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Chapter 6

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Law and Business
LAW 529
Tim Bartkiw

Chapter 6 Employment Standards Act (2000) Key Features: 1. ESAsets minimum standards; cannot waive her rights under the ESAand agree to standards of work that are less generous 2. If an employer promises an employee a greater right or benefit than that provided the ESA, employment standards officer will enforce the greater benefit IF THERE ISA CONFLICT 3. Act covers most employees but exemptions apply to certain occupations and industries. Ex: managerial and supervisory employees and independent contractors 4. Enforcement of rights under ESAis complaint-based process. (Employees file a complaint with the Ministry of Labour) 5. Unionized employees are covered by the ESAbut follow the grievance procedure in collective agreement. 6. ESAbinds all employers – except for : EMERGENCY LEAVEAND SEVERANCE PAY POSITIONS - The ESAwas put in place for entry-level positions and lower paying jobs where employees often lack bargaining power - Also include statutory standards and protections that are set for more Ontario workplaces GENERAL REQUIREMENTS Applications (Section 3) 1. Those not covered include in the following: 1. Employees in federally regulated sectors such as banks, airlines and broadcasting 2. Secondary school students working in a work-experience program authorized by the school board 3. College or university students working under a program approved by the institution 4. Individuals involved in community participation under the Ontario WorksAct, 1997 5. Police officers - except with respect to the lie detector provisions 6. Employees of embassies or consulates of foreign nations 7. Inmates of correctional institutions taking part in work programs 8. People working in simulated jobs for the purposes of rehabilitation; and 9. People who hold political, judicial, religious or trade union offices *REMEMBER that certain employees are exempt from SOME parts of theAct and/or subject to special rules -Managerial/Supervision positions are exempt but must be TRULY managerial: factors include whether or not they have power to hire and make independent decisions Record Keeping – S.15 “ all employers regardless of size must keep accurate records about employees and make them available for inspection from the ministry Ex. If an employee alleges that an employer owes him overtime pay and employer has no reliable records, an adjudicator will usually accept the employee’s claim - There’s specific requirements concerning information that needs to be kept on record for 3 years - Examples: Name, Address for 3 years after employment ends - Information kept in wage statements - Keep records over agreements concerning overtime hours and average hours of work in calculate Posting Information – S. 2 “requires that employers to display in a conspicuous place in the workplace, a poster prepared by the Ministry of Labour that provides information about the Act and its regulations.” Poster must contain : brief summary of key standards, info about the enforcement of the Act, emphasizing that employees CANNOT be penalized for enforcing rights Wages – S. 11 Payment of Wages: Employer to establish a regular pay period and payday for employees and to payALL wages earned during pay period on/or before the payday. ** PARTIAL PAYMENT IS PROHIBITED When employment ends, all wages including VACAY PAY must be paid no later than 7 days after employment OR on the employee’s NEXT regular payday Deductions from Wages and Vacation Pay- S 13 - prohibits an emloyers from withholding or deducting any wages payable to an employee unless it is : - Obliged to do so by statute. Ex : EI, CPP, Income taxes - Obliged to do so brdcourt order. Such, in the case of garnishment order requiring money to be paid to the 3 party [Ex: Child Support Payment] - Authorized by the employee to do so in writing. Requires: specific info concerning the amt of money to be deducted & method of calculating it. SHOULD BE SIGNED, DATEDAND WITNESSED; ex. If employer gives employee a loan- written agreement should include the amt to be deducted each pay period and total amt owed Even with written authorization, employer CANNOT make deductions from wages to cover for FAULTY work. However, with proper authorization it can make a deduction for CASH SHORTAGES or LOST/STOLEN property BUT only if THAT ONE employee has access to and total control over cash + property -Employers are permitted to recover a genuine wage advance or an unintentional overpayment. This MUST be documented and disclosed on the statement of wages & recoveredASAPO CASE TO CONSIDER : Hutchins v. Atlantic Provincial Security Guard Services LTD. How the Case applies to Law: employers generally are restricted to make wage deductions unless they fall within fall within specific exemptions Case: Hutchins V.Atlantic Provincial Security Guard Services Ltd (1995) Facts: Employee of Atlantic Provincial Guard Services was in possession of a rented minivan during course of his employment -Obtained permission for personal use of van on SAT/SUN -Employer failed to inform him about $40 cost of weekend rental -Returned the vehicle with a damaged back door -Cost to repair = $424 - Only driver of the vehicle denied knowledge of damage -Employer demanded he pay for damages through wages -Hutchins refused & job terminated + deducted 464 from paycheque Decisions: Board allowed for the $40 deduction because the vehicle was used for personal benefit -No evidence to suggest employee damaged the van negligently or intentionally -Not entitled to deduct $424 APPROPRIATE REMEDY: to pay wages owing and to sue employee for damages Wage Statements: S-12 - Specifies the information that an employer must provide info on each wage statement and when it must provide it. - Must make a written statement on or before the employee’s payday stating • The period for which wages are paid; • The wage rate; • The gross wage amt and how it is calculated, unless this is communicated in another way • The amt and purpose and each deduction • The amt paid in respect of room or board; • The net wage amount Agreements to Vary Employers and employees can agree to vary standards in 4 ways : 1. To exceed the daily and weekly max hours of work 2. To average hours of work for overtime pay purposes; 3. To compensate overtime hours with time off in lieu of overtime premium pay; and 4. To take vacation time in increments of less than one week • Agreements to exceed to max weekly hours and agreement for avg hours of week MUST BEAPPROVED of the Director of Employment Standards at the Ministry of Labour. • To be enforceable, agreements to vary must be in writing unless otherwise specified An agreement to vary should: • Name the parties • Specify the date it will come into effect and date it will expire; • Specify the employment standard being varied • Specify the new agreement • Contain the signature of both paries • Pertain only to future events and.. • Be understood and freely entered into by the parties Consent to an agreement must be informed and voluntary - The employee must understand the language of the contract or else it may not be enforceable. -Another example is a contract is unenforceable if an employer threatens to fire or reduce the number or reduce pay if they refuse to sign it * Agreement to vary is considered valid unless an employee challenges it Minimum Employment Standards MINIMUM WAGE (S.23 of ESA) -The lowest hourly wage that an employer can pay an employee - Several minimum rates, which depends on the job category; EX. Certain employees such as students who in trust or supervise children or work as camp counselors are exempt from MIN wage General Min Wage Effective March 31, 2009- minimum wage was 9.50; March 31, 2010- min wage was 10.25 SPECIALWAGE RATES 1. Liquor Service –Those who serve liquor directly to customers have a special rate that is lower than min. wage, their wage is 8.90$ effective March 31, 2010 2. Full Time Students under the age of 18 who work 28 hours or less a week have special rate of $9.60 3. Hunting and Fishing Guides – Calculated based on blocks of time, not by hourly wages 4. Homeworkers- EE’s who do paid work out of their homes for an ER are entitled to 110% of general min. wage rate which is $11.28 Special Situations 1.Room and Board: May be a limit on the deductions made for room and board supplied by employers 2. Harvesting 3. Commissions- EE’s that are paid entirely, or in part through commissions are entitled to receive at least the equivalent of min. wage for each hour worked EX: Ruth worked 40 hours and earned $320 in commissions. This amounts to $8 per hour. If the applicable minimum wage is 10.25 per hour, ER owers her the difference b/t her commission pay (320) and what her ER would have paid for the same number of hours at minimal wage. (10.25 x 40) Therefore, Ruth’s employer must pay her an additional $90 Minimum Reporting Pay: Three-Hour Rule - Occasions where an EE is sent home before end of shit b/c business is too slow or an expected shipment does not arrive leads to special rules. - “An ER must pay an EE who is scheduled to work three hours or more and is sent home after working less than 3 hours the greater of 3 hours at the applicable min. wage and the EE’s regular wage. - HOW CALCULATION WORKS: Yassi works 2 hours for an originally 8 hour. Earns 11.00/hr so payment at regular rate 11.00 x2 = 22.00. If applicable min wage is 10.25 the 3 hour rule means she is entitled to 3 x 10.25 =30.75 b/c that amt is greater than 22.00 - This does not apply to students or employees whose regular shifts are three hours or less - Also, inapplicable if the employer has no control over the reason why work is unavailable 2. Hours of Work and Eating Periods S. 17 to 21 of ESAoutline max hours an ER may assign an EE or an EE may agree too in given-time period General Rule • 8 hours per day (or if the employer has established a regular workday longer than 8 hours, the # of hours in that day) and • 48 hours a week Agreement to work excess hours In 2001, the hours of work provisions of the ESAwere amended to allow more flexibility in work schedules. To vary the maximum daily hours, the daily hours the employer must  give non-union employees the most recent version of an information bulletin from the Ministry of Labour entitled “Info for EmployeesAbout Hours of Work and Overtime Pay” and,  Get the employee’s (or union’s) written agreement to the variation.Agreement must include an acknowledgement that the employee received the information bulletin referred to above. To vary the maximum weekly hours, the employers must :  Comply with both requirements for varying the maximum daily hours above  Get approval from the Director of Employment Standards at the Ministry of Labour - Where the director has not yet made a decision, the employees may begin working up to a max of 60 hours a week, THIRTY days after application is made if other conditions are met - Approvals are upto three years if < or equal to 60 hours but one year if > 60 hours - Director may consider such relevant factors as the employer’s history of compliance w/ employment standards and health + safety requirements - Non-union worker may revoke the agreement at any time with two weeks notice while ER’s may revoke it with “reasonable notice” - - May be difficult to apply the right to revoke if an EE has entered into an agreement to work excess DAILY hours when they were hired and agreement was approved by Director of Employment Standards Hours Free From Work Entitled to have certain # of hours free from work  11 consecutive hours off work each day (does not apply to on-call emplyees)  8 hours off work between shifts  24 hours off work every workweek or atleast 48 hours off work two consecutive workweeks Eating Periods and Breaks - Employer must provide a 30 minute eating periodAFTER 5 consecutive hours - Can agree in writing or verbally whether to split it up to 2 eating periods - Not required to be paid eating periods - Meal breaks are not considered hours of work and are not counted toward overtime Emergencies S. 19 – an ER can require an EE to work beyond max hours noted above or during a mandatory rest period, but only so far as it is necessary to avoid interference with ordinary working of employer’s operations Exceptional circumstances:  Dealing with emergencies, such as natural disasters, extreme weather conditions, fires and floods;  Ensuring the continued delivery of essential public services such as hospitals, public transit or firefighting  Ensuring that continuous processes or seasonal operations are not interrupted when something unforeseen such as accident or machine breakdown occurs and prevent others from doing their jobs  Carrying out urgent repair work to the employer’s plant or equipment DO NOT include situations such as rush orders, taking inventory, absenteeism, seasonal busy periods, routine maintenance 3. Overtime General Overtime Pay Rule: Under s. 22 of the ESA, employers must pay EEs overtime pay at the rate of 1.5 times their regular rate of pay after they work 44 hours in a week -Unless the employment contract states otherwise, overtime is calculated on a weekly basis. - Purpose: to compensate EE’s and discourage ER’s from making their workers work excessive hours - Some job categories do not qualify for overtime pay under the ESA.  Any person whose work is supervisor or managerial in character and may perform non- supervisory or non-managerial tasks on irregular or exceptional basis  Managerial duties: hiring, firing and imposing discipline  Employers mistakenly assume that this exemption covers anyone who is paid on a salary (WRONG)  Information Technology Professionals- who work with info systems Case: Tri Roc Electric LTD vs Butler (2003) pg. 178 Decision: Sept 4, 2001 under new ESA– Butler’s duties could no longer be classified as supervisory or managerial b/c he regularly performed non managerial duties such as working with tools and completing electrical work -Entitled to receive overtime premium pay for work performed  If EE works more than one job, EE qualifies for overtime pay if atleast 50% of the hours they work are in job category that qualifies for overtime pay (179)  Ex: Teresa works as cab driver (exempt from overtime pay) and as a dispatcher (not exempt) for 27 and 23 hours respectively. Entitled to overpay? YES! For ALL overtime hours  Salaried employees are entitled to overtime pay if they work more than 44 hours in a week and do not fall within managerial or supervisory  Ex: Thu salary is $600 a week, worked 50 hours this workweek- she is entitled to 6 hours at overtime rate. Divide $600 by 44 (threshold per week) = 13.64 per hr and then 1.5 x 13.64 = 20.46 and 20.46 x 6 hours = 122.76  AveragingAgreements o EE and ER may agree in writing that the employee’s hour of work may be avrged for purpose of determining the employee’s entitlement to overtime pay o Requires approval of the Director of Employment Standards o Payable after the employee has worked an average of 44 hours/week over agreed period Ex: J worked 54 hrs in week 1 and 36 in week 2. With an avging agreement, total # of hours worked = 90 divided by 2 = 45 per week so J would receive 2 hours of overtime pay  Time Off Instead of Overtime Pay o ER/EE may decide EE will receive paid time off instead of overtime pay. o This arrangement must be in writing and must receive 1.5 hours of paid time off for each hour overworked. o Ex. Laila worked 48 hours this week. She is entitled to 4 hours overtime pay but gets that in 6 hours of paid time off (1.5 x 4 = 6) o Paid time off must be taken within 3 months of the week in which overtime was earned or within 12 months if EE agrees in writing 4. Vacation time and pay s. 33-41 of ESA Vacation Time:  EE’s are entitled to atleast 2 weeks’vacation pay if they have worked for an ER for a FULL12 months  Resignation before the 12 months means they are only entitled to vacation pay  Can take vacation time in one or two week intervals but can be taking in less than week intervals IF in writing  Employer is entitled to decide when vacation time will be taken and must give the vacation time within 10 months after it is earned  Periods of inactive service such as time away b/c of layoff, sickness, statutory leaves are included in calculating 12 months’employment  If any EE, including those on leave wants to FORGO vacay time, she may do so with the agreement of the employer and the approval of the Director of Employment Standards  EE cannot agree to forgo vacay pay Vacation Pay:  Entitled to at least equal 4% of wages earned during a 12 month period  FT EE’s, 4% = 2 week’s pay  When determining vacation pay, wages include overtime pay, public holiday pay, termination pay and commissions  Entitlement to vacation pay begins from 1 hour of employment and is given pay at any point even if they work for short periods of time  Vacation pay must be paid in lump sum before the beg of EE’s vacation  Alternatives include 1. Employee being paid by direct deposit on or before payday in which vacay falls 2. Employee takes vacation in periods of less than one week “ “ 3. Agree that payments is to be made at some other time 4. Agree IN WRITING to have vacation pay accrue on each paycheque Vacation Entitlement and Statutory Leaves ofAbsence - Continues to earn credits toward vacation time during statutory leaves of absences. - Impact of leaves on vacay pay depends on terms of employment Public Holidays S. 24-32 rd Nine Public Holidays: New Year’s Day, Family Day (3 Monday of Feb), Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day and Boxing Day Newest holiday: Family Day  Under the ESA, where an ER provides a “greater right or benefit” with respect to a particular standard, ESAprovisions on that standard do not apply  Subject to specific wording in any written employment contract or policy that may indicate otherwise  Eg: agreement policy indicates EEs are entitled to two personal days in addition to the other statutory holidays is bound by this  If no contract exists, the employer does not have to provide exactly the same public holidays such as Family Day as long as it provides a greater benefit. Ex: providing 11 paid public holidays means they don’t have to include Fam day into it Qualifying for Paid Public Holiday They must not. . .  Fail, without reasonable cause to work their entire shift on either their regularly scheduled days of work immediately before or after the public holiday;  Fail, without reasonable cause, to work their entire shift on the public holiday if they agreed or are required to work that day  * For EE’s that work more than one job, they are entitled to a paid public holiday if 50% of work is a job that is not exempt  Who have legitimate reason to not work such as illnesses are still entitled to paid public holiday Calculating Public Holiday Pay: - Adding all regular wages(No overtime) and V. Pay that is owing to an employee in the four workweeks ending just BEFORE the workweek of the public holiday and dividing it by 20 - NTS: Workweek is determined by the employer - Ex 1 : 1,000/ week and works for four week period earns 4000 in month divided by 20 which is $200 a day - Ex 2: Owen earns $20 per hour working part-time on an asrequired basis. Some days he works 8, others he works 2-3 hours. In the 4 week period, she earnt $1000 and therefore his public holiday pay is $50 - Ex 3: Josh is in the middle of his parental leave. He is not entitled to holiday pay b/c he did not earn anything in that time period When a Public Holiday Falls on a Workday - Exemptions: Essential services, hospitality industry, continuous operations - “An EE may agree but cannot be required to work on a public holiday that falls on a regular working day.” - If they do agree… 1. Receive regular wages on that day plus a substitute day off 2. If both parties agree in writing, receive public holiday pay for that day plus premium pay = 1.5 x Regular Rate of Pay 3. Ex: Luke has agreed to work on a public holiday and receive public holiday pay plus premium pay for all hrs worked. Hourly rate is $12/hr and he earned 1920 in four week period. If Luke worked 8 hours on PH, 4. Public holiday pay: 1920/20 =96 Premium Pay: 12 x 1.5 = $18/hour x 8 = 144 144 + 96 = 240 5. If EE chooses substitute holiday then it MUST be SCHEDULED no later than 3 months after holiday but may choose upto 12 months if they agree in writing When Public Holiday Falls on a Non-Working Day 1. Take a substitute day off with public holiday pay within 3 months of the holiday 2. Receive public holiday pay and must do so in writing Special Rules for Certain Industries If they work on public holiday, EE is entitled to either 1. Regular rate of pay for the hours worked + substitute day 2. Public Holiday Pay + Premium pay for each hour worked Special Rights for Retail Workers - Right to refuse to work on a public holiday. - Even if they agree, they are allowed to refuse to work on the holiday if they notify their employers 48 hours ahead - September 4,2001 – have the right to refuse to work on Sundays unless in writing at the time they are hired that they can work Sundays Statutory Leaves ofAbsence ESAnow provides seven types of statutory leaves: pregnancy, parental, personal emergency, family medical, declared emergency , reservist and most recently organ donor.  Not required to pay employees while on leave Pregnancy Leave (S. 46-47) Right to take upto 17 weeks’unpaid time off work.  May be eligible for employment insurance benefits but NOT requi
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