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It’s more than a minimum wage increase

By Lyndee Patterson

Ontario’s workplaces are changing. The demands of the modern consumer, the impact of new technology, the increasing individualization of career paths and the rise of the gig economy have collectively had a significant impact on how we all earn our living.

In an effort to update Ontario’s labour laws for changing times, the government of Ontario has introduced and passed the Fair Workplaces, Better Jobs Act, 2017 – better known as Bill 148.

Although Bill 148’s most famous provision is the increase in the minimum wage (from $11.60 to $14 as of January 1, 2018, and to $15 in 2019), the overall changes enacted – intended to balance employee rights and economic growth – are comprehensive. Touching on most aspects of Ontarians’ working lives, these changes will impact how employers pay and manage their people.

Employers, regardless whether they adhere to the minimum standards or offer more generous benefits and flexible work arrangements, will need to lean on their HR professionals and evaluate the impacts of the changes brought forth by Bill 148 in context of their operations. This includes reviewing human capital management infrastructure, compensation structure and workplace policies and procedures.

Below is a snapshot of some of the changes that may impact employers, followed by key human capital management considerations and best practices.

Bill 148 changes:

  • Parental Leave: Eligible new parents can take a leave of up to 61 weeks (if pregnancy leave is taken) or 63 weeks (if pregnancy leave is not taken)
  • Vacation Entitlement Increase: Minimum vacation entitlement for workers rose from two weeks to three weeks per year (after five years with the same employer)
  • Public Holiday Pay: Calculation changed for public holiday pay to refer to regular wages in the pay period before the holiday divided by the days worked (rather than a four-week period of regular wages divided by 20)
  • Overtime: The Mixed Hourly Rate (a weighted average established for employees with multiple rates) was eliminated in favour of paying overtime at the rate of the work performed after the weekly threshold is reached
  • Personal Emergency Leave: Rather than limiting this leave to organizations with more than 50 employees, all workers are now given 10 personal emergency leave days per year and a minimum of two days are paid. Further, employees do not have to provide employers with a sick leave note when requesting personal emergency leave.
  • Scheduling (January 1, 2019):
  • Three-Hour Rule: Removal of minimum wage component – rather than topping up shifts less than three hours to three times the minimum wage, eligible employees will be entitled to three times their regular rate
  • Three-Hour Rule: Broader application – the rule would extend to unworked on-call situations and when shifts are cancelled within 48 hours of the scheduled start time
  • A right to refuse to work if scheduled with insufficient advanced notice (96 hours)

While these changes raise the minimum working standards and are good news for employees, they definitely present a new compliance challenge for employers.

Here are some ways employers can respond:

Review human capital management (HCM) and workforce planning

  • Consider the implications of longer leaves on your top-up program
  • Determine how changes to leaves, overtime, vacation pay, etc. are to be managed as part of your current processes
  • Outline new processes that need to be created, how documentation will need to be updated and how to maintain appropriate records
  • Assess temporary staffing options, as well as training and retention strategies to ensure adequate staffing through any extended parental leave periods

Review compensation structure

  • Calculate and consider the financial impacts that the changes will have on your wage rates for classes of jobs in your organization
  • Determine how changes to equal pay, vacation pay and overtime pay will be incorporated into your compensation program

Find a strong HCM technology partner to help manage compliance

With such sweeping legislative changes, including highly specific scheduling and pay equity requirements, make a list of new requirements that will impact your business and that can be managed through technology. Next, evaluate how well your current system can meet those requirements, such as what components can be automated.

Consider cloud-based, single application HCM technology to help precisely track and record employee hours – critical to helping manage compliance with the latest legislation. HCM technology that operates from one rules engine and one database for time and attendance, payroll, benefits and HR helps employers meet the provisions of the new legislation appropriately based on hours worked in real-time.

Communicate policy changes to your workforce

Consult with your legal advisors to confirm your notices, policy revisions and implementation plans are appropriate and keep your workforce up-to-date and engaged.

While complying with a dizzying array of new regulations is challenging, it is definitely possible and it’s more important than ever. With effective communication, and dependable and trusted compliance and technology partners, you will have the resources you need to not only help manage compliance with Bill 148, but also positively impact the employee experience through flexible and progressive workplace policies and processes. 

Lyndee Patterson is senior compliance counsel at Ceridian.

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