Jan 23, 2024  By John Hyde

New Year More Changes - Ontario to Amend Multiple Employment-Related Statutes

Just weeks after Ontario amended various employment-related statutes by passing the Working for Workers Act, 2023 on October 26, 2023, the Ontario government proposed further changes by introducing the Working for Workers Act Four, 2023 (the “Act”) on November 14, 2023.

The Act was introduced by the Ontario Minister of Labour, Immigration, Training and Skills Development and, it will likely be passed by Ontario’s conservative majority government, in which case it would amend multiple pieces of employment-related legislation. Out of these amendments, most Ontario employers would only be impacted by the proposed changes to the Employment Standards Act, 2000 (the “ESA”), but the Act would also amend the Workplace Safety and Insurance Act, 1997, the Digital Platform Workers’ Rights Act, 2022, and the Fair Access to Regulated Professions and Compulsory Trades Act, 2006. In any event, it is presently unclear when the Act would be passed or come into effect, as it has yet to undergo third reading by the Legislative Assembly of Ontario.  

Employers should carefully review the proposed changes set out below to determine how their business may be impacted, in order to ensure compliance once the applicable requirements come into effect.

Proposed Changes to the ESA

If passed, the Act would amend the ESA by creating new rules pertaining to job postings and how tips/gratuities are shared and paid to workers, among other minor changes.

With respect to job postings, the Act would require all Ontario employers who publicly advertise job openings to specify the expected compensation or range of expected compensation for the position in the publicly advertised job posting. Notably, the Act does not define “publicly advertised job posting”; rather, this term would be defined later through regulation. Similarly, the Act contemplates one or more potential exceptions to this new requirement, which would also be prescribed by regulation. As a result, it is currently unclear what exceptions there would be to this requirement, if any.

Additionally, the Act would prohibit Ontario employers from including any requirements related to Canadian work experience in any publicly advertised job postings, subject to any exceptions which may be prescribed by regulation. Moreover, any employer who uses artificial intelligence (“AI”) to screen, assess, or select job applicants for a publicly advertised position would be required to include a statement in the job posting disclosing this use of AI. The Act would also require employers to retain copies of all publicly advertised job postings for at least three years from the time that they were taken down.

With respect to the sharing and payment of tips, the Act would introduce a few new requirements. First, the Act would introduce a new posting requirement for employers who have a policy allowing the employer, a director, or a shareholder of the employer to share in the tips received by workers. Notably, section 14.4 of the ESA permits an employer, director, or shareholder to share in tips only where they regularly perform “to a substantial degree” the same work as some or all of the employees who share in the tip pool, or the same work as employees of other employers in the same industry who commonly receive or share tips. In relation to this, the Act would amend the ESA to require employers who have such a policy to post it in at least one conspicuous place in their establishment where it is likely to come to the attention of their employees.

Furthermore, the Act would also require that employees be paid tips by: (i) cash; (ii) cheque payable only to the employee; (iii) direct deposit to an account selected by the employee which is in their name; or (iv) another prescribed method of payment. Similarly, the Act would also require employers with a tip sharing policy to retain a copy of the written policy for at least 3 years after it ceases to be in effect.  

As noted above, the Act would also introduce some other minor changes to the ESA, the first of which relates to deductions from wages. In particular, the Act would add a new provision to the ESA clarifying that deductions cannot be made from an employee’s wages, even with their written consent, where their wages were withheld, deducted or required to be returned after a customer of a restaurant, gas station, or other establishment leaves without paying for goods or services. This is what the ESA already requires, but the new provision makes this clearer for employers.

The other minor change introduced by the Act clarifies when a person who is completing training is an “employee” for the purposes of the ESA. Notably, the ESA defines “employee” as including a worker who receives training from an employer where the skill in which they are being trained for is a skill used by employees of the employer. The Act would clarify this definition by amending the ESA to provide that “training” includes work performed during a trial period. Similar to the above, this is not a substantive change to the ESA, it simply provides greater clarity.

The Bottom Line

Out of the proposed amendments discussed above, the new requirements related to publicly advertised job postings would be post impactful for Ontario employers. This is because the vast majority of employers publicly advertise job postings, but many do not include the expected compensation or range of compensation in such postings, given that there is currently no legal requirement to do so in Ontario. Thus, many Ontario employers would need to begin including the expected compensation or range of compensation for positions in all publicly advertised job postings if the Act is passed.

Notably, these new job posting requirements are part of a trend across Canada towards greater pay transparency. For example, British Columbia passed its new Pay Transparency Act on May 11, 2023 requiring BC employers to include the expected pay or expected pay range for all specific job opportunities that are publicly advertised, which follows the passage of similar legislation in Prince Edward Island and Newfoundland and Labrador. However, the legislation in these three provinces also includes other related requirements, such as prohibiting employers from asking job applicants how much they have been paid by other employers. Fortunately for Ontario employers, the Act currently does not include a comparable requirement for Ontario. Nonetheless, the proposed amendments have yet to be finalized, such the government could make changes to the Act before passing it, but that remains to be seen.

If you have any questions regarding the amendments discussed above, or if you require any assistance with ensuring that your business is meeting its statutory obligations, please do not hesitate to contact us for expert legal advice and guidance.

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