Employment Standards Act

The Employment Standards Act (ESA) is the law that governs most workplaces in Ontario; most workers in Ontario are covered by this Act. Workers employed in federally regulated industries such as banking, telecommunications and airlines are covered by the Canada Labour Code. Both the ESA and the Canada Labour Code enforces minimum employment laws regarding hourly wages, hours of work, public holidays, termination pay/severance and leaves of absence, among others.
Employment standards apply differently to different workers. All employment standards do not apply to independent contractors (or clergy’s), some employment standards do not apply to interns (i.e. minimum wages), and most employment standards do not apply to professionals and managers (i.e. overtime). In this regard, employment standards, as minimums, are there primarily to protect the vulnerable in low wage industries.
To properly manage a workplace, employers must ensure that they are aware and understand the provisions under the ESA, or at least consult with an employment lawyer. There are a few important provisions in the ESA that all employers must have an understanding of or they will run the risk of breaching the ESA, which will in turn cost them millions in damages should an employee bring an action against the employer. Additionally they may report the breach of the ESA to an Employment Standards Officer who will conduct an investigation and make binding orders against an employer:
  • Vacation with Pay: Vacation time and vacation pay are two separate things. Employers can schedule an employee’s vacation whenever they want but must apply them in one-week blocks with some exceptions.
  • Buying a Business: Employers who purchase a company, including only some assets of the company, and continue to employ the previous employees must count the employees’ previous tenure with some exceptions.
  • Deduction from Wages: Employers cannot deduct wages because of mistakes made by their employee. To deduct wages at all, employers must receive an employee’s written authorization.
  • Overtime Pay: Employers must pay overtime at a rate of 1.5 times an employee’s pay if they work over 44 hours in a week. Even salary employees. Exceptions apply.
  • Records: Employers must keep detailed records including hours worked, vacation, authorizations, etc.
  • Sick Leave: Employees must be given three days each year for sick leave. They can be unpaid, and employers can require reasonable evidence to support the leave. The ESA also allows pregnancy leave, parental leave, family responsibility leave, bereavement leave, and others.
  • Termination: When dismissing an employee without cause, employers must give a minimum amount of notice of termination, or termination pay, and severance pay if applicable. Employers could be liable to pay much more severance under the common law without proper employment contracts or unenforceable termination clause in the contract agreement.
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