Law covers minimum wage, notice periods and dispute resolution in province
On July 1, Ontario’s new Digital Platform Workers’ Rights Act takes effect, significantly altering the working conditions for people engaged in services such as ride-sharing and food delivery through platforms like Uber, DoorDash, Instacart and Lyft.
The new rules will keep HR busy in mandating minimum wage and notice periods, along with a “right to information” that covers pay calculations and performance ratings, and more intensive record-keeping.
And breaking the rules is not a good idea: The government has committed to enforcing the new regime with significant penalties for non-compliance.
“That's one of the strongest changes under this legislation… if those rules are not followed,” says Zoya Alam, a lawyer at Pallett Valo in Toronto.
“Some fines are pretty robust, they can go up to $500,000… And, in some cases, if you have a corporation, and the corporation has directors, directors can have liability as well.”
Which ‘workers’ are involved?
Among the most notable elements of the new act is the broad definition of "worker,” with the government stating the purpose of the legislation is “to establish certain worker rights for workers, regardless of whether those workers are employees.”
They've defined worker as anyone who performs work through these services, according to Paul Broad, partner at Hicks Morley in Halifax.
“I don't think you have to be an employee for this to apply to you. And so that's helpful because it means that they provided some basic protection to everyone.”
But it doesn't go beyond that, he says, in that it doesn't create a right to vacation pay or holiday pay, which an employee would be entitled to.
And it’s a different approach to that taken in B.C., where online platform workers are considered employees for the purposes of the Employment Standards Act.
In Ontario, there will always be the ability to challenge your status and say, “I'm really an employee, and I should be paid all the wages under the Employment Standards Act,’” says Broad. “But certainly this statute does not go that route.”
There have been situations where a lot of gig economy workers and digital platform workers were mischaracterized as independent contractors, says Alam, so they wouldn't be eligible for certain entitlements under provincial employment standards, such as vacation pay and minimum wage.
Wage protections and transparency
Ontario’s new law introduces mandatory wage protections, including entitlements to the province’s minimum wage and provisions around tips.
“They have a general right to getting their tips and gratuities without deductions,” says Broad, adding there are restrictions on this.
Transparency is also central to the legislation when it comes to the “right to information.” Within 24 hours after an individual is given access to an operator’s digital platform “for the purpose of accepting or declining to perform digital platform work,” the operator must provide them the following information in writing:
- A description of how pay for digital platform work is calculated.
- Whether tips or other gratuities are collected by the operator and, if so, when and how they are collected.
- The recurring pay period and recurring pay day established by the operator.
- Any factors used to determine whether work assignments are offered to workers and a description of how those factors are applied.
- Whether the digital platform uses a performance rating system and whether there are consequences based on a worker’s performance rating or a worker’s failure to perform a work assignment and a description of those consequences.
The new rules are intended to put some “stability and knowledge” into the hands of workers, says Broad.
“For example, they have to have a recurring pay period and pay day, meaning at least the person now knows when they're going to receive their money... we now have predictability around that,” he says.
In addition, record-keeping is very important under this legislation, says Alam, as “there's a requirement to keep records for at least three years after a workers' access to the platform has ended.”
Notice of suspension for digital platform workers
Another important provision of Ontario’s new law concerns the removal or suspension of a worker's access to the platform.
“The new rules will require the operator to provide a reason why a worker is being removed… because, of course, if you are removed, you can't be providing services, and you're not earning any money. And if the removal is going to be for 24 hours or more, the operator has to provide two weeks’ advance notice of the removal,” said Broad.
“So, there’s a very small notice provision built into it, a minimum notice provision.”
But there are exceptions to the rule, including for willful misconduct — “that is not trivial and has not been condoned by the operator” — and public safety concerns.
“If there's a public safety concern or there's some sort of legal incapacity to perform the work, or there's some misconduct, the two-week notice period is not required,” says Alam. “However, for any other reason for restricting or suspending a worker's access, then two weeks is required.”
The standard for suspension echoes current law around willful misconduct involving significant wrongdoing, she says: “It's similar to a threshold for just cause employment terminations under Ontario's Employment Standards.”
Dispute resolution in Ontario
Understandably, there are also reprisal protections for the platform workers.
Broad explained: “So, if somebody's asking about ‘I didn't get my tips, where's the information you're supposed to be providing me? What's the reason why you've taken me off the service?’ they can't have negative consequences as a result of that.”
Plus, any disputes must be handled in Ontario, addressing past controversies over foreign arbitration clauses. Back in 2020, the Supreme Court of Canada scrapped a clause in Uber’s services agreement requiring workers to take their disputes to the Netherlands. The court ruled it was unconscionable and unenforceable, leaving those in the company’s employ in Canada free to pursue employment issues in Canadian courts.
Ontario’s latest legislation “clearly lays out that any disputes ... between the digital platform operators and any workers who are assigned work, it has to be handled within Ontario,” says Alam.
Employer obligations and preparations
Operators were given several months to prepare, with final regulations released in September 2024.
The long lead time makes sense given the changes required of employers and HR when it comes to pay calculations, performance rating systems, worker assignments and record-keeping.
“You can't do these kinds of changes to your systems and information preparation... immediately. It takes time,” said Broad.
“An organization, for example, that is going to set up for the first time in Ontario would have to go through all of that and make sure they understand the law and what they'll have to have in place, because ... it may differ from what they have to do in other places.”
HR should also be prepared for questions from employees, he says.
“I'm guessing a lot of the workers will have questions as [the legislation] rolls out, especially if the government starts to issue announcements again — people may see those and then start asking questions, and there'll be a lot who will probably be expecting things to change right on day one.”
Compliance officers and penalties in Ontario
By now, employers should have reviewed their policies and ensured proper measures are in place, such as record-keeping, says Alam, “and then even some training on reprisals and ensuring that their policies are clear.”
And employers will want to be aware of penalties for misbehaviour.
“Any workers who believe their rights under this new legislation have been violated or breached… can file complaints with Ontario's Ministry of Labour, Immigration, Training and Skills Development," she says, adding that, "operators are prohibited from retaliating or reprising against the workers who choose to file a complaint."
Compliance officers can impose penalties on operators which can range from as low as $15,000 for a first offense up to $50,000 for repeated offenses within three years, says Alam, “so there are some pretty in-depth enforcement and compliance measures.”
The bulk of the statute, says Broad, is setting up a parallel enforcement process that’s similar to what you would find under Ontario’s Employment Standards Act.
