Ontario Labour Laws — Everything Small Businesses Need to Know

This article is for informational purposes only and does not constitute legal, accounting, or tax advice. The information contained herein is subject to change and may vary from time to time in your region. For specific advice applicable to your business, please contact a professional.

No matter where you do business, if you have employees, even if not in your workplace, you must study the labour laws of that region. Ontario’s governance has changed in the last couple of years, and with the handing over of the reins to the Progressive Conservative (PC) party, one of these changes was the rollback of the Tories’ Bill 148 and the adoption of Bill 47, which specifically applied to labour laws in Ontario.

Why Was Bill 148 Abolished?

According to the PC party, Bill 148’s democratic requirements were dissuading new businesses from settling in Ontario as well as hurting Ontario’s established small businesses. The trickle-down effect was the disappearance of jobs, which potentially hurt workers the most.

The unemployment rate skyrocketed in January of 2018 when Bill 148 took effect. In the aftermath, as business owners adjusted, the market slowly rebounded to the lowest unemployment numbers in recent years by December 2018.

Bill 47 took effect in January of 2019 and is already lifting the burdens of the small-business owner in Ontario.

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What Ontario Labour Laws Changed with Bill 47?

Bill 47 introduced several new labour laws, repealed others and left others untouched. As an employer, it’s vital to be aware of how labour laws develop, and they can change a lot in only a few years. Here’s a look at the most recent Ontario labour laws and how the bill affects you as a small-business owner, and employer, in Ontario.

Bill 47 Increasing Minimum Wage

Under Bill 148, Ontario’s minimum wage would’ve increased to $15 an hour on January 1, 2019. Bill 47 repealed this motion. Ontario’s previous $14 per hour minimum wage remained in effect at least until January of 2020. Since then, however, increases to Ontario’s minimum wage have continued to rise according to inflation. There’s also legislation being considered to boost this to $15, effective January 21. Legislation is constantly changing, and it’s therefore essential to remain updated.

With the introduction of Bill 47, proponents of Bill 148 blocked the new bill from interfering in the lives of workers earning less than $30,000 by issuing a provincial tax exemption. Those who earn up to $38,000 in wages now see significant tax cuts. These aren’t the only changes, with updates to the minimum wage for liquor servers, students under 18, homeworkers, and more.

With Bill 148, any employees in Ontario could take up to two days of paid sick leave. The PC government removed this requirement from labour law books. Your small business no longer has to provide sick employees with paid time away from work. With this removal, however, comes the implementation of unpaid leave of eight days per year. Three days are for sickness, three for personal days, and two for bereavement of any kind. It should be noted, however, that employers can request medical notes from a qualified health professional to verify a works entitlement to personal emergency leave.

In response to COVID-19, in April 2021, the PC government in Ontario amended the Employment Standards Act, meaning employers are required to provide employees with up to three days of paid infectious disease emergency leave. This was added in addition to the existing unpaid, job-protected infectious disease emergency leave. At this time, this is only relating to COVID-19. It should be noted that paid leave may be null after December 31, 2021. It’s suggested employers keep up to date with government resources and information relating to the ever-changing legislation relating to COVID-19.

Holiday Pay

While labour laws can see significant changes, sometimes they stay the same. Ontario’s laws relating to holidays haven’t seen too many significant changes. This means:

  • Employees can still take up to 3.75 months of leave in total if they or their children experience sexual and/or domestic violence.
  • If your employee has worked for you for five years or longer, they can take three weeks of paid vacation per year and are entitled to 6% vacation pay. This was introduced by Bill 148 and is something Bill 47 retains.
  • The minimum vacation entitlement for employees is two weeks for less than five years of service.

It’s still essential to keep updated with any possible changes, as this does not mean future bills won’t develop with changes to holiday entitlements. Government resources are usually the easiest way to learn about any updates to legislation.

Classification of Employees

When a worker is misclassified as a contractor or freelancer, or vice versa, it can financially impact either your business or the contractor/employee. Sometimes misclassification occurs due to simple ignorance of labour laws or not knowing what constitutes a bona fide employee — other times this misclassification happens knowingly.

Under Bill 148, misclassifying an employee was illegal and, if there was a dispute over the classification, the employer carried the burden of proving that the other party was not their employee. With the adoption of Bill 47 in January 2019, the other party now must prove that they were an employee. Penalties for misclassification have lessened for businesses, and more responsibility is put on the worker.

Scheduling Changes

Bill 148 established several rules regarding employee scheduling. Many of these stipulations saw a reversal with the implementation of Bill 47, such as:

  • If an employee has less than four days’ notice, they can refuse a shift without the fear of demotion or losing their job.
  • If an employee has worked for you for three months or longer, they can ask for a change to their schedule or to transfer locations (if you have more than one business location).

An employee must receive compensation for three hours’ worth of their normal wage if:

  • They must be on-call but they are not called in for work.
  • Their scheduled shift gets cancelled with less than two days’ notice.

What Didn’t Change with the Implementation of Bill 47?

Many of Bill 148’s regulations are no longer in effect. But Bill 47 retained some of Bill 148’s language, such as holiday entitlement. With some laws remaining in effect, and others changing, as well as responses to larger issues such as a COVID-19, it can be difficult to keep up with any changes to the employment standards act.

If you have any questions regarding these changes and how they apply to you, you can visit the province of Ontario website.

While there’s a full list of labour laws available, and there’s no substitute for keeping yourself in the know, Square Canada offers some useful tools to help you manage your team. With the ability to track employee hours, the ability to adjust schedules on the fly, and scheduling software to help accommodate any last-minute changes, you can ensure there’s never any missteps or mistakes that could go against labour laws.

Contact us to ask how we can help your small business.