Remembrance Day Enacted as a Legal Holiday

poppies in a fieldRemembrance Day in the Spring? With long weekends on the horizon as summer finally rolls in, we turn our minds to the holiday that only some of us get off – Remembrance Day.

Spring discussion of Remembrance is, in fact, timely. In March 208, a law amending the Holidays Act passed in the House of Commons. The change to the Holidays Act makes Remembrance Day a legal holiday, along with Canada Day and Victoria Day. The addition of Remembrance Day to the Holidays Act does not, however, mean that everyone will now get the day off work. Whether employers are required to give employees the day off is up to the provinces. Remembrance Day is currently a statutory holiday in every province except Manitoba, Ontario, Quebec and Nova Scotia.

Federal legislators recognize that adding Remembrance Day to the Holidays Act does not practically have much effect, but are hopeful that the change will encourage the outlier provinces to recognize the holiday and give employees the day off.

In Ontario, public holidays have lately been a contentious issue. The Bill 148 change to how public holiday pay was calculated, which generally saw part-time workers getting paid for a full day on a public holiday, is being reversed. For more information on what this is all about see our recent post on public holiday pay change. Whether Ontario can tolerate more changes in the employment landscape remains to be seen and will also depend on who wins our provincial election. Election Day is June 7 in Ontario. Don’t forget to vote! Read these other posts if you’re curious about voting rights and time off work to vote.

As always, if you need help navigating legal issues in your workplace please get in touch.

Everything you ever wanted to know about Bill 148 but were too afraid to ask

the number 148 in a green circleOver the past year we have spent a lot of time thinking, writing, presenting and advising on Bill 148. As Toronto employment lawyers the Ontario employment laws are our bread and butter. Bill 148 overhauled many aspects of the laws we work with every day. This post provides an overview of some of the most significant changes and directs you to resources elsewhere on our blog and our site to help you navigate the changing legal landscape of your workplace.

Background

Bill 148 received Royal Assent from the Ontario legislature in November 2017. The Bill made significant changes to the Employment Standards Act (ESA) and the Labour Relations Act, among others. The Bill also changed the Occupational Health and Safety Act, banning mandatory high heels for women in most industries. Some changes, mostly related to leaves of absence, came into force in early December with the majority following on January 1, 2018. Many changes are still to come, including additional increases to the minimum wage and scheduling changes in January 2019. You can get a full breakdown of the Bill 148 timelines by accessing the Compliance Checklist in our Bill 148 Compliance Program.

Highlights of the Changes

As we’ve helped our clients to navigate the changes we’ve blogged and advised on a variety of topics. The Bill 148 changes are largely employee and union friendly and have presented both financial and practical challenges for our employer and management clients. Below is a short round-up of Bill 148 topics we have covered on our blog.

Leaves

In December 2017, the federal government changed the Parental Leave program so that new parents in federally regulated workplaces could take up to 18 months off of work. With Bill 148, the Ontario government followed suit by amending the ESA to allow for the same benefit for workers covered by provincial legislation. For an overview of the various types of leaves created and changed by Bill 148, see our post on Scheduling, Leaves and Vacation.

One leave change that has gotten a lot of attention is the expansion of Personal Emergency Leave. Bill 148 amended this ESA leave to provide all employees with two paid days of leave and eight unpaid days for an illness, injury or an urgent matter related to an employee’s health, or the health or death of an employee’s loved one. The full ten days of leave are available to all employees, even those who are short-term. Check out our post on Personal Emergency Leave for Short-Term Workers for a full explanation.  

Vacation

The Bill 148 changes to vacation entitlements also created a lot of buzz in the workplace. January 1, 2018, saw workers with at least five years of seniority getting bumped up from two weeks of vacation per year to three. See our post on Vacation Entitlements for more on this topic.

Equal Pay for Equal Work

The Equal Pay for Equal Work amendments came into force on April 1, 2018. These change how part-time, casual or seasonal staff are paid. It is now a legal requirement that compensation be equal for all employees performing substantially the same job, regardless of their employment status. Exceptions to this requirement can be made based on seniority, merit or where employees are paid based on quantity or quality of production.   

Public Holiday Pay

The most recent Bill 148 news item is related to Public Holiday Pay. Reportedly the Bill 148 change to how Public Holiday Pay is calculated generated a high volume of Ministry of Labour complaints. Consequently, this change is being reversed. Starting July 1, 2018, Public Holiday Pay will be calculated according to the pre-Bill 148 formula. For further details see our post on the Public Holiday Pay changes.  

Preparing for the Future

We recommend that employers prepare for January 1, 2019 changes now, specifically those related to scheduling. For example, the Three Hour Rule changes will impact how employers build their schedules and when they notify employees of those schedules. See our Scheduling, Leaves and Vacation post for an overview of these changes.

We have also blogged about wage changes and changes affecting unionized workplaces. Few in Ontario would have escaped the news about the minimum wage increase on January 1, 2018, from $11.40 to $14.00. It will increase again to $15.00 per hour on January 1, 2019. Changes affecting unionized workplaces largely provide more protections for unions and make it easier for workplaces to unionize.

Because Bill 148 is so far-reaching, we’ve prepared an entire client program to get employers up to speed. You can purchase access to our Bill 148 Compliance Program, including a full length eBook, four training webinars and a Compliance Checklist by contacting us.

Bill 148 has become one of our favourite topics. If you need advice about how to implement any of the changes specific to your workplace, we would be pleased to assist.

Social Media and Recruitment

It has become commonplace for employers to review the social media presence of candidates before hire. A look at a candidate’s Facebook profile, Twitter or LinkedIn is a different kind of background check. How a candidate presents themselves on social media can tell an employer a lot about them, but potentially get employer into hot water. Employers might also be disconcerted by a lack of social media presence from a candidate.

While social media can be an important and useful recruitment tool, employers need to use it with some caution. A Facebook account, even one with decent privacy settings, might tell an employer if the candidate is a parent, if they like to party, where they have gone on vacation, how they lean politically, what concert they went to last week and so on. While some of this information may be harmless, some of it could run an employer into human rights issues. While it is impermissible to ask a candidate if they have children in a job interview, if their Instagram is all bump and baby pictures that is information an employer will have. Decisions about whether to hire cannot, under human rights legislation, be made based upon prohibited grounds such as family status, age, religion or other protected characteristics which may be evident from a candidate’s social media presence.

On the other hand, a social media check may provide an employer with valuable information about a candidate’s level of tech savvy or about their professional judgment. It may be reasonable to decide that a candidate is not an appropriate spokesperson for your daycare if they are constantly tweeting obscenities. In order to avoid potential human rights issues, employers who do want to conduct social media checks should have the check performed by someone other than the hiring manager. The individual who conducts the review can provide the hiring manager with any pertinent information and keep information that touches on protected grounds to themselves.

What if an applicant has no online presence? Although it may sound strange, there remain a significant number of adults who do not have a social media presence. For example, only around 25% of American adults use Twitter. A similarly small number use LinkedIn. And, though it is the most popular, I’m sure we all know a few people who have deleted their Facebook. A 2018 study found that 68% of American adults were Facebook users.

What might it say about a candidate who has no social media presence? While it may suggest that they may not be appropriate for roles that require high levels of social media savvy, it also may not. It is likely unreasonable to make any sort of assumption about a candidate based on a lack of social media presence.

Social media is now a part of our lives, including our work lives. While it can be an important tool, employers need to use their good judgment and use it wisely.

If you have questions about using social media in your recruitment process, contact us. Read more about tech in recruiting on our previous post.

Public Holiday Pay Change

The first reversal of a Bill 148 change is on the horizon. On May 7, 2018, the Ontario government announced it will be reviewing the Bill 148 change to how public holiday pay is calculated. The new way of calculating public holiday pay has reportedly generated the most complaints of any of the Bill 148 changes to the Employment Standards Act, 2000.

The new O. Reg. 375/18 comes into force on July 1, 2018. It reverts the public holiday pay formula to the pre-Bill 148 version. This reversion is temporary and O. Reg. 375/18 will be revoked on December 31, 2019. This will allow the Ministry of Labour time to complete their review of public holiday pay and likely means that we can expect further changes.

Calculating Public Holiday Pay

For public holidays prior to July 1, 2018, such as the upcoming Victoria Day holiday, the Bill 148 formula will need to be used. This requires public holiday pay be calculated in the following manner:

  • Divide the wages earned by the worker in the pay period immediately preceding the public holiday by the number of days actually worked (s.24(1)).

After June 30, 2018, public holiday pay will be calculated following the pre-Bill 148 method and in accordance with O. Reg. 375/18:

  • Divide the wages earned by the worker in the four work weeks prior to the work week in which the public holiday occurs and divide by 20.

The effect of the Bill 148 amendment was to give part-time and casual workers a full day of pay for a public holiday, as long as they worked at least one full day in the previous pay period. The former and future method for calculating public holiday pay has the effect of giving workers who do not work full time only a portion of the public holiday pay commensurate with their part-time status.

For more about Bill 148 see our numerous posts on the topic or check out our Bill 148 Compliance Program.

Update on Random Drug Testing in the Workplace

With the legalization of marijuana looming on the horizon this summer, concerned employers are thinking about how to keep drugs out of the workplace. While random workplace drug testing might seem like an attractive option, in Canada the law remains unsettled on what’s permitted. The most prominent legal battle over random drug testing in Canada has been largely centered on Alberta’s oil sands.

The Saga of Suncor Energy & Unifor, Local 707A

In 2012 Suncor Energy Inc. (Suncor) announced that it would be implementing a random drug and alcohol testing program on sites near Fort McMurray. The union (Unifor) grieved the policy on grounds that it was a violation of the workers’ privacy. Unifor was successful in the arbitration that followed.

Following the test set out by the Supreme Court in Communications, Energy and Paperworkers Union of Canada, Local 30 v Irving Pulp & Paper Ltd., Suncor was unable to demonstrate sufficient safety concerns to justify random testing. See the arbitration decision here: Unifor, Local 707A v. Suncor Energy Inc., Oil Sands (Random Testing Grievance).

Suncor subsequently applied for and was successful on judicial review. In 2016, the matter was sent back to arbitration for a new hearing. The decision of the original arbitration panel was found to be unreasonable, primarily on the basis that they had failed to consider general evidence of a substance abuse problem and had emphasized a requirement for significant evidence of a serious problem.

Unifor appealed the judicial review decision to the Alberta Court of Appeal, who agreed with the judicial review decision and directed that the matter be sent back for a fresh arbitration.  

Suncor Unsuccessfully Attempts to Re-Institute the Policy

Meanwhile, Suncor decided to take another stab at re-instituting the random drug testing policy. Previously Unifor had obtained an injunction against implementation of the policy, pending the conclusion of the grievance.

Unifor successfully obtained an extension of their injunction which Suncor then appealed to the Alberta Court of Appeal. The decision of the Alberta Court of Appeal, released this February, upheld the injunction but was split.  

Take Away For Employers

It’s clear that in unionized environments the invasion of privacy imposed by random drug and alcohol testing will not be taken lying down. The drug and alcohol testing landscape is likely to get more complicated with the legalization of marijuana. While we will continue to watch this case, for now it seems that to have a hope of successful random testing employers will need to be able to demonstrate evidence of a drug and alcohol abuse problem related to safety-sensitive jobs.

As with alcohol issues, the human rights, privacy law issues and the implementation of rules around the issue of drugs (legal or not) will all need careful consideration.  The best big-picture approach is to address the issues of objective impairment and objective job performance, and stay clear of looking to monitor the morality of substance abuse.  And perhaps most importantly, any addiction and medically required drugs always need to be placed in a very separate category of disability related steps and policies.

If you have an issue related to substance abuse in your workplace, or would like help designing a drug and alcohol policy, contact us, we’d be happy to chat. Also, check out our past posts on drug policies.

Pay Transparency Act Passes

In March, we blogged about Ontario’s Bill 203 the Pay Transparency Act, 2018. On April 26, 2018, the Bill passed on third reading. The Pay Transparency Act, 2018 (the Act) will come into force on January 1, 2019.

The purpose of the Act is to promote gender equality and equal compensation between men and women through increased transparency around compensation.

Amendments from First Draft

The Bill was amended from its first draft to now require pay transparency reports from a greater number of employers. The Act originally would have required these reports from employers with 500 or more employees and it is now a requirement for employers with 100 or more employees.

There are graduated deadlines with respect to when organizations of different sizes must submit their first report to the Ministry: May 15, 2020, for employers with 250 or more employees and May 15, 2021, for employers with 100 – 250 employees. Once submitted, these reports must be posted online or in a conspicuous place in the workplace. The Ministry will also make pay transparency reports available to the public. Previous drafts of the Bill allowed for the possibility that some classes of employer may be exempt from the reporting requirements. This possibility of exemption was removed.

Requirements

Come January 1, 2019, the Act will:

  • Require publicly advertised job postings to include a salary range;
  • Prohibit employers from asking candidates about their past compensation;
  • Prohibit reprisals against employees who discuss or disclose compensation; and
  • Establish a reporting framework that will require employers with 100 or more employees to track, report and post compensation gaps based on gender and other diversity characteristics.

Employers will need to change job postings to include salary range and may need to amend compensation policies or contracts that speak to employees keeping their rates of pay confidential. Large employers will also need to start gearing up to meet the reporting requirements, coming into force May 2020 and 2010.  

If you have any questions about the new Act, equal pay or pay transparency, please get in touch. We would be happy to hear from you.  

Tax Treatment of Wrongful Dismissal Awards

Taxes change how much money ends up in our pockets and this truism also applies to wrongful dismissal awards. The way settlement money is lawfully characterized can have a big impact on how much goes to taxes and how much an individual gets to keep. In this post we will summarize the basic tax treatment of certain types of awards an individual might receive in a wrongful dismissal action.  

We are lawyers, not financial advisors, so we provide this summary for what we hope is useful information, and encourage readers to seek advice from a financial professional when looking to determine the tax treatment of their severance package.

Notice Damages

Notice damages are considered employment income and are thus taxed like a regular pay cheque. Deductions are taken for income tax, CPP and IE.  This is generally the least tax favourable way to characterize damages but allocating some money to notice damages is generally unavoidable. For example, amounts paid that are the minimum notice under the Ontario Employment Standards Act must typically be subject to regular income tax.

Retiring Allowance

Employees may be able to transfer a payment from their former employer directly into their RRSP. In this instance the amount will be subject to a tax deferral, as RRSP money is taxed when it is withdrawn from the RRSP, presumably in the distant future when you are no longer earning an annual income.

If an employee does not have sufficient room in an RRSP, or needs the money right away, they may be able to characterize an amount as a retiring allowance. A retiring allowance will be subject to a tax withholding rate of 10%, 20% or 30%, depending on the amount.

When the individual files their taxes they will have to pay normal income tax on the amount of the retiring allowance. The preferred tax treatment is therefore temporary.

According to Revenue Canada, a retiring allowance is an amount intended to compensate an employee for their long service or the loss of their employment. A retiring allowance is distinct from notice damages, which are employment income. However, the Ontario Employment Standards Act category of “severance pay” (as opposed to ESA “termination pay”) can usually be characterized as a retiring allowance.

General Damages

General damages are non-taxable. To characterize an amount as general damages, there must be an element of the damages suffered by the individual that is separate from the damages suffered as a result of the loss of their employment. General damages are intended to compensate for personal injury, such as pain and suffering, mental distress or human rights violations.

In considering what portion of a total award can be characterized as general damages consideration should be given to what a reasonable amount of notice would be, as well as what a reasonable general damages award would be, in light of the case law.

Legal Fees

Wrongful dismissal claims often include an amount for legal fees. Legal fees are usually tax-deductible for the employee. As long as the fees were incurred in order “to collect or establish a right to a retiring allowance or pension benefits” (Income Tax Act section 60(0.I)).

Re-Employment Counselling

Amounts paid to an employee for the purposes of re-employment counselling are not considered a taxable benefits and are therefore not taxable.

Take Aways

Considering how money paid at the end of the employment relationship can be characterized is a worthwhile exercise for employers and employees. In addition to legal advice, we strongly recommend that employees always consult with their financial advisors when sorting through the details of their severance package.  

At SpringLaw we regularly review and negotiate termination packages for employers and departing executives. Contact us for advice about your specific situation.

Equal Pay for Equal Work Now in Force

On April 1, 2018 Equal Pay for Equal Work, the new section 42 of the Employment Standards Act (ESA) came into force. This was a Bill 148 amendment. You can read more about the big changes Bill 148 has made to the Ontario employment landscape in our previous posts on this topic.  

Equal Pay for Equal work expands pay equity from pay equity on the basis of sex, to pay equity on the basis of employment status.

Employers now have to pay employees performing substantially the same kind of work the same rate of pay, regardless of their employment status.

Substantially the same work is not necessarily identical work. Work will be considered “substantially the same” if it requires the same level of skill, ability and responsibility, and is performed in the same establishment and under the same working conditions.

Exceptions

Permitted exceptions to the rule are where a difference in the rate of pay exists on the basis of:

  • a seniority system;
  • a merit system; or
  • a system that measures earnings by quantity or quality of production.

Unionized Workplaces

Collective agreements commonly make distinctions to rates of pay on the basis of employment status, and may conflict with this new law. The transition provision at section 42.1(7) of the ESA allows for non-compliant collective agreement provisions to prevail over the legislation until the collective agreement expires, or until January 1, 2020, whichever is earlier.  

Employee’s Right to Request a Review

If an employee suspects that they are being paid less than another employee performing substantially the same job, and that they are being paid less due to their employment status, they can request that their employer review their rate of pay.

The employer must then either adjust the employee’s pay (up not down), or, if the employer believes they are justified with respect to the difference in pay, they must respond to the employee setting out their reasons in writing.

Takeaways

Employers must now be in compliance with the law. Wages will need to be adjusted up to remedy any gaps in pay that exist on the basis of employment status. Wages cannot be adjusted down to bring them into line.

If you need help making sure your workplace is Bill 148 compliant contact us.

What a Year!

cupcake with sparkler candleSpringLaw celebrates its one year anniversary this month.  We kick off year 2 with our new monthly newsletter that we hope will be a useful, quick read to keep you updated on Canadian workplace law.  

Our clients and colleagues have been such an important part of our journey. It’s been a year of thinking through our entire workflow to ensure client experience drives the entire process, implementing new software internally across the board to support our virtual infrastructure, and rethinking how we can bring value and efficiency to every client file. There is plenty of great legal information available online and clients come to us more informed than ever. Our job is not to cut and paste what is already online, but instead, to help you think through your legal strategy, what are best practices to consider, and to sort through the noise of our information-overloaded lives.

Year 1 was great, but year 2 is going to be even better.  We have been piloting an innovative employer subscription program and will be rolling that out formally over the next month.  We want employers big and small to have access to solid and reliably updated core employment law documents, budget certainty and access to legal services that make sense for your stage of growth. Stay tuned for more details over the next while!

Thank you to all of our clients, colleagues, friends and family for a year of support, wisdom and humour. We may be a virtual firm, but we never stop feeling connected to the broader HR and employment law community. Here’s to another year!

Employee Benefits: Government Health Insurance and Employer Benefit Plans

prescription pills on a pharmacy trayBenefits are always a hot topic in employment law. My 2012 post on benefits during the notice period remains my most read post.

On January 1, 2018 the Ontario Health Insurance Plan (OHIP) introduced Children and Youth Pharmacare, drug coverage for children and youth, who are otherwise covered by OHIP and aged 24 and under. In this post we will look at the intersection between government benefits and private drug plans and the impact of this change.

Our US readers may picture Canada as a free health care utopia with free medications, dentist visits and massages for everyone! While many health services are covered, many are not, which is where employee health benefits come in.

What does OHIP cover?

OHIP is the Ontario health insurer. Ontarians have health cards, which they present at the doctor, or x-ray clinic, or emergency room etc. as proof that they are insured by the Province. Similar systems exist in Canada’s other provinces and territories. Delivery of health services is the jurisdiction of the provinces and territories and not the federal government. Using Ontario as an example, visitors and some categories of immigrants may not be able to access Ontario’s health care, because they are not insured by the province.  

OHIP covers most basic medical and emergency services. This includes visits to the family doctor, visits to the ER, walk-in clinic visits, necessary tests and surgeries. If you have to stay in the hospital OHIP will cover the cost of the stay and any medications administered to you in the hospital.

What does my employee need private health insurance for?

You might be thinking, that sounds pretty good and why would my Ontario employees need health benefits at all? The big categories of things that OHIP does not cover are prescription drugs once you are out of the hospital (though now just for those over 24), dental services and eyeglasses. In most cases, Ontarians who require an ambulance will also be required to pay a portion of the cost of the trip. Many depend on employer-provided health benefits to subsidize the costs of necessities that OHIP does not cover, which as our US readers well know, can be substantial.

Take Aways

Health and Dental Benefits are valuable to employees, even in the land of free health care. This is especially true for those employees who have dependants, as benefit plans will typically insure the employee’s family. Now that most medications will be covered for OHIP insureds 24 and under, the necessity of private benefits for kids has gone down. However, employees will still depend on private benefits for dental care and eyeglasses for themselves and their children.

If you have questions about benefits in the workplace we at SpringLaw would be happy to help.  

Note: On March 20, 2018, after we published a version of this blog on First Reference, the Ontario government made an election promise to extend drug coverage to people over 65 by August 1, 2019. Stay tuned!

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