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4. Vacation Pay
(a) Overview
As a minimum ESA entitlement, employees are entitled to two weeks vacation per year [ESA s.33(1)], with pay based of their typical work week (thus covering full-time, part-time and irregular hour employees proportionally).
The vacation entitlement generally accrues at the end of a completed year ("vacation entitlement year" or "VEY") of employment [discussed in (b) below].
Employers are under a legal duty to keep records accounting for vacation time entitlements, allocations and usage. Employees are entitled to receive copies of the information contained in such records [see s.6(d) below].
(b) 'Standard' and 'Alternative' Vacation Entitlement Years
. Overview
Traditionally a 'vacation entitlement year' started counting at the date of employment commencement, and then recurred annually at that same date (a "standard VEY" [ESA s.1]).
However legal changes brought about with the Government Efficiency Act, 2002 [in force 26 November 2002] allowed the employer to 'move' the date at which VEY starts to count for accounting purposes (thus creating an "alternative VEY", commonly the calendar or fiscal year [ESA s.1]). Opting to replace a standard VEY with an alternative VEY creates a "stub period" [ESA s.1(1)] which required some special rules to determine the length and allocation of the vacation entitlement.
Note that both leave and lay-off time count towards a 'vacation entitlement year', and thus towards the accrual of vacation entitlements [ESA s.33(2)].
. Determining the Stub Period
If the shift to an alternative VEY is done at the start of - or within the first year of - employment, then the "stub period" counts from the start of employment to the day before the alternative VEY. If however the shift is made after the first year of employment, then the stub period counts from the day after his last standard VEY ended to the day before the alternative VEY [ESA s.1(1) defn].
For example, let's assume a hiring at 15 April 2003, with the employer at that time using a "standard vacation entitlement year" system (thus having a VEY with an annual cycle starting 15 April). The employer decides that it wants to change to a calendar year "alternative VEY" starting 01 January 2004 (within one year of the start of the employment). The stub period in that case counts from 15 April 2003 to 31 December 2003, a period of 8.5 months.
Note that the "stub period" determination would be the same if the employer was already using an "alternative VEY" system at the date of hiring (15 April to 31 December 2003).
If however the change to an alternative VEY was delayed to 01 January 2005, the stub period would 16 April 2004 to 31 December 2005. The stub period is of the same length - and over the same date period - it's just knocked back a year.
As is the case with full 'vacation entitlement years', both leave and lay-off time count towards a 'stub period' [ESA s.34(3)].
(c) Timing and Allocation of Vacation
. General Rule
Generally, it is for the employer to designate the time at which vacation should be taken, although this is almost always done in consultation with the employee. However, in any event, it should be taken within 10 months of the end of the 'vacation entitlement year' [ESA s.35].
Vacation shall be allocated by the employer in full week periods (ie. a single two-week period or two one-week periods), unless the employee requests smaller periods -and the employer so agrees.
Unless the employee consents, no vacation time off shall be allocated to any period of working notice (of termination) [Reg 288/01, s.7].
. Special Rules for Stub Periods
Vacation generated from a "stub period" produced as a result of the employer establishing an 'alternative VEY' [see (b) above] is proportional to the two weeks (typically, 10 working days) per year principle [see (d) below]. It shall be allocated by the employer as follows, unless the employee requests (in writing) smaller periods - and the employer so agrees [ESA s.35.1(1,2)]:- it should be taken within 10 months after the beginning of the first alternative VEY;
- if the vacation entitlement is two to five days in length, it shall be given in consecutive days;
- if the vacation entitlement is more than five days in length, it shall be given in two periods of consecutive days (which may be separate), one of which must be five days in length.
. Leave and Vacation
Leave time counts towards a 'vacation entitlement year', and thus towards the accrual of vacation entitlements [ESA s.33(2)].
If the allocation of an employee's entitlement to vacation time off conflicts with leave (and even if contractual provisions exist that would otherwise result in the forfeiture of vacation entitlements) the vacation time may be deferred until the leave expires, or to a later date if the parties so agree [ESA s.51.1(1)(2)]. Alternatively, the employee may elect to take the vacation entitlement in vacation pay [ESA s.51.1(3)].
(d) Determination of Vacation Duration
. General
As mentioned above, as a minimum ESA entitlement employees are entitled to two weeks paid vacation per year [ESA s.33(1)]. Where an employee works a typical full-time, 5-days-a-week job this is easy to calculate (10 work days). However special rules apply where employment is part-time or irregular, and where the employer has opted for an alternative 'vacation entitlement period' - thus creating a 'stub period' which still generates partial vacation entitlement.
. For Part-time or Irregular Employment
Where an employee does not work full-time, they are still entitled to two weeks vacation - but of course the vacation pay is smaller just as the part-time employment week is shorter (ie. has fewer hours). In such circumstances the employee is may be required to take their vacation in units that are less than full weeks.
Where this is done (and assuming agreement of the employer if required), the vacation entitlement in days is based proportionally on either [ESA s.33 3)]:- where there is a regular work week, the number of days in it,
- where there is no regular work week, the average number of days worked per week during the previous vacation entitlement year.
. For Stub Periods
As discussed in (b) above, where the employer establishes an 'alternative VEY'it necessarily results in 'stub periods' for which the employee still has a proportional vacation entitlement.
The vacation entitlement for the 'stub period' is calculated as follows [ESA s.34(1,2)]:- where the employee has a regular work week, the vacation entitlement is the simple proportion of two weeks that the stub period bears to a year [eg. a three-month stub period (25%) generates a vacation entitlement of half a regular work week (however many days per week that is)];
- where the employee does not have a regular work week, the basis of determination is instead the average number of days worked per week. [eg. a three-month stub period, with 3 days worked on average per week, generates a vacation entitlement of 1.5 days [25% of two weeks of 3 days each].
(e) Vacation Pay
. Overview
Employees are entitled to "vacation pay" at the employee's regular rate, based on the two weeks' vacation entitlement. This amounts to four percent of the employee's regular wages during the 'vacation entitlement year' (which automatically accomodates situations of full-time, part-time and irregular employment) [ESA s.35.2].
Technically, vacation pay accrues at four percent of regular wages paid at each pay day during the VEY and this money is deemed to be held in trust by the employer for the employee [ESA s.40(1)]. One legal consequence of this is that the vacation pay is not a debt owed to the employee, but actually the employee's 'beneficial property' - a distinction that can become relevant in bankruptcy proceedings. As well, the employee has a lien on the assets of the employer in the amount of any outstanding vacation pay - which also give accelerated creditor preference [ESA s.40(2)].
Special employer accounting and reporting duties respecting the calculation and administration of vacation time off and vacation pay are covered in (h) (below).
. When Paid
While the timing of payment of vacation pay is entirely up to the mutual agreement of the parties [ESA s.36(4)], there are 'normal' rules set down where no such special agreement is made.
The 'normal rule' is that vacation pay is paid at the beginning of the vacation [ESA s.36(1)]. However if the vacation time given is not in complete weeks, or if wages are paid by direct deposit, then the rule is that the employer shall pay vacation pay on or before the regular pay day for the period in which the vacation falls [ESA s.36(2)].
Vacation pay may also be paid at each regular pay day (in increments through the year as it accrues) if the employee consents, in which case the employer must separately itemize the vacation pay in either the "statement of wages" [see (h) below] or in a separate statement [ESA s.36(3)].
When employment terminates with outstanding vacation pay, it shall be paid out with any remaining wage entitlements - either at the next pay day, or seven days after termination, whichever is later [ESA s.11(5),38].
Note that where the employee is represented by a trade union AND where the vacation entitlement is administered through a multi-employer vacation benefit plan, then the timing of the payment of vacation pay is as per that plan - even where the employment is terminated [ESA s.39].
. Where Vacation Time Not Taken Off
The vacation 'time off' entitlement is an ESA 'minimum right' of the employee. However if the employee wishes to 'work through' their vacation they can do so - but only if both the Employment Standards Director and the employer agree to it [ESA s.41(1)].
Further, fruit, vegetable and tobacco harvesters may not waive their vacation time, even if they want to: Reg 285/01, s.26(3)] [see (g) below]).
That said, the right to vacation pay may not be waived by the employee [ESA s.41(2)]. Thus if vacation time off is not taken the employee is entitled to both their vacation pay and pay for the vacation time worked through - the net result being that the employee takes the vacation pay as a form of 'bonus'.
In situations where the employee waives the vacation time off, there are no rules established for when vacation pay is to be paid. As such it is left to the agreement of the parties to pay it in agreed amounts and time [ESA s.36(4)], or at regular pay days in increments as it accrues [ESA s.36(3)].
. Labour Disputes
In the event of a labour dispute in the workplace (ie. a lock-out or strike) vacation pay for pre-scheduled vacation is paid regardless, and such pre-scheduled vacation may not be 'cancelled' by the employer [ESA s.37]. However where the employee is represented by a trade union and the vacation entitlement is administered through a multi-employer vacation benefit plan, then vacation pay is governed by that plan [ESA s.39].
. Building Service Providers
A "building services provider" is "a person who provides building services for a premises and includes the owner or manager of a premises if the owner or manager provides building services for premises the person owns or manages". Building services" are defined as services [ESA s.1 Defns, Reg 287/01, s.1]:- for a building with respect to food, security and cleaning;
- relating to a parking garage or lot;
- relating to a concession stand; and
- of property management relating only to the building.
"Building service providers" are subject to special rules governing situations where they either leave or come into a service-provision role for premises. For instance, incoming "building service providers" are subject to some exceptions regarding normal termination and severance duties with respect to employees that they do not continue with [see Ch. 6, s.7(a): "Termination and Wrongful Dismissal: Some Special Rules Regarding Termination and Severance Duties: Building Service Providers"].
As well, outgoing "building service providers" who do not continue the employment of employees who worked at the former premises are required to pay out any accrued vacation pay to them by the later of the next pay day, or seven days after the employment terminates [ESA s.76(1-2)].
(f) Leave and Vacation Entitlements
The interaction of leave and vacation entitlements is explained in Chapter 5, s.2(g): "Benefits Plans, Leaves and Other Employee Rights: Leave: Leave and Vacation Entitlements".
(g) Farm Worker Vacation Exemptions and Special Rules
Farm employees "whose employment is directly related to the primary production of eggs, milk, grain, seeds, fruit, vegetables, maple products, honey, tobacco, herbs, pigs, cattle, sheep, goats, poultry, deer, elk, ratites, bison, rabbits, game birds, wild boar and cultured fish" are exempt from the normal ESA "minimum standards" vacation provisions (although contractual vacation entitlements may remain) [Reg 285/01, s.2(2)].
However, 'fruit, vegetable and tobacco harvesters' are only exempt from the ESA vacation provisions until they have been employed for 13 weeks. At that point they also become entitled to retroactive vacation time or pay, back to the commencement of their employment. As well, 'fruit, vegetable and tobacco harvesters' may not elect to waive their vacation time entitlement [Reg 285/01,
s.24,26].
(h) Vacation Record-Keeping
. Overview
Employers (or their agents) must keep the below records regarding each employee's vacation time and pay [ESA s.15.1(1)]. These records must be available to both ESA officers [ESA s.16] and employees (see below).
Note that making, keeping or producing false ESA-required employment records, or participation or acquiescing in such activities, is illegal [ESA s.131(1)] - as is providing "false or misleading information under this Act." [ESA s.131(2)]
. General Vacation Records to Be Kept
Recall from (b) above that a "vacation entitlement year" (VEY) is the year-long period during which employees accrue their vacation time and pay entitlement.
Records to be kept by employers regarding vacation include (applicable where both standard and alternative VEYs are used to determine vacation issues) [ESA s.15.1(2)]:- any outstanding (accrued but not yet taken) vacation time stemming from previous VEYs;
- accrued vacation time, and vacation time taken, during the current VEY;
- any outstanding (accrued but not yet taken) vacation time at the end of the current VEY;
- vacation pay paid during the current VEY, including the gross wages and period worked upon which it was calculated.
. Employee Entitlement to General Vacation Records
During a VEY, the employee is entitled to receive a copy of this record on written request, which shall be provided by the employer either seven days after the start of the next VEY or by the first pay day in the next VEY, whichever is later [ESA s.41.1(3)].
After the end of a VEY, the employee is entitled to receive a copy of this record on written request, which shall be provided by the employer either seven days after the request or by the next pay day, whichever is later [ESA
s.41.1(1,2)].
In any event, only one request for vacation information may be made per VEY [ESA s.41.1(4)].
. Additional Records Where "Alternative Vacation Entitlement Year" Applies
Additional records to be kept regarding vacation determined by an alternative VEY include [ESA s.15.1(3)]:- vacation time accrued and taken during the "stub period";
- any outstanding (accrued but not yet taken) vacation time at the end of the stub period;
- vacation pay paid during the stub period, including the gross wages and period worked upon which it was calculated.
. Employee Entitlement to "Stub Period" Vacation Records
During a stub period, the employee is entitled to receive a copy of this record on written request, which shall be provided by the employer either seven days after the start of the next VEY or by the first pay day in the next VEY, whichever is later [ESA s.41.1(3)].
After the end of a stub period, the employee is entitled to receive a copy of this record on written request, which shall be provided by the employer either seven days after the request or by the next pay day, whichever is later [ESA s.41.1(1)].
In any event, only one request for vacation information may be made per stub period [ESA s.41.1(4)].
. When Vacation Information to be Recorded
The above-listed vacation related information shall be recorded no later than the following dates, whichever is later [ESA s.15.1(4)]:- within seven days of the start of a VEY, or
- the first pay day of a VEY.
. Vacation Record Retention
The above vacation records shall be maintained by the employer (or their agent) for three years after they are made [ESA s.15.1(5)].
. Exemptions from Vacation Pay Record Duties
Where the employee has opted to receive their vacation pay in increments at each regular pay day (ie. added to their regular pay) then the employer is exempted from the above record-keeping duties respecting vacation pay (but not time) [ESA s.15.1(6), 36(3)].
5. Exemptions from Minimum Wage, Holiday and Vacation Entitlement Provisions
The following employment and employees are exempt from the minimum wage, holiday and vacation entitlements set out in sections 2-4 above [Reg 285/01, s.2]:- duly qualified practitioners of architecture, law, professional engineering, public accounting, surveying and veterinary science - and students in training for any of them;
- duly registered practitioners of chiropody, chiropractic, dentistry, massage therapy, medicine, optometry, pharmacy, physiotherapy, and psychology and those under the Drugless Practitioners Act - and students in training for any of them;
- teachers (as defined in the Teaching Profession Act) and student teachers;
- commercial fishing;
- salespersons and brokers (as defined in the Real Estate and Business Brokers Act, 2002);
- travelling salespersons on commission - other than route salepersons.
Note as well that fruit, vegetable and tobacco harvesters are all exempt from the general minimum wage, holiday and vacation entitlement provisions - but are subject to special rules on each of these issues. These rules are set out in ss. 2-4 above.
6. Wage Payment and Records
(a) Overview
The employer is required to establish a regular "pay period", an associated "pay day" - and all logically-associated accounting records [ESA s.11(1)].
While tradition dictates that most hourly-paid employees are paid bi-weekly, and mostly salaried employees are paid monthly, there is no actual legal limit on how long a "pay period" may be (though it will have been established early in the employment relationship). It is legally required however that all outstanding wage entitlements from the pay period - other than accruing vacation pay - be paid out on the established "pay day".
Note that making, keeping or producing false ESA-required employment records, or participation or acquiescing in such activities, is illegal [ESA s.131(1)] - as is providing "false or misleading information under this Act." [ESA s.131(2)]
(b) Manner of Payment, Pay Statements and Deductions
. Manner of Payment
At the employer's discretion, payment of wages may be made by either [ESA s.11(2-4)]:- Cash or Cheque (payable to the employee only)
Payment by cash or cheque must be "given to the employee at his or her workplace or at some other place agreeable to the employee".
- Direct Deposit
Direct deposit may be made only to a financial institution account in the employees' name, where only the employee or a person authorized by them has access to the account.
Unless the employee consents otherwise, the financial institution must have a location "located within a reasonable distance from the location where the employee usually works."
When employment terminates, all outstanding wages (and vacation pay) shall be paid out at either: the next pay day, or seven days after termination, whichever is later [ESA s.11(5), 38].
. Pay Statements
On or before a pay day (typically with a paycheque) the employer must provide the employee with a "pay statement" itemizing [ESA s.12(1)]:- the pay period;
- the wage rate (if any);
- gross wages and (unless the information is otherwise provided) how that amount was calculated;
- deductions by amount and purposes;
- the amount, if any, for room or board that is deemed to have been paid to the employee [see s.2(c) above];
- net wages.
If the employee "has access to a means of making a paper copy of the statement" (eg. a computer printer) it may be provided to them by e-mail - but otherwise it must be provided in writing [ESA s.12(3)].
. Pay Statement on Termination
On or before the final wage payment after termination [which is due at the later of either the next pay day, or seven days after termination: ESA s.11(5)] the employer must provide the employee with a final written pay statement itemizing all of the items required in a regular pay statement (see above) [ESA s.12.1] and the following in addition:- gross termination and/or severance pay being paid (if any) [see Ch.6: "Termination and Wrongful Dismissal"] and (unless the information is otherwise provided) how that amount was calculated;;
- gross vacation pay being paid [see s.4 above] and (unless the information is otherwise provided) how that amount was calculated.
. Federal "Record of Employment"
The above-discussed records are required under provincial law embodied in the Employment Standards Act. Federal law however additionally imposes a duty of the employer to provide the employee with a "Record of Employment" (ROE) upon any termination upon termination. The primary use of an ROE is to inform employment insurance authorities of the employee's work history (or at least the employer's version of it).
Note that prolonged lay-offs may be deemed to be terminations: see Ch.6, s.2(f): "Termination and Wrongful Dismissal: Termination and Related Topics: Lay-Offs".
The role of ROEs is discussed more in Ch.6: "Termination and Wrongful Dismissal",
and the "full list of guides and resources" page (linked above) of Isthatlegal.ca links to an excellent government-produced resource on employment insurance.
7. Deductions from Wages
(a) Overview
Subject to the conditions, limitations and exemptions explained below - no deductions, withholdings or returns (deductions in favour of the employer) may be made from an employee's wage payment by an employer except [ESA s.13(1)]:- where authorized by an Ontario or Canadian statute (legislation) or a court order [ESA s.13(2)] ('lawful authority');
- with the employee's written authorization [ESA s.13(3)] ('employee authorization').
Any purported authority claimed under these two exceptions to deduct or withhold wages and to remit them to third parties is voided if the employer subsequently does not so remit the funds to the third parties [ESA s.13(4)] - the net effect being to render the deduction an unlawful under-payment of wages.
(b) "Lawful Authority" Deduction Examples
. "Source Deductions"
Some forms of statutory deduction from wages (generally referred to as "source deductions") are well-known and regular. These include the income tax, employment insurance, Ontario Health Tax and Canada Pension Plan deductions which most people will recall seeing on pay cheque record stubs.
. Court Judgments and Family Support
Others deductions from wages are less common, perhaps the most familiar of these being wage garnishments for unsatisfied court judgments for such things as civil debts and family support orders. The particular procedural rules for garnishments (which can apply to seize most debts owed to the debtor: typically wages and bank accounts) vary with the court from which the judgment originates (eg. Small Claims, Superior Court, Family Court, etc). For an example, the reader may want to review the garnishment procedures explained at the following Isthatlegal.ca link:
Ontario Small Claims Court: Collection [see s.4(b)].
Special rules under the Wages Act (Ontario) [s.7] set a standard limit (regardless of the originating court) of the percentage of wages that may be garnished [20% for civil judgments, 50% for family support] - though there are provisions for both increasing and decreasing those percentages by motion to the involved court.
Readers should be careful to distinguish the situation of garnishing wages directly from an employer, from that of garnishing monies (including deposited wages) from a bank account. Once monies are deposited in a bank account they become vulnerable to a 100% garnishment rate.
(c) Employee Deduction Authorization Restriction
. Overview
Historically, employers have not been shy in attempting various ways to reduce (also 'claw-back' or 'set-off') wages otherwise payable by themselves. An historically notorious form of this was the situation of remote one-company resource towns in which the employer controlled both housing and food supplies (thus deducting both rent and food bills) under abusive monopoly conditions. In response to such situations the ESA and its predecessors have attempted to limit the ability of the employer to make such deductions - even with "consent" of the employee.
Legitimate modern day examples of such employee-authorized deductions include such things as union dues, voluntary charitable donation schemes and contributions to optional health or other benefit plans.
. Authorization Must be Specific
In order for an employee's written authorization to be adequate authority for a deduction, withholding or return of wages by the employer, it must "refer to a specific amount or provide a formula from which a specific amount may be calculated "[ESA s.13(5)].
. Authorization Cannot Relate to Employer Claims; Exceptions
Further, no such employee authorization may be relied upon the deduct, withhold or return wages by reason of:- faulty work;
- a cash shortage, or lost or stolen property - where "a person other than the employee had access to the cash or property".
- "under any prescribed conditions" [none are yet mentioned in the Regulations].
Comment:
The above 'lost or stolen cash or property' provision is worrisome as it comes close to a classically abusive form of such employer deductions. While it can only legally operate with a written deduction authorization from the employee and where the employee was the only one with access to the cash or property, the instigator of the actual deduction will be the suspicious employer - leaving the employee with the burden of disputing the issue.
Employees - particularly in retail and beverage establishments - should be careful to avoid providing blanket written authorizations for such deductions for any like 'the difference between the daily till balance and the register's daily tally'.
That said, it is hard to imagine a situation where someone else did not also have access to the cash or property - be it a co-worker with keys, management, the staff of banks receiving deposits - or even the accusing employer themselves. Any of these could void the employer's right to make the deductions. . Authorization Secondary to ESA Return Orders
Further, any written authorization purporting to authorize deduction, withholding or return of wages is secondary to any ESA orders requiring the wages to be returned to the employee [ESA s.13(5)(c)]. Deduction from such an ESO ordered payment would constitute violation of the ESO order.
(d) OMERS Exemption
Despite the general rules restricting deductions, withholdings and returns from wages [(a-c), above], a participating employer may deduct (and if they do, so must remit) any Sponsors Corporation fee required under a by-law passed under OMERS Act, 2006, s.28 [Reg 285/01, s.3.1]. The OMERS (Ontario Municipal Employees Retirement System) Sponsors Corporation plans the structure of it's members' contributions and
benefits.
8. General Employer Records
(a) Records Regarding Individual Employees and Hours Worked
Subject to the noted exceptions, and for the noted retention periods, employers (or their agents) must maintain employment-related records respecting each employee [ESA s.15(1,5,7)], as follows:- name and address (retention for three years after termination);
- if the employee is a student and a minor (under 18 years old), date of birth; (retention for three years after they turn 18, or three years after termination - whichever is later)
- date of commencement of employment (retention for three years after termination);
- hours worked each day and week (retention for three years after the period to which the information relates);
This 'hours worked' requirement is excepted where either A, B, C or D below apply [ESA s.15(3)]:
A. The employee is salaried [contractual flat rate, as opposed to hourly-calculated: see s.2(a) above for definition], and the employer alternatively records (retention for three years after the period to which the information relates):
- "the number of hours in excess of those in his or her regular work week", AND
either
- "the number of hours in excess of eight that the employee worked in each day",
or
- "if the number of hours in the employee's regular work day is more than eight hours, the number in excess".
B. The employee is exempt from both the maximum 'hours of work limits' [ESA s.17-19] and overtime pay requirements [see Ch.4: "Overtime and Hours of Work"].
C. The employee is a "homemaker" whose minimum wage entitlement is limited to 12 hours per day - even if they work longer than that.
For these purposes a "homemaker" (do not confuse with "homeworker") is someone hired through an agency "to perform homemaking services for a householder or member of a household in the householder's private residence". This exemption does not apply to someone hired by the householder directly to perform the same work [Reg 285/01, s.11].
D. The employee is a "residential care worker" [Reg 285/01, s.23] [see Ch.1: "Basics"].
A "residential care worker" is someone "employed to supervise and care for children or developmentally handicapped persons in a family-type residential dwelling or cottage and who resides in the dwelling or cottage during work periods, but does not include a foster parent" [Reg 285/01, s.1 Definitions].
- the information contained in the pay statement as set out in s.6(b) above (retention for three after the information was given to the employee);
- the information contained in termination pay statements as set out in s.6(b) above (retention for three after the information was given to the employee);
- the information contained in any separately-issued (ie. where the required vacation pay itemization is not already included in a regular pay statement) vacation pay statement as set out in 4(h) above (retention for three years after the information was given to the employee).
- "all notices, certificates, correspondence and other documents given to or produced by the employer that relate to an employee taking pregnancy leave, parental leave, family medical leave, organ donor leave, family caregiver leave, critically ill child care leave, crime-related child death or disappearance leave, personal emergency leave, emergency leave during a declared emergency or reservist leave" (retention for three years after the leave ends) [see Ch.5: ""Benefit Plans, Leaves and Other ESA Rights"]
These records must be available to ESA officers [ESA s.16]. Note that making, keeping or producing false ESA-required employment records, or participation or acquiescing in such activities, is illegal [ESA s.131(1)] - as is providing "false or misleading information under this Act." [ESA s.131(2)]
(b) Additional Register for Homeworkers
A "homeworker" is an employee (as distinct from an "independent contractor" or a "homemaker": see Ch.1: "Basics") "who performs work for compensation in premises occupied by the individual primarily as residential quarters" [ESA s.1] (ie. they work out of their home). It is common for 'sweat-shop' type activities, employing a large number of recent immigrants, to be shifted to the home environment.
In addition to the individual employment records set out immediately above [(a) "Records Regarding Individual Employees and Hours Worked"], employers are required to "maintain a register" of the following information regarding any employed homeworkers [ESA s.15(2)]:- name and address;
- their wage rate, if any;
- "any prescribed information" [none added by Regulations to date].
Homemaker register information must be retained by the employer for three years after employment termination [ESA s.15(6)].
(c) Record-Keeping of Employer-Employee Agreements
The ESA allows for employer and employees to make agreements excepting minimum standards regarding "hours of work limits" and overtime averaging [see Ch.4, s.4: "Overtime and Hours of Work: Exemptions from Overtime and Hours of Work Provisions"].
Employers (or their agents) must retain copies of these agreements for three years after the date that they are no longer effective [ESA s.15(8,9)].
9. Gender Discrimination in Wages Prohibited
(a) Overview
Wage discrimination on the basis of gender is prohibited under a legal doctrine known generally as "pay equity". Separate provisions for enforcement of pay equity laws are located in both the Employment Standards Act (ESA) and the Pay Equity Act (PEA).
The PEA, through the early 1990's, required larger-scale employers (over ten employees) to prepare and submit "pay equity plans" to redress any wage and benefit gender discrimination. On objection by employees or unions, these plans could be reviewed and modified by staff of the Pay Equity Commission, and eventually by the Pay Equity Hearings Tribunal, if required.
The ESA - on the other hand - has its own pay equity provisions suitable for use by employees in smaller-scale workplaces. It relies on the enforcement mechanisms of the ESA [Ch.7: "ESA Administrative Enforcement"] (and later the OLRB: Ch.8: "OLRB Procedures Re ESA Matters").
(b) ESA Pay Equity Provisions
The basic ESA pay equity provision requires that [ESA s.42(1)]: s.42(1)
No employer shall pay an employee of one sex at a rate of pay less than the rate paid to an employee of the other sex when,
(a) they perform substantially the same kind of work in the same establishment;
(b) their performance requires substantially the same skill, effort and responsibility; and
(c) their work is performed under similar working conditions. Further, trade unions and other organizations are prohibited from causing or attempting to cause employers to engage in wage discrimination [ESA s.42(4)].
This doctrine however is excepted - even if gender wage discrimination exists - if a wage difference is based not on gender, but on any factor other than sex, including [ESA s.42(2)]:- a seniority system;
- a merit system; and
- a system that measures earnings by quantity or quality of production.
The main issue anytime these exceptions are asserted by an employer will likely be the bona fides (good faith) of the employer in the non-gender basis of any wage differentiation scheme. Further, wage equality may not be achieved by reducing the wages of the favoured gender (almost always men), but only by raising the wage of women [ESA s.42(3)].
Contraventions of this principle may result in an employment standards officer ordered the inequity to be balanced by way of an order for unpaid wages [ESA s.42(5)].
(c) Pay Equity Act
The province, in 1988, established a "pay equity" commission and associated hearing tribunal system to address systemic gender wage discrimination by larger employers (ten or more employees) in both the public and the private sector, and both in unionized and non-unionized workplaces.
The regime works on gender comparisons between equivalent job classes within the workplace, and orders may be issued increasing wages for women (but not reducing those paid men) in order to achieve equity.
When the legislation first came into effect in 1988 employers (the larger ones first) were required to file 'pay equity plans' either justifying their pay schedules with respect to their employees by gender or setting out phased-in wage increases for women which would achieve pay equity. Employees and unions had the right to input into the plans and to object before the Pay Equity Commission, which could require amendments to the plans. Once approved these plans were legally binding on the employer, subject to further review before the Pay Equity Hearings Tribunal.
The PEA, as opposed to the ESA, is all about pay equity "plans", and focusses its enforcement activities on them. Since plans respecting most larger employers have now been settled, the PEA only has ongoing application to new employers and complaints regarding discriminatory practices within existing plans.
It is beyond the scope of this Employment Law (Ontario) Legal Guide to fully explain the procedures of the Pay Equity regime, however readers may find the following links useful:
Pay Equity Commission
Pay Equity Hearings Tribunal
Pay Equity Hearings Tribunal: Rules of Practice
Pay Equity Act
(the PEA regulations are not linked here) |
