Wage and Hour Law in Ontario
1. Wage and Hour
What are the main sources of wage and hour law?
The Employment Standards Act, 2000 is the main source of wage and hour law in Ontario.Starting in 2020, the minimum wage may begin to increase each year at the rate of inflation.
What is the minimum hourly wage?
The general minimum wage is C$14.00/hour. The next scheduled change in 2020 may increase the general minimum wage to C$15.00/hour.
The student minimum wage is C$13.15/hour. The next scheduled change in 2020 may increase the student minimum wage to C$14.10/hour.
The minimum wage for liquor servers in Ontario is C$12.20/hour. The next scheduled change in 2020 may increase the student minimum wage to C$13.05/hour.
The minimum wage for hunting and fishing guides is based on blocks of time instead of by the hour. The hunting and fishing guides’ minimum wage is set to C$70.00 for less than five consecutive hours in a day and C$140.00 for five or more hours in a day, whether or not the hours are consecutive. The next scheduled change in 2020 may increase this minimum wage to C$75.00 for less than five consecutive hours in a day and C$150.000 for five or more hours in a day, whether or not the hours are consecutive.
The homeworker’s minimum wage is C$15.40/hour. The next scheduled increase in 2020 may increase this minimum wage to C$16.50/hour.
What are the rules for calculating Public Holiday Pay?
The Fair Workplaces, Better Jobs Act, 2017 (Bill 148) proposed to change the public holiday method of calculation to: “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 period.” This new calculation does not prorate an employee’s public holiday pay to reflect the average daily hours worked.
In light of the consultations held with stakeholders, the Government of Ontario has introduced Regulation 375/18 as an interim measure. This Regulation reverts the calculation for public holiday pay back to the pre-Bill 148 formula and will reserve the use of this formula until December 31, 2019. Subject to further amendments and the December 31, 2019 deadline, the method of calculating public holiday pay will stay as the sum of regular wages earned and vacation pay payable during the four weeks before the work week in which the public holiday occurred divided by 20.
What are the rules for employees scheduled to work less than three hours a day?
When an employee who regularly works more than three hours a day is required to report to work but works less than three hours a day, they must be paid the higher of either (a) three hours at the minimum wage, or (b) the employee’s regularly wage for the time worked.
What are the rules applicable to final pay and deductions from wages?
In Ontario, employers may deduct from employee’s wages in two situations:
a) when authorized by law
These are deductions made according to federal and provincial legislation. They include federal and provincial Income Tax, Employment Insurance Premiums and Canada Pension Plan contributions. The money deducted must be remitted to the proper authorities.
A court may also order an employer to deduct an amount from an employee’s wages. The money deducted must be paid out in accordance with directions contained in the court order.
b) when an employee has provided written authorization
An employer may deduct money from an employee’s wages if the employee has agreed to this in writing, subject to certain rules. Written authorization must specify the amount of money deducted or a method of calculating the amount of money to be deducted.
It is not enough to have an oral statement that the employee authorizes the deduction, or to have a written statement that the employee owes money to the employer without stating that the amount can be deducted from the employee’s wages.
Despite receiving written authorization from an employee, an employer is not allowed to deduct wages if there is:
- a loss due to faulty work. For example, a mistake in a credit card transaction, work that is spoiled or rejected or damage to company tools or vehicles; or
- a cash shortage, or lost or stolen property if a person other than the employee had control over or access to the cash or property. For example, if customers leave without paying their bill.
What are the requirements for meal and rest breaks?
After five hours of work, an employee must be provided a 30-minute unpaid meal period. This period can be divided into two 15-minute breaks with the employee’s consent.
What are the maximum hour rules?
Generally, employees cannot work more than 8 hours a day and 48 hours per week, however special rules apply for certain industries (e.g., construction), while others are exempt from the hours of work rules altogether (e.g., professionals). In most cases, an employee must receive at least 11 consecutive hours off work each day. An employer may also enter into an agreement with its employees (or the union representing them) to modify these rules subject to governmental approval.
Ontario legislation also allows for employees to work more than 48 hours in emergency situations.
How should overtime be calculated?
In Ontario, overtime is payable at one and a half times the employee’s regular rate for all hours worked in excess of 44 hours per week. However, special rules exist for certain industries and managers and supervisors.
For federally regulated corporations, overtime is calculated as one and a half times the employee’s regular rate for all hours worked in excess of 8 hours per day or 40 hours per week, whichever is greater. However, special rules exist for certain industries and managers and supervisors.
What exemptions are there from overtime?
Employees who occupy a managerial or supervisory role are exempt from the overtime rules under the Employment Standards Act, 2000. Even if they perform other kinds of tasks that are not managerial or supervisory, managers and supervisors are not entitled to get overtime pay if these tasks are performed only on an irregular or exceptional basis. According to the Ontario Ministry of Labor’s policy manual:
- “Exceptional” suggests that non-supervisory or non-managerial duties may be performed as long as they are being performed outside of the ordinary course of the employee’s duties.
- “Irregular” implies that although the performance of non-supervisory or non-managerial duties is not unusual or unexpected, these duties are unscheduled or sporadic.
- In order to determine whether an employee’s work is considered managerial or supervisory in character in Ontario, an employer should consider:
- What percentage of a manager’s time is spent performing non-managerial roles?
- How frequently do managers perform non-managerial work?
- Are managerial and non-managerial tasks performed at the same time?
- Are managers expected to perform non-managerial work on a regular or scheduled basis,or only in exceptional or unforeseen circumstances?
- Are managers evaluated on their performance of non-managerial work?
- What percentage of time do managers perform the same work as sales associates?
- How frequently do managers perform non-managerial work (e.g., do they perform the work of a sales associate every day or once a week)?
Special exemptions also exist for some commissioned salespersons, professionals (e.g., lawyers,engineers, dentists, and architects), and information systems professionals. Film and television industry employees are exempt from Ontario’s hours of work laws, but not the requirement to pay overtime.
What payroll and payment records must be maintained?
An employer must record and retain the following information for each employee.
The employee’s name, address and starting date of employment must be kept for three years after the employee stopped working for the employer.
The employee’s date of birth if the employee is a student under 18 must be kept for either three years after the employee’s 18th birthday or three years after the employee stopped working for the employer, whichever happens first.
The hours worked by the employee each day and week must be kept for three years after the day or week of work to which the information relates.
If an employee receives a fixed salary for each pay period and the salary does not change (except if the employee works overtime) the employer is only required to record:
- the employee’s hours in excess of those hours in the employee’s regular work week; and
- the number of hours in excess of eight per day (or in excess of the hours in the employee’s regular work day, if it is more than eight hours).
Employers are not required to record the hours of work for employees who are exempt from overtime pay and the provisions for maximum hours of work.
Retention of written agreements to work excess hours or average overtime pay An employer must retain copies of every agreement made with an employee to work excess hours or to average overtime pay for three years after the last day on which work was performed under the agreement.
Hours worked by employees of temporary help agencies that are assigned to them must be kept for three years.
Retention of vacation time records
Employers are required to keep records of:
- the vacation time earned since the date of hire but not taken before the start of the vacation entitlement year,
- the vacation time earned during the vacation entitlement year,
- vacation time taken (if any) during the vacation entitlement year, and
- the amount of vacation time earned since the date of hire but not taken as of the end of the vacation entitlement year.
The records must be retained for five years after they are made.
Retention of vacation pay records
The employer must also keep records of the vacation pay paid to the employee during the vacation entitlement year and how that vacation pay was calculated. These records must be made no later than seven days after the start of the next vacation entitlement year or the first payday after the next vacation entitlement year ends, whichever is later. This information must be kept for five years after the record of vacation time and pay was made.
Information contained in an employee’s wage statement information must be kept for three years after the information was given to the employee.
All documents relating to an employee’s statutory leaves under the Employment Standards Act, 2000 must be kept for three years after the day the leave expired.
DISCLAIMER: This publication is for information purposes only and its provision does not form a lawyer-client relationship or constitute legal advice. Employment law is a constantly evolving field, so you should contact a Dickinson Wright LLP employment lawyer to obtain advice with respect to any particular legal issue or problem.