Published on May 4, 2024Last updated 7 hours ago3 minutes of reading
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The Ontario government announced last week that it would introduce legislation to increase the maximum fines imposed on rogue employers in Ontario who violate the Employment Standards Act to $100,000.
Ministry of Labor investigators will also have the ability to impose fines of $5,000 on repeat offenders, an amount that can be multiplied by the number of employees affected by the violation. So, if a repeat, bad employer wrongly withholds the wages of 10 employees, an investigator could theoretically impose a fine of $50,000.
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While there is a general feeling that legislative changes are more about political posturing than impact, the fact is that Department of Labor investigations are no walk in the park. This is an experience to avoid.
Department of Labor investigations are generally prompted by employee complaints to the department. Once initiated, investigators have broad powers to enter an employer's premises, interview employees, examine records, audit processes and issue sweeping orders within short compliance times. It was, by all accounts, a horrible experience.
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Investigators also ensure that employees are not retaliated against for filing such complaints. Employers literally have nowhere to hide.
In recent years, courts have also come down hard on employers who fail to follow the Employment Standards Act when terminating employees. All of this suggests that every employer should have some working knowledge of the Employment Standards Act and implement rudimentary best practices to avoid workplace complaints, fines and major business disruptions.
There are a few typical mistakes employers make that can easily be avoided.
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Review your payroll practices: Do your employees receive commissions, tips or vacation pay? If so, create a routine system for paying these fees. Employers who unreasonably delay paying these amounts are most often the subject of complaints from the Department of Labor.
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Strengthen your termination process: The Employment Standards Act requires an employer to provide any employee with very specific rights in the event of termination. This includes the right (in some cases) to lump sum severance payments, continuation of all benefits (not just health and dental) for a minimum period and much more. Even sophisticated employers tend to fail to comply with one or more requirements of the law, leaving them vulnerable to a department complaint or increased liability.
Review your job offer letters: Sometimes labor complaints are filed due to promises made in employment contracts that are never paid or delivered to an employee. For example, if an employer promises (or confirms eligibility for) a bonus, pension or other benefit in a contract, this could serve as evidence to support a claim for unpaid wages later. Employers should carefully review employment contracts, remove references to outdated benefits, and update the language of existing benefits, commissions, and bonuses. Employees must clearly understand when they are or are not entitled to a benefit or bonus.
Complaints from the Ministry of Labor always constitute a major disruption to business. Do what you can now to prevent someone from coming your way.
Have a workplace question? Maybe I can help! Email me at [email protected] and your question may appear in a future column.
The content of this article is general information only and does not constitute legal advice.
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