Ontario employers fail to pay $9 million worth of worker wages

Union, expert calls for more action from government to ensure compliance with labour laws

Ontario employers fail to pay $9 million worth of worker wages

Roughly $9 million – that’s the amount of workers’ wages that employers failed to pay back in the 2021-22 fiscal year, according to data from the Ontario Ministry of Finance.

The data was made public after two Toronto-based organizations – Downtown Legal Services and Parkdale Community Legal Services – submitted freedom of information (FOI) requests for the specific data, according to a CBC report.

The data shows that there has been a steep decline in the number of prosecutions for non-compliance with the Ontario Ministry of Finance's orders to pay. It fell from 79 prosecutions in 2017-18 to 12 prosecutions in 2021-22, the Naujawan Support Network (NSN), an Ontario-based group of immigrants fighting wage theft, said in the report. There were just two prosecutions in 2020-21.

Non-compliance by employers

The problem is that employers do not believe there will be repercussions for their non-compliance, NSN said in a letter to the Ministry of Labour last month.

"They regard the ministry as weak and ineffective – an institution that cannot enforce the orders it issues, and that will not prosecute employers who ignore the orders," the letter read, according to the CBC report.

In June, the Royal Canadian Mounted Police (RCMP) searched multiple Southwestern Ontario homes and businesses, and found 31 alleged victims of criminal exploitation. The workers were recruited from abroad and paid substandard wages and housed in poor conditions.

And Anmol Sanotra, a member of NSN, claimed that it’s not just members of minority groups who are not getting paid.

"Interestingly, we have been contacted by everyone – not just international students or work permit holders, but even by citizens," he said.

Recently, the Ontario government announced it will be requiring temporary help agencies (THAs) and recruiters to have a licence to operate in the province as of Jan. 1, 2024, in hopes of better protecting vulnerable and temporary workers. They will be required to pay $25,000 in the form of an irrevocable letter of credit that can be used to repay wages owed to employees.

Historic low number of claims

The number of investigations into employment standards completed by the ministry dropped by roughly 50 per cent from 2014 to 2021, according to NSN.

Last month, the ministry told NSN that it was aware of unpaid wages being an issue, but didn't provide specifics about how it was being addressed, according to Sanotra.

"It's their job to investigate and plug those loopholes that are being exploited by the employers."

However, the Ministry of Labour has recovered more than $110 million in wages and other money owed to employees over the last five fiscal years, it said in an email to CBC.

"Employees are entitled to be paid for the work that they do and we investigate any and every claim for unpaid wages," the ministry said.

One reason for the declining numbers of completed investigations, and subsequently, the number of prosecutions, is that during the COVID-19 pandemic, it received a historically low number of claims, it said.

An employer was liable for two-and-a-half years of unpaid wages due to improper deduction of business expenses from a worker’s commission rather than overall revenue, the British Columbia Employment Standards Tribunal recently ruled.

Latest stories