Changes in Canadian Labor Laws: Impact on Employers and Employees
The Canadian employment arena is undergoing significant transformations that both employers and employees need to comprehend and adapt to effectively. Recent legislative amendments and impending changes underscore the need for a proactive approach to understanding and aligning with the shifting legal frameworks.
Ontario’s Proposed Legislation: Key Implications for Employers
New employer obligations
As of July 9, 2023, federally regulated employers must reimburse employees for reasonable work-related expenses. When determining whether an expense is related to work, employers must consider factors such as the impact on work performance, whether the expense was authorized in advance, and whether the expense was incurred for a legitimate business purpose or was a condition of employment. Employers must repay the employee within 30 days of a claim’s submission.
Reimbursement of Reasonable Work-Related Expenses: Summary of Updates:
The IPG states that to be eligible for reimbursement by the employer, an expense must meet the following four (4) criteria:
The employee does not have to pay the expense as per a written agreement or collective agreement (for example, a cost for which the employee is responsible, such as the cost of a lost uniform); The employee must have paid the expense out-of-pocket (payment with an employer allowance, cash advance, or employer credit or purchasing card, for example, would not be considered “out-of-pocket”); The expense must be work-related, and the expense must be reasonable.
As further detailed below, the Code now requires employers to provide their employees with a written employment statement with information concerning their employment. This statement should include, among other things, information about how the employee can claim reimbursement for reasonable work-related expenses.
Timing of Repayment
For unionized and non-unionized employees, eligible expenses must be reimbursed as specified in a collective agreement or written agreement (if and as applicable), or, if there is no such collective agreement or written agreement, within 30 days after the employee submits their expense claim to the employer.
Employment Standards for Federally Regulated Employers
Starting October 9, 2023, employers are mandated to furnish employees with a written employment statement within their initial 30 days of starting a job. This statement should encompass crucial details like job title, duties, work address, employment duration, probationary period length (if applicable), necessary qualifications, work hours, overtime guidelines, and wage rates. Importantly, this obligation persists throughout employment.
Section 253.2 of the Code now necessitates employers to provide a written statement within the initial 30 days of employment, detailing specific information about the individual employee:
- Parties involved in the employment relationship.
- Job title with a concise duty description.
- Ordinary work address of the employee.
- Commencement date of employment.
- Employment term.
- Any probationary period duration.
- Necessary qualifications for the role.
- Required training details.
- Employee work hours, overtime rules, and wage rates.
- Pay frequency and deduction information.
- Guidance on claiming reimbursement for reasonable work-related expenses.
While a template for this statement exists, employers have the flexibility to convey this information through various documents, like written employment agreements, offer letters, policy manuals, or collective agreements, rather than the template provided.
This statement must be updated within 30 days of any changes. Employers are required to retain a copy for 36 months after the employee’s termination and should furnish a copy upon employee request.
Expanded Hours of Work Exemptions and Vacation Pay Modifications
Effective February 1, 2024, amendments will come into effect, altering the minimum notice of termination period for employees with at least three years of continuous service. These changes introduce graduated notice periods based on employment duration, starting at three weeks for those with three years of service and escalating to a maximum of eight weeks for individuals with eight or more years of tenure.
Additionally, employers will now be mandated to furnish terminated employees with a written statement of benefits, encompassing details such as vacation benefits, wages, severance pay, and any other job-related benefits like car or phone allowances.
The current termination provisions stipulating a two-week notice will be replaced with a graduated system akin to provincial employment standards legislation. The new Section 230(1.1) of the
Code will outline the notice entitlements, pay in lieu of notice, or a combination thereof, based on the employee’s tenure.
Statement of Benefits: Starting February 1st, 2024, employers must provide terminated employees with a statement of benefits akin to group termination requirements.
Regarding other amendments:
The Act will clarify that employers cannot pay vacation pay at times other than the default unless an agreement is made with the employee. The default payment times are before the vacation starts or on the pay day just before the vacation, based on specific conditions.
Trial Shifts, Deductions, and Tips:
The Act will extend the definition of “employee” in the ESA to include individuals undergoing trial periods, prohibiting unpaid trial shifts. It will also prevent employers from withholding wages due to customers not paying for goods or services. Additionally, there will be transparency requirements for tip-sharing policies, requiring employers to post and retain a copy of these policies for employee awareness.
These changes will come into force either three months after the Act receives royal assent or immediately upon receiving royal assent, depending on the specific amendment.
Implications and Actionable Steps for Employers
The evolving labor landscape demands a proactive approach from employers to align with these legislative changes effectively. Key action items include:
• Review and Update Policies: Employers must review and update their policies, employment agreements, and documentation to comply with the amended regulations.
• Compliance Check: Ensuring compliance with reimbursement policies, employment statements, termination notice periods, vacation pay disbursement, and other statutory obligations is critical.
• Employee Communication: Employers should communicate these changes transparently to employees, emphasizing their rights and entitlements under the new regulations.
• Legal Counsel Engagement: Seeking legal counsel’s guidance in reviewing and updating employment agreements can ensure alignment with revised individual termination notice provisions and other legal requirements.
• Workplace Implementation: Implementing necessary measures to provide menstrual products, facilitate transparent tip policies, and adapt to the expanded hours of work exemptions in specific sectors is essential.
The evolving labor landscape in Canada underscores the need for proactive adaptation to legislative changes. Employers navigating these amendments must prioritize compliance, transparency, and fair practices to ensure a harmonious working environment while safeguarding employee rights and welfare. By staying abreast of these changes and taking strategic steps to align with the amended regulations, employers can navigate the evolving legal framework successfully.