EMP - Chapter 7 (ESA) - Tagged

Employment Law Overview

Chapter 7: Employment Standards Act (ESA)

The Employment Standards Act (ESA) serves as the foundational law governing the minimum standards of employment across Ontario. Its primary goal is to ensure fairness in the workplace by establishing basic rights for employees.

Key Principles of the ESA

Minimum Standards

• The ESA outlines the minimum terms of employment that all employees in Ontario are entitled to.

• Employers are not permitted to contract out of these provisions, ensuring that employees cannot waive their rights established by the ESA.

• Employers have the option to exceed these standards but may never fall below them.

Rationale for ESA Standards

• The standards set forth by the ESA are intended to protect employees, especially those with less bargaining power, by providing a minimum framework for employment conditions.

• These standards are particularly critical for entry-level and lower-wage positions, where workers may struggle to negotiate better terms.

Displacement of Common Law Presumptions

• The ESA displaces the common law presumption that allows parties to freely negotiate their employment terms. Instead, the ESA enforces statutory minimums that must be followed.

Special Considerations for Unionized Employees

• Unionized employees are covered by the ESA, but they must adhere to the grievance procedures outlined in their collective agreements rather than directly filing complaints with the Ministry of Labour.

Recent Changes to the ESA

• Significant amendments to the ESA have been made recently, including:

  • A requirement for employers with 25 or more employees to generate written policies on electronic monitoring and disconnecting from work, which took effect in 2024.

  • Bill 149 mandates salary disclosure in job postings.

General Employment Standards

Record Keeping and Wage Statements

• Employers are obliged to keep records for a minimum of three years, and for vacation records, the retention requirement is five years.

• Wage statements must be provided to employees, detailing the pay period, wage rate, and other relevant information on or before payday.

Overtime and Wage Regulations

Overtime Pay Standards

• The ESA requires overtime pay for any hours worked over 44 in a week, though employers may begin paying overtime earlier if they choose.

• Employers cannot unilaterally decide to delay overtime compensation beyond what the ESA permits, even with employee agreement.

Penalties for Noncompliance

• Possible employer penalties for violating employment standards include:

  • Orders to comply with ESA standards.

  • Interest on unpaid wages may be enforced against the employer.

  • Administrative fines from the Ministry of Labour.

  • Employees may file civil lawsuits to enforce their rights under the ESA.

Scope and Exemptions of the ESA

Applicability

• The ESA applies to all employers in Ontario, irrespective of their size.

• Enforcement of rights under the ESA typically depends on a complaint-driven process.

Exemptions

• Full exemptions mean that an employee is completely outside of ESA provisions (e.g., federally regulated sectors).

• Partial exemptions apply to specific groups such as managers who may not be entitled to overtime.

Special Wage Conditions

Overtime Pay Exemptions

• Certain roles are exempt from the overtime pay requirements of the ESA, including:

  • Managers who possess hiring/firing authority.

  • Legal professionals, and some sales or taxi drivers.

  • Farm workers engaged in primary production.

Minimum Wage Regulations

• The minimum wage in Ontario is currently set at $17.20 for most employees, impacting both salaried and commission-based workers.

• There are exceptions, such as for commissioned salespersons working outside the workplace and for unpaid internships under specific educational programs.

Employer Deductions

• Employers may only deduct wages under lawful conditions, which include:

  • Statutory deductions (e.g., taxation, pension contributions).

  • Court-ordered deductions (e.g., child support).

  • Deductions based on written employee consent for loans or cash shortages, but not due to poor work performance.

Special Wage Rates

Youth and Special Cases

• The student minimum wage is $16.20, available for full-time students under 18.

• Unique conditions apply for hunting/fishing guides and homeworkers.

Important Employment Conditions

Minimum Reporting Pay

• Employees scheduled for three or more hours who are sent home early are entitled to pay for the time worked and additional compensation for the remaining period of three working hours.

Maximum Hours of Work

• The standard work hours should not exceed 8 hours per day or 48 hours per week. Employee consent is required for any changes in work hours beyond these limits.

Minimum Hours Away from Work

• Employees should have a minimum of:

  • 11 consecutive hours off each work day.

  • 8 hours off between shifts.

  • 24 hours off work every week.

Special Exceptions

Emergencies and Circumstances

• There are exceptional circumstances under which the minimum standards may be adjusted, such as emergencies or urgent repairs, but not for routine matters.

Meal Breaks and Break Periods

• Employees are entitled to a 30-minute unpaid meal break after five hours of work; however, coffee breaks are not mandatory.

Overtime Pay Clarifications

Calculating Overtime for Salaried Employees

• Non-exempt salaried employees are eligible for overtime when they work over 44 hours. Calculating their overtime pay involves determining their regular hourly rate and multiplying by 1.5 for any overtime hours worked.

Example of Overtime Calculation

• For instance, if a salaried employee earns $1,000 weekly and works 50 hours, their overtime compensation would be calculated based on the additional hours worked beyond 44.

Vacation Rights

Entitlement to Vacation Time

• Employees are entitled to at least two weeks of vacation time per year, with an increase to three weeks after five years of service. Vacation pay equates to 4% of gross earnings and must be paid prior to vacation.

Recent Significant Changes to the ESA

Six Substantive Changes

• Recent amendments include:

  • Removal of the $10,000 cap on severance complaints.

  • Extension of the limitation period for monetary claims from six months to two years.

  • New requirements for ESA posters to be distributed at hiring.

  • Joint liability for unpaid wages.

  • Elimination of paid sick leave and pay equity complaints against employment status.

Statutory Leaves of Absence

Updated Leave Provisions

• As of January 1, 2023, there are 15 types of job-protected statutory leaves, ensuring that employees' jobs are safeguarded during their absence.

• Notably, personal emergency leave has been restructured into specific unpaid leaves for illness, family responsibility, and bereavement.