Minimum wage increase, new holiday rules and more: what passing of Ontario’s Bill 148 means for employers

Ontario’s Bill 148, or the Fair Workplaces, Better Jobs Act, was introduced on June 1, 2017. The bill updates workplace laws across Ontario.

The bill was created following the release of the final report of the Changing Workplaces Review, the first-ever independent review of both the Employment Standards Act (2000) and Labour Relations Act (1995). Passed on Nov. 22, 2017, many of the changes come into effect in January 2018, and will require employers to make significant changes to their policies and HR infrastructure.

What are some key changes with Bill 148?

Areas of amendment include holidays, vacations, overtime and leaves, as well as minimum wage. The following summarizes a few* of the amendments to the Employment Standards Act.

• Vacation Entitlement Increase: Minimum vacation entitlement for workers will rise from two to three weeks per year (after five years with the same employer).
• Public Holiday Pay: The calculation for public holiday pay has changed to refer to regular wages in the pay period before the holiday divided by the days worked (rather than a four-week period of regular wages divided by 20).
• Overtime: The Mixed Hourly Rate (a weighted average established for employees with multiple rates) has been eliminated in favour of paying overtime at the rate of the work performed after the weekly threshold is reached.
• Parental Leave: Eligible new parents can take a leave of up to 61 weeks (if pregnancy leave is taken) or 63 weeks (if pregnancy leave is not taken).
• Personal Emergency Leave: Rather than limiting this leave to organizations with more than 50 employees, all workers will be given 10 personal emergency leave days per year – and a minimum of two days would be paid. Further, employees will not have to provide employers with a sick leave note when requesting personal leave.
• Equal Pay for Equal Work: Casual, part-time, temporary and seasonal workers will be paid the same as full-time workers when they are doing “substantially the same” job for the same employer. Workers can also ask for a review from their employer if they feel they are not receiving equal pay, resulting in the employer adjusting the employee’s pay or providing a written response to the review.
• Minimum Wage: Ontario’s general minimum wage will rise to $14 per hour on January 1, 2018, and then to $15 on January 1, 2019, followed by annual increases at the rate of inflation.

More details about the changes can be found in Ceridian’s Compliance Centre.

What Does this Mean for Employers?

Ontario employers will need to evaluate the impacts of the changes brought forth by Bill 148 in context of their operations, including reviewing human capital management infrastructure, compensation structure and workplace policies and procedures.

Here are some key considerations:

Human Capital Management and Workforce Planning

• Consider options for offsetting the minimum wage increase and implications of longer leaves on your top-up program
• Determine how changes to leaves, overtime, vacation pay, etc. are to be incorporated into your current processes
• Outline new processes that need to be created, how documentation will need to be updated, and how to maintain appropriate records
• Assess temporary staffing requirements, as well as training and retention strategies to ensure adequate staffing through the extended parental leave period.

Reviewing Compensation Structure

• Calculate the financial impacts the changes will have on your wage rates for classes of jobs in your organization
• Determine how changes to equal pay, vacation pay and overtime pay will be incorporated into your compensation program

Additionally, it will be crucial to communicate with employees, not only to roll out revised programs and policies, but to ensure they clearly understand the implications of Bill 148 amendments.

*Note: The focus of this list is on employment standards changes. It is not inclusive. There are significantly more changes proposed in Bill 148 than are described here.

Join Ceridian’s educational webinar on Dec. 12 for an overview of the new legislation.