New Changes to the Employment Standards Act: Bill 66

Bill 66, Restoring Ontario’s Competitiveness Act, 2019 has just received Royal Assent on April 3rd, 2019. Schedule 9 of Bill 66 addresses matters relating to employment law and amends the Employment Standards Act 2000 (“ESA“) to facilitate some aspects of running a business as well as to reduce the regulatory burden placed upon employers.

Traditionally, employers were required to obtain the Director of Employment Standards’ approval for various issues. Now, however, employers are no longer required to obtain the Director’s approval in making agreements requiring their employees to work over 48 hours in any one week. This effectively removes the oversight once enjoyed by the Director as a means of regulating the maximum hours worked by an employee.

Second, if you have been employed in Ontario, you are likely familiar with the Ministry of Labour’s “Fair at Work Ontario” poster which employers were required to post around the workplace, for everyone to see. Now, with the changes brought on by Bill 66, employers are no longer under a legal obligation to post Employment Standards Act posters in the workplace. The burden has also shifted to the Director from the Minister, to publish the poster.

Third, Bill 66 lessens regulatory requirements around the common practice of overtime pay averaging. Overtime averaging is an agreement between the employer and employee stating that hours worked over a period of two or more weeks may be averaged for the purpose of calculating overtime pay.

This agreement is convenient when an employee’s work hours are irregular, fluctuating from part-time on certain weeks to overtime on other weeks. The averaging of overtime is meant to strike a fair balance for the purpose of equity in pay. However, it may also have adverse effects when applied to a standard full-time work schedule.

Until now, the employer was required to obtain the Director’s approval prior to entering into such agreements with their employees. However, with the changes being introduced by Bill 66, this approval, which represented an added level of protection for employees, is no longer required.

What This Means For You

A practical impact of this change is that your employer no longer needs to go through the hurdle of getting the Director’s permission prior to entering into an overtime averaging agreement with you.

To illustrate the potential negative impact of overtime averaging, here’s an example assuming an hourly wage of $14/hour.

Using the averaging method:

Week 1: 20 hours worked

Week 2: 58 hours worked

Week 3: 60 hours worked

20+58+60= 138/3= 46 (averaged hours per week)

46 – 44= 2 (hours of overtime)

2 x $21 (time and a half) = $42 total in overtime pay

Using the traditional method:

Week 1: 20 hours worked –> no overtime

Week 2: 58 hours worked –> 58 – 44= 14 (hours overtime) x $21 = $294 in overtime pay

Week 3: 60 hours worked à 60 – 44= 16 (hours of overtime) x $21 = $336 in overtime pay

        $630 total in overtime pay

The enormous difference between the two figures demonstrates how poorly overtime averaging can reflect upon an employee’s hours worked, and the lack of adequate compensation received in consideration. As such, please consider seeking proper legal advice prior to signing an overtime averaging agreement.

We also note that changes have been made to the Labour Relations Act 1995, such that public bodies including municipalities, school boards, hospitals, colleges, universities, will now be deemed “non-construction employers”. Characterization as “construction employers” is particularly significant for the formation of trade unions, and the newly ushered change may prevent trade unions from continuing to represent employees belonging to these public bodies.

While this change may be bad news for trade unions, it is good news for qualified contractors. Under the label of “construction employer” entities are restricted from accepting certain bids for their infrastructure projects. The change of characterization means that the bidding process will open up, thus allowing any and all qualified contractors to bid on a big project!

Ultimately, the implementation of such changes will have an impact on overtime hours and pay, access to information and may alter the protection you enjoy as an employee. Whether you are an employer or employee, changes to the ESA 2000 made by Bill 66 can affect you and your business, our team of experienced labour lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (866) 508-2548 or email us at [email protected] and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support with same day response, visit our CLO Program page for our strategic solutions.