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5 Impacts of the Amendments to the Employment and Labor Law in Canada

Jan 2, 2018

After much speculations, Kathleen Wynne’s government put forth a new set of reforms titled “Bill 148” or “Fair Workplaces, Better Jobs Act, 2017” related to labor law including overtime, sick pay, and how workers join unions and employers responsibilities to contract workers. The Changing Workplaces Review suggested significant changes and upgrades to the existing labor laws including the Labor Relations Act, 1995 (LRA), Employment Standards Act, 2000 (ESA), and the Occupational Health and Safety Act (OHSA). SE_Demo2Amended largely in favor of the employees and contract workers, the amendments to the labor law is expected to increase operating costs for businesses across Canada by some $23 billion over the next two years.

Rise in Labor Costs

One of the major amendment made along this labor law is the changes to minimum wage which is about to be set at $14 per hour effective from Jan 2018 increasing up to $15 per hour by Jan 2019. This 7% increase in minimum wage will force companies to rethink their operational strategies and will urge them to optimize process inefficiencies and invest in automation. Additionally, employers will also raise the bar for their expectation for people earning more than $15 per hour which may not always be possible.

Paid Vacation

Another change coming into effect from Jan 2018 would be the provision for employees to take three weeks of paid vacation after serving five years for the same company. Such a change in the labor law will make many employees qualified for such leaves. This is expected to increase the overall costs for small businesses who run their business with a small workforce and finding a replacement can be troublesome.

Work Scheduling

The new scheduling rules in the labor law, effective from Jan 2019 gives employees the right to request schedule, location, or shift changes. It also provides employees the power to refuse shifts without the fear of reprisal. Additionally, employers should compensate three work hours worth of pay if their shift is canceled 48 hours prior to its scheduled start time. Such regulations severely limit employers ability to reschedule works and manage shifts as per business demand effectively. Since canceling shifts incurs a financial penalty, businesses would have to resort to other measures to reduce staffing to adjust for slow business.

Part-Time and Contract Employees

The proposed change to the labor law also requires companies to compensate part-time, temporary, and seasonal workers the same amount as the full-time employees when performing the same job. However, the rule only applies to basic wages. This will require businesses to define jobs rigorously to be able to differentiate between similar part-time and full-time roles. For instance, companies who increase pay for employees based on years of service may instead look to improve pay on the basis of hours worked.

Leaves

Under the current scheme of changes, the new amendment requires employers to provide a minimum of 10 days of personal emergency leaves (PEL), with the first two days being paid leaves. The changes also take into account personal leave reason to include experiences or threat of domestic or sexual violence. Additionally, the family medical leave has also been increased from 8 weeks in 26 week period to 27 weeks in a 52 week period. The biggest of all changes come in the form which limits employers from requesting a sick note from employees for taking a PEL. All such changes require a thorough examination of the current reporting processes to ensure compliance.

For more information on ongoing changes to employment and labor laws:
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