-time employee working a single but long shift was receiving comparable holiday pay to a full-time employee. It also resulted in variations in pay between part-time workers. For example, an employee who worked only half days every day during the pay period would be entitled to a half-day of pay while another employee who worked only one full day during the pay period would be entitled to a full day’s pay.

Due to negative feedback from stakeholders, under the Public Holiday Pay Regulation (Reg 375/18) , the Ontario government is temporarily rolling back to the pre-Bill 148 calculation for public holiday pay until they review the matter further. The rollback will be in effect from July 1, 2018 to December 31, 2019 unless the government decides to make the rollback permanent. But until July 1, 2018, part-time and casual employees will still enjoy the benefits of the “new” calculation.

It will be interesting to see if there will be any other revocations or changes to the new provisions of the ESA depending on feedback from employees and employers.

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De Bousquet PC Barristers and Solicitors

Civil Litigation Lawyers at De Bousquet PC Barristers and Solicitors
De Bousquet law offers experienced counsel and representation in multiple aspects of employment law, labour relations, commercial law and civil litigation. Jean-Alexandre De Bousquet, founder of the firm, interned for the Canadian Centre for International Justice, worked for an Ottawa law firm and pursued a career with the Attorney General of Ontario. In 2014, Jean-Alexandre was named one of Ontario's "leading experts" in human rights law by Legal Action Magazine. Jean-Alexandre handles cases related to wrongful dismissal, workplace discrimination, breach of contract, fraud and commercial disputes. Jean-Alexandre is fully fluent in French and English and represents clients before courts and tribunals using both official languages.Before the practice of law, Jean-Alexandre was a journalist at the CBC for 3 years. Other notable achievements include employment with the Canada Research Chair on Native Peoples and Legal Diversity, the Canadian Research Chair on Metis Identity and the Urban League, a U.S. civil rights organization. Jean-Alexandre has also published articles in prominent academic journals and presented papers at international conferences in Canada and the U.S.Read more here
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