Some recent changes in the law make Ontario’s employment laws more employer-friendly – especially for small businesses; this blog post discusses five of these changes.
1. Eliminating a scheduled increase in the minimum wage
Under Bill 148, the minimum wage was scheduled to increase to $ 15 per hour on January 1, 2019. This change did not impact many large employers in urban centres because most already pay all employees at least $ 15 per hour. This change would however have significantly impacted many small employers outside of Ontario’s major cities who pay the minimum wage to its employees. This change would have resulted in wage compression issues that would have likely necessitated wage increases for people throughout these organizations in many cases.
Eliminating a $ 1 an hour wage increase allows employers to maintain employment levels and margins, all other things being equal.
2. Eliminating a paid leave
Bill 148 introduced paid leaves for the first time in the Employment Standards Act (the “ESA”), including two paid personal emergency leave days. Most large employers voluntarily pay its employees at least two days paid leave each year but many small employers did not. The Ford government has eliminated these two paid leave days which has reduced payroll costs for small employers.
3. Reducing overtime pay
Bill 66, which became law on April 3, 2019, eliminated the need for an employer to get permission from the government to average hours over a four-week period for overtime purposes. Now, all an employer needs to do is obtain the employee’s consent. This can easily be done in an employment agreement. This change can reduce an employer’s payroll costs.
4. Less restrictions on scheduling employees to work more than 48 hours a week
Bill 66 also eliminated the need for an employer to get permission from the government to schedule an employee to work more than 48 hours a week. Now, all an employer needs to do is obtain the employee’s consent in an employment contract.
5. Eliminating a posting requirement
A little known provision in the ESA requires an employer to display a poster outlining some of an employee’s rights under the ESA. Under Bill 66, this requirement has been eliminated. An employer is still required, however, to provide an employee with this poster within 30 days of being hired. I suspect most employers will continue to be unaware of this remaining statutory requirement.
Lessons to be learned
- Ontario’s employment laws frequently change and HR professionals need to keep on top of these changes. One way to do so is to subscribe to blogs like this one.
- Employers can increase their rights and lower payroll costs by way of an employment contract. As a result of new changes in the law, employers can, among other things, reduce overtime costs.
- Employment contracts should be reviewed periodically. I recommend an annual review. This review can result in payroll cost savings. For example, if your current employment contract includes a provision that provides for two paid days leave because of Bill 148 and you want to eliminate these days for new employees, then you can now do so.