Last year at this time, Ontario HR directors were scrambling to rewrite their HR and employment policies for the Bill 148 ESA changes taking effect at the start of 2018. Six months later, Ontarians went to the polls and elected a new Progressive Conservative government pledged to roll back the controversial bill adopted by its Liberal predecessors. And, sure enough, a repeal bill, aka, Bill 47, Making Ontario Open for Business Act, received Royal Assent on November 21.
So, Now What?
Are you now going to have to go back and erase those Bill 148 HR policy changes you made last year at this time? Answer: Bill 47 will require some revision but less than you may expect. Here’s a rundown of what is and isn’t changing. (See the Chart below for a visual summary.)
The 7 Bill 148 Changes Being Rolled Back
Bill 47 eliminates 7 of the more controversial new ESA employee protections and rights provided for under Bill 148, including:
- The $15 Minimum Wage
Bill 148 increased the minimum wage to $14 per hour, effective April 1, 2018, with another $1 increase slated for Jan. 1,2019.
Bill 47 keeps the April increase but freezes the minimum wage at its current $14 through the end of September 2020. Starting Oct. 1, 2020 Ontario will follow the model used in most other provinces of modest annual increases pegged to the rate of inflation.
- Personal Emergency Leave (PEL)
Bill 148 increased PEL to 10 days per year, the first 2 days of which are paid. It also repealed previous ESA provisions allowing employers to require employees to get a doctor’s note verifying the need for leave.
Bill 47 reduces PEL to 8 days, all unpaid. The new PEL package also consolidates fragments of entitlements from separate leaves to eliminate overlap and duplication, including up to:
- 3 days’ personal illness +
- 2 days’ bereavement +
- 3 days for family responsibilities.
Bill 47 also restores the old ESA rules allowing employers to ask for a doctor’s note and provides that employees must have at least 2 weeks’ continuous service to be eligible for PEL.
- Public Holiday Pay
Bill 148 replaced the old ESA calculation based on wages in the 4 weeks before the holiday with a new formula based on wages in the pay period before the holiday divided by hours worked to earn those wages, which critics contended unfairly awarded public holiday pay to temps and seasonal employees with less than a month’s worth of experience.
Bill 47 restores the pre-Bill 148 formula of total regular wages + vacation pay payable in the 4 work weeks before the holiday divided by 20.
- Equality of Pay for Temps
Bill 148 banned paying different wages on the basis of employment status, requiring employers to pay temps, part-timers and seasonal workers the same wages as regular employees for substantially equivalent work.
Bill 47 goes back to the pre-Bill 148 rules which allow employers to base wage differentials on employment status. Pre-bill 148 ESA pay equity for men and women remains, of course.
- Employee Work Scheduling Rights
Bill 148 gave employees 2 new work scheduling rights, which were slated to take effect on Jan. 1, 2019:
- The right to refuse an employer’s request to work an unscheduled day on less 96 hours’ notice; and
- The right of employees with at least 3 months’ employment to request changes to their work schedules or work place and get a written explanation from their employer if the request was denied.
Bill 47 repeals both new rights.
- Rules in Employee/Independent Contractor Misclassification Cases
Bill 148 said that in cases where individuals claim that an employer misclassified them as an independent contractor to avoid ESA obligations, the employer has the burden of proving that the individual is not an employee.
Bill 47 says that the individual in these cases has the burden of proving that he/she is an employee.
- Administrative Monetary Penalties
Bill 148 raised the minimum administrative monetary penalties for an ESA violation:
- First offence: From $250 to $350;
- Second offence: From $500 to $700;
- Third offence: From $1,000 to $1,500.
Bill 47 restores the old pre-Bill 148 administrative monetary penalty amounts.
The 10 Bill 148 Changes Being Retained
Bill 47 isn’t a total wrecking ball. It keeps 10 of the Bill 148 ESA changes in effect, including:
- The $14 per hour minimum wage increase that took effect on April 1, 2108;
- The new domestic or sexual violence leave, including the 5 days of paid leave;
- The extension of parental and pregnancy leaves in accordance with federal EI changes;
- The increase in family medical leave from 8 to 27 weeks;
- The extension of crime-related child disappearance leave to 104 weeks;
- The extension of child death leave, regardless of whether it’s crime-related, to 104 weeks;
- The minimum vacation pay increases;
- The minimum vacation entitlement increases;
- The new 3 hours of call-in pay rules; and
- The new rules for calculating overtime of employees who get different wages for different work based on actual work performed during overtime hours, rather than on averaging the different wages.
Compliance Strategy: Don’t Jump the Gun
Most of the Bill 47 changes are scheduled to take effect on Jan. 1, 2019. But you’ll need to proceed carefully before revising the new Bill 148 entitlements to correspond with the Bill 47 rollbacks. The risk: Reducing employees’ Bill 148 benefits and rights may lead to claims of constructive dismissal—even if those entitlements are no longer mandatory under the ESA.
Explanation: ESA entitlements are minimum standards. And while you can’t provide less than what the ESA requires, you can provide more. And once Bill 47 takes effect, a Bill 148 benefit package will, in fact, be more generous than the ESA requirements. The problem is that while the ESA doesn’t preclude rollback to the new Bill 47 entitlements, other laws might. This includes the laws giving employees the right to sue for constructive dismissal in response to substantially unfavourable changes to their employment, such as unilateral cuts in benefits and entitlement.
The best way to minimize this risk is to rely on express language giving you the right to modify ESA entitlements in accordance with legal changes. Without such language, you may need to secure employees’ agreement to reversing their Bill 148 entitlements to accord with Bill 47.
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Bill 47 vs. Bill 148: ESA Changes Being Repealed & Retained
|ESA ENTITLEMENT||BILL 148||BILL 47|
|Minimum Wage||*$14 on Apr. 1, 2018
*$15 on Jan. 1, 2019
|*$14 Jan. 1, 2019 thru Sept. 2020
*Annual increases tied to inflation starting Oct. 2020
|Personal Emergency Leave (PEL)||*8 days unpaid + 2 days paid
*Mandatory for all workplaces
*Employer may not require doctor’s note
|*Package of up to 8 days’ unpaid leave including:
>3 days personal illness +
>2 days bereavement +
>3 days for family responsibilities
*Mandatory for all workplaces
*Employer may ask for doctor’s note *Minimum 2 weeks consecutive service required for eligibility
|Domestic or Sexual Violence Leave||*New leave of up to 10 days taken individually + up to 15 weeks taken in full weeks
*First 5 days must be paid
*Minimum 15 weeks consecutive service required for eligibility
|Parental Leave||*May start as late as 78 weeks after child is born or first comes into employee’s custody, care and control
*May last up to 63 weeks (61 weeks for employees who also take pregnancy leave)
|Pregnancy Leave||Employee whose pregnancy leave begins after Jan. 1, 2018, and who isn’t eligible for parental leave may end their pregnancy leave either 17 weeks after leave began or 12 weeks after birth, stillbirth or miscarriage, whichever comes later||Unchanged|
|Family Medical Leave||Increased from 8 to 27 weeks over 52-week period||Unchanged|
|Child Death Leave
|Up to 104 weeks for child’s death regardless of whether crime-related||Unchanged|
|Crime-Related Child Disappearance Leave||Up to 104 weeks for child’s crime-related disappearance||Unchanged|
|Pay for Public Holidays||Wages earned in pay period immediately before holiday divided by hours worked to earn those wages||Old prorating pay formula of calculating public holiday pay as total regular wages earned and vacation pay payable to employee in 4 work weeks before the work week in which the public holiday occurs, divided by 20|
|Substitute Holiday Notice||Employer must provide written statement to employee who opts to take a substitute day off||Unchanged|
|Minimum Vacation Entitlement||*2 weeks after each vacation entitlement year if employed less than 5 years
* 3 weeks after each vacation entitlement year if employed 5 or more years
|Minimum Vacation Pay||*4% of wages if employed less than 5 years
* 6% of wages if employed 5 or more years
|Equal Pay||Employer may not base pay differential for same work within establishment on employee’s employment status||Employer may base pay differential for same work within establishment on employee’s employment status|
|Employee Schedule Refusal Right||Right to refuse employer request to work unscheduled day on less than 96 hours’ notice||Refusal right repealed|
|Employee Right to Request Schedule Changes||*Starting Jan. 1, 2019, employees may request changes to their schedule or work location after 3 months’ employment
*Employer must notify when approved change comes into effect or reasons for denying change
|Request rights repealed|
|Call-In Pay||At least 3 hours pay for employees who are on-call or scheduled to work who:
*Are called to work but work less than 3 hours; OR
*Aren’t called to work, e.g., if their shift is cancelled within 48 hours before it’s due to start unless cancellation due to circumstances beyond employer’s control
|Overtime||Calculation of overtime for employees who get different wages for different work based on actual work performed during the overtime hours, rather than average of the different wages||Unchanged|
|Misclassification of Employees as Independent Contractors||In cases alleging misclassification of employee as independent contractor (and thus exempt from ESA) employer has burden of proving that the individual is not an employee||Person claiming to be employee rather than employer has the burden of proving that he/she is an employee|
|Penalties||Minimum administrative penalties for ESA violations of $350/$700/$1,500||Minimum administrative penalties for ESA violations of $250/$500/$1,000|