Ontario’s Bill 148: Compliance concerns

Employers that maintain minimum standards will see overall costs increasing
By Lyndee Patterson
|Canadian HR Reporter|Last Updated: 03/29/2018

Regulatory compliance is an exercise in due diligence. Whenever laws change, HR professionals must add impact analysis and project management to their core roles.

With Ontario’s introduction of Bill 148 in June 2017, this was particularly true: The legislative amendments impacted both unionized and non-unionized operations.

Areas of amendment include holidays, vacations, overtime and leaves. More changes are to follow on Jan. 1, 2019, including changes to scheduling, on-call and call-in pay rules.

Bill 148 directly impacted the minimum protections offered by employers. Although its most famous provision is the increase in the minimum wage — to $14 as of Jan. 1, 2018, and $15 in 2019 — the changes are broader and include holidays, vacations, leaves and scheduling.

Employers — regardless of whether they adhere to the minimum standards or offer more generous benefits and flexible work arrangements — will need to evaluate the impacts of the changes brought forward by Bill 148. This includes reviewing human capital management infrastructure, compensation structures and workplace policies and procedures.

Extended parental benefits

Employees across Canada have the option to extend the period over which they receive their combined maternity and parental employee insurance (EI) benefits — from 12 months to 18 months.

There is a distinction between federal EI benefit entitlements and provincially determined job-protected leave periods.

As of the date of publication, only employers that are federally regulated or in Ontario and Alberta are required to offer eligible employees the option of 18 months of combined maternity and parental leave. New Brunswick proposed amendments on Feb. 2, 2018, (Bill 44) that would add that province to the list.

The extended EI benefits are available to the parents of children born after Dec. 3, 2017.

In provinces that don’t offer the assurance of a job-protected leave, it’s unclear whether the option to receive 18 months of benefits will gain traction. Parents may, however, be more likely to share the time away from work and employees may request voluntary leave to align with the benefit.  In provinces where the new leave period is a required option, employers should modify or develop policies to appropriately set expectations.

Business owners need to examine current offerings and adapt them as needed. Specifically, employers may need to examine leave or EI top-up policies to ensure they are delivering parental leave benefits at the level they intend.

Minimum wage, holiday pay

In Ontario, the minimum wage increase, removal of holiday pay proration, increased vacation entitlement and broader application of the three-hour rule will bring greater protections, payouts and flexibility to employees.

Employers that maintain minimum standards in their operations will generally see an increase in overall costs due to vacation and holiday pay changes. Employers that offer more extensive benefits packages and flexible work arrangements will notice a less significant impact to the bottom line. Regardless of which category an employer falls into, a review of the requirements is recommended. 

Other key changes

Mandating equal pay: Part-time, temporary and seasonal employees who perform substantially the same job as full-time employees will be entitled to be paid the same. And temporary help agencies that perform substantially the same job as employees at the client company will be entitled to be paid the same.

Differences in rates of pay will be permitted where there is a seniority, merit or production-related system that assesses factors other than sex or employment status.

Domestic/sexual violence leave: Employees can take up to 10 days and up to 15 weeks off when they or their child has experienced or is threatened with domestic or sexual violence. The first five days of the leave are to be paid.

Misclassifying employees as ‘independent contractors’: Employers that improperly classify employees as independent contractors could face monetary penalties and prosecution. The onus is now on the employer to establish the status of the individual as an independent contractor.

Stronger record-keeping obligations: In addition to existing requirements to track time and vacation, under the 2019 scheduling, on-call and call-in pay amendments, employers will also be required to keep records of:  dates and times an employee was scheduled to work or be on-call; any changes made to the on-call schedule; dates and times an employee worked; and any cancellations of a scheduled day of work or scheduled on-call period of the employee, and the date and time of the cancellation.

Lyndee Patterson is a senior compliance counsel at Ceridian in Winnipeg. For more information, visit www.ceridian.ca.


What should we do?

This checklist should help Ontario employers gauge the scope of the changes needed to reduce exposure to risk:

Review and modify benefit top-up policies:

•Understand the financial implications of the new extended leave option on top-up programs.

•Assess the cost of various options and consider the fairness of its impact.

•Seek legal advice if considering reducing employee benefits.

Plan your workforce:

•Assess temporary staffing requirements, as well as training and retention strategies, to ensure you have access to adequate resources during longer periods of leave.

Engage the payroll or benefits team: Understand current processes and consider what will need to change within the payroll and HR systems to help manage compliance and ensure employees are paid vacation, overtime, holiday pay and benefits in accordance with current requirements.

Communicate: Set expectations with employees. It’s essential to ensure they clearly understand:

•the impacts of recent changes on their pay (vacation, holiday, overtime)

•their options and obligations under the new and modified leave provisions

•the availability of 12 months of combined maternity and parental EI benefits over 18 months

•how internal processes may change in response to the 2019 changes around scheduling.

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