January 2018
Changes to Ontario's Labour and Employment Laws
On January 1, 2018, numerous changes to Ontario's Labour and Employment laws come into effect under the Fair Workplaces, Better Jobs Act (the "Act"). These changes have significant implications for the Developmental Services Sector ("DS Sector"), and aggravate existing staffing challenges and financial pressure on employers who have been critically underfunded for almost 10 years.
I mplications
for the
DS Sector -
2018 and Beyond
The Act, previously known as Bill 148, was introduced in June 2017 in response to the Final Report of the Changing Workplaces Review. The stated purpose of the Act is to protect vulnerable workers (i.e. part-time, casual, temporary, and seasonal workers). For six months the proposed legislation was subject to review, public consultation, amendment and voluminous submissions from stakeholders in the DS Sector, including OASIS, family groups, and our firm. The Act was passed on November 27, 2017, with very little regard for the interests of people with disabilities or the families or organizations that support them.
The following is a review of the key provisions, their implications and our recommendations to DS Sector employers for complying with the changes and addressing the challenges of the new Act.
Increase in the Minimum Wage
The most talked about feature of the new legislation is the increase to the minimum wage. The general minimum wage will rise from its current $11.60 to $14.00 per hour on January 1, 2018 and later to $15.00 per hour on January 1, 2019. While most agencies in in the DS Sector have wage rates significantly above those proposed, the new minimum wage will create compression issues for all employers. Families and those using individualized funding to purchase supports, who in many cases pay less than the proposed minimum wage, will be among the hardest hit by these changes.
We are pleased to report that, in response to pressure from the Sector, the Government has announced that new funding, for both agencies and families receiving Passport and SSAH, will be released in the new year. It remains to be seen whether the funding increases will be sufficient to offset these new costs.
New Prohibition on Mischaracterizing Employees as “Independent Contractors”
The Act makes it an offence for an employer to improperly classify a person as a “contractor”, “volunteer”, “trainee” or other “non-employee” when the person is actually an employee. Contravention of the Act can be subject to a complaint and investigation by an Employment Standards Officer who has the authority to issue orders to pay back wages, compensation, fines of up to $50k and the possibility of imprisonment for individual offenders, and fines of up to $500k for repeat offender corporations. 
DS Sector employers should carefully consider their relationships with workers they treat as “non-employees” or “independent contractors”. In PooranLaw’s experience, the Ministry of Labour is only too happy to find an employment relationship in any service arrangement that comes close the line. 
DS Sector agencies providing advice and supports to families in relation to Direct Funding should also be wary of advising families to enter into ‘contractor’ relationships with workers, or paying funds to ‘contractors’ on behalf of families where the relationship does not clearly reflect that of an independent contractor.
Families who use individualized funding to purchase supports from direct support workers need to examine their relationships and ensure that they are properly characterizing workers they engage. Many families are legitimately engaging workers as independent contractors due to the independence, flexibility, absence of "control" and minimal amount of funds involved. In other cases, families exert a significant degree of control over workers who perform work in the family's home, on a full or part-time basis, which may put the family at risk of being deemed to employ the worker.
In all cases, it is important that agencies and families engaging and/or paying workers to provide direct supports critically examine the nature of the relationship with each worker and understand the obligations under the ESA, as well as to the WSIB and Revenue Canada, that are triggered by the relationship.
Equal Pay for Part-time, Casual/Relief, Temporary and Seasonal Employees
The Act provides that part-time, temporary, and casual employees and agency workers must receive the same rate of pay as full-time employees when performing:
  • the same work;
  • requiring the same skill, effort and responsibility;
  • under similar conditions.
However, employers remain free to make distinctions in pay rates based on other grounds, such as seniority, qualifications and certification, quantity or quality of work, or any other grounds other than gender, employment status (i.e. full-time/part-time/casual status). We are relieved to see that the Ministry of Labour recently clarified that distinctions based on accumulated hours worked remains a permissible basis for distinctions in pay and we would encourage employers to move towards wage grids based on accumulated hours of work as this will, in many cases, be the only permissible manner of rewarding the significant time and dedication that full-time workers contribute.
Employees will have the right to request a review of their wages (with protection from reprisal) and to receive a written response from their employer.
These rules would come into effect on April 1, 2018 , subject to transitional language granting some relief to employers who have collective agreements in place before April 1, 2018 with conflicting wage provisions. For employers in those circumstances, the Equal Pay requirements will come into effect on the earlier of the date that the applicable collective agreement expires or January 1, 2020.
Employers should be reviewing their classifications, job descriptions and wage grids to ensure that they accurately reflect the work being performed and properly reward hours of work. These changes will increase the costs associated with relief and part-time staff and DS Sector employers may wish to consider alternatives staffing approaches.
New Obligations related to Temporary Help Agencies and 'Assignment' Employees
Effective April 1, 2018, temporary help agency ("temp agency") workers (also known as "assignment employees") will need to be paid the equivalent of what regular staff are paid, resulting in a significant increase in the cost of using temp agency workers.

In addition, effective January 1, 2018, a minimum of 1-week’s notice or payment in lieu will be required for the early termination of a temp agency work assignment, which cost we expect temp agencies will pass along to their DS Sector clients.

The clients of temp agencies will also be subject to new information provision and record keeping requirements when it comes to the temp workers assigned to them by temp agencies.

Finally, DS Sector employers that employ or pay respite providers to perform work assignments with families and individuals in the community should be aware of the risk of being deemed to be a “temporary help agency” for the purposes of the ESA. Where that designation applies a wide range of obligations are triggered under the ESA.

Our clients tell us that temp agencies are already reaching out to communicate anticipated cost increases. DS Sector employers will need to carefully consider the use of temp agencies moving forward and consider alternatives to staffing vacancies.
Scheduling, Shift Cancellation and On-Call Pay
A number of modifications to the scheduling practices of employers will be mandated by the new legislation.
  • Right to Request Scheduling and Location Change - After being employed for 3 months an employee will have a right to request a scheduling or location change, and if the change is denied, to be provided with written reasons by their employer.
  • Right to Refuse Shifts - Employees will have the right to refuse work without a penalty unless provided with 4-days' notice.
  • Cancellation Pay - There will be a 3-hours’ pay penalty for cancelling a shift on less than 48-hours' notice.
  • On-call Pay - On call employees who do not get called in will be entitled to 3 hours pay for every 24 hours on call.
These changes do not come into effect until January 1, 2019 at the earliest (and are subject to transitional provisions for employers subject to collective agreements). It remains to be seen whether any exemptions will apply for various types of employees, including supervisors, managers, residential care workers, or domestic workers. Regulations related to exemptions are currently under review.

These changes have implications for the flexible scheduling of staff and DS Sector employers and may wish to consider alternatives staffing approaches, such as dedicated full-time floaters.
Vacation and Public Holidays
The Act includes provisions that increase vacation entitlements for all employees with 5 or more years of service from the current two weeks per year (with vacation pay in the amount of 4% of wages) to three per year (with vacation pay in the amount of 6% of wages). 
The government has also amended the formula for calculating public holiday pay to clarify that employees are entitled to their "average daily wage" calculated based on the total wages earned in the payroll period prior to the public holiday, divided by the number of days actually worked during that pay roll period. While this is unlikely to change things for employees who typically work five days per week, it will have a profound impact on public holiday related costs for casual and part-time employees who work less than 5 days per week.
Both of these changes come into effect on January 1, 2018, and many employers are still scrambling to put in place payroll practices to capture these changes.
Personal Emergency Leave
Effective January 1, 2018, all workplaces will now be subject to the 10-day personal emergency leave entitlement, with the first 2 of those days being fully paid (i.e. whatever pay would have been received had the employee worked the shift in question). For the first time, this will mean that families and other small employers are subject to paid Personal Emergency Leave ("PEL") requirements.
In addition, employers will be prohibited from requiring (but not necessarily requesting) medical certificates in relation to PEL, with negative implications for managing attendance and absenteeism.
The Act does not address concerns related to the accumulation of paid PEL for employees who work only intermittently. This is very concerning for employers who rely on casual and relief employees. The Act will also serve to incentivize employees to seek out multiple jobs in order to capitalize on paid personal emergency leave from multiple employers. These changes will increase the costs associated with relief and part-time staff and DS Sector employers may wish to consider alternatives staffing approaches, such as dedicated full-time floaters.
For employers who already offer paid leave for various purposes, such as "personal days", "sick leave" and "bereavement leave", the case law suggests that an employer may be permitted to count such paid leaves against PEL entitlements, where the purposes and terms on which the leave and PEL are provided are consistent. We recommend that employers look at their current leave practices, make changes to clearly demonstrate that they are inclusive of and/or count against PEL, and where that is not possible due to their incorporation in a collective agreement, approach the attribution of bargained leaves towards PEL on a case by case basis.
New and Longer Leaves of Absence
Bill 148, as amended, provides for generous new leaves and increases to existing leaves, including:
  • New Domestic or Sexual Violence Leave – 5 days of paid leave, 5 days of unpaid leave, and 13 weeks of leave (provided that any time taken in any week is treated as a full week of leave), to address various absences related to an employee or a child of the employee having experienced sexual or domestic violence.
  • Family Medical Leave – increased from 8 weeks to 28 weeks (provided that any time taken in any week is treated as a full week of leave).
  • Parental Leave – increased by 26 weeks meaning that an employee could take as much as 18 months of leave.
  • Pregnancy Leave – Leave for employees who suffer a still-birth or miscarriage will be extended from 6 weeks to 12 weeks after the pregnancy loss occurs.
  • New Child Death Leave – 104 weeks (2 years).
  • Crime Related Child Disappearance Leave – Increased from 52 to 104 weeks (2 years).
  • Critical Illness Leave – 17 weeks for the care of a critically ill adult family member.
All of these various leaves come with job protection (meaning that an employee must be returned to their pre-leave job at the end of the leave, or if that job no longer exists, a comparable job) and benefit continuance (meaning that an employer must continue to pay their share of benefit premiums for benefits during the leave, so long as the employee pays their share).
Eliminating "Simulated Work" and "On-the-Job Training Exemptions
Simulated Work

Existing language under the ESA provides that persons who perform work in a "simulated job or workplace" for the "primary purpose of rehabilitation" are not employees for the purposes of the ESA and therefore are not entitled to the minimum wage or other benefits and protections associated with employment under the ESA. There is no case law confirming that this exemption applies to DS Sector sheltered work programs or social enterprises, but it is nonetheless the principal defense advanced by agencies in human rights and Ministry of Labour complaints related to social enterprises and other operations in which persons supported perform work-like activities for less than the minimum wage. 
This exemption will be removed from the ESA effective January 1, 2019, thereby adding the force of law to the Ministry of Community and Social Service’s (“MCSS”) “Supporting the Transition to Greater Inclusion: Guidelines for Impacted Programs” (the “Transition Guidelines”) introduced in September 2016, requiring agencies to transition away from sheltered work.
On the Job Training
The ESA previously stated that any person who receives training from an employer is an employee unless:
  1. the person does not receive training in skills used by employees of the employer; or
  2. the training meets 6 conditions, including that the training is similar to that received in a vocational school, is for the benefit of the employee, does not materially benefit the employer, does not displace employees, does not come with the right to employment and is without remuneration.  
Bill 148 eliminated (2) above. Practically speaking, this means that now all “on-the-job” trainees will need to receive at least the minimum wage. However, experiential learning programs (such as co-ops) provided by high-schools, colleges, and universities will continue to be exempt.
This appears to go one-step further than the MCSS Transition Guidelines, significantly restricting the types of training programs that DS Sector agencies are permitted to operate for the benefit of persons supported. As agencies work towards building alternative programming, it will be important to keep in mind these changes.
Increased Risk of Union Certification
Bill 148 amended the Labour Relations Act, and effective January 1, 2018, introduced card-based certification (certification without a vote) for employees in a number of industries, including the temporary help agency industry and the "home care and community services industry". Non-union agencies receiving funding from the Ministry of Health and Long-term Care for home care and community service supports should be aware of the increased risk of unionization.
The government will also introduce a number of other changes which will make it easier for unions to certify employers, including a new process whereby a union can apply to receive the names, contact information and other details about employees of an employer upon demonstrating that they have the support (signed union cards) of 20% of an employer’s employees.
All non-union organizations should be aware of these changes and the increased risk of being certified. This increased risk makes the manner of communicating and rolling out changes in relation to Bill 148 all the more important. Breaches of the ESA, perceived unfairness or takeaways can all breed discontent and increase the likelihood of union organizing.
What's Next?
While the Act has been passed, certain aspects of its application remain unclear, not the least in relation to various exemptions that are currently under review. Until January 1, 2018, the Ministry of Labour is accepting submissions and feedback related to the various regulations under the ESA that currently exempt certain groups of employees from such things as overtime, hours of work and other provisions of the ESA.
Numerous stakeholders from the DS Sector have participated in this review process and filed submissions in relation to these exemptions. We anticipate that regulatory changes will be forthcoming in the weeks and months that follow.

Finally, in response to pressure from the Sector, the Government has announced that new funding, for both agencies and families receiving Passport and SSAH, will be released in the new year. It remains to be seen how this funding will be distributed and whether the funding increases will be sufficient to offset these new costs.
PooranLaw will keep you apprised of any developments as they arise.
January Webinar Reminder
Topic: ESA Audit Preparedness: Your Step-by-Step Guide to Compliance in the DS Sector

Date: Jan 11, 2018

Time: 11:00 a.m. 

Registration: Click here


This topical and timely webinar provides as a step-by-step guide to ESA audit preparedness. Labour and employment lawyers, Cheryl Wiles Pooran and Justin Amaral, will share their insights on how best to achieve compliance, including: 

  • reviewing new compliance obligations and deadlines; 
  • how to conduct a self-audit; and 
  • what to expect when an ESA officer comes knocking. 

After registering, you will receive a confirmation email containing information about joining the webinar.