International companies doing business in Ontario, Canada, have had a lot to keep an eye on recently. The provincial government has been rolling out initiatives to keep Canada’s most populous province “open for business.”
So far, this has included measures such as putting a freeze on minimum wage increases and revising some policies about paid and unpaid leaves for employees. In April 2019, the government passed Bill 66 into law.
With the passage of the bill, many business owners and managers have asked how their workers will be affected. This quick survey will tell you what you need to know.
International Companies Should Review Revisions to Legislation
Bill 66, known as the Restoring Ontario’s Competitiveness Act, makes revisions to existing Ontario employment legislation.
The Act made immediate changes to the Employment Standards Act, 2000 and the Pension Benefits Act. International companies who employ Ontario workers will need to review the new legislation to make sure their policies are in compliance with the revisions.
Bill 66 also made changes to the Labour Relations Act, 1995. These adjustments will come into effect at a later date.
Effects on the ESA
One of the key areas of change is the overtime requirements in the Employment Standards Act, 2000. The Act originally stated employees could work a maximum of 48 hours per week. If employees were to work more than 48 hours, the employer needed to receive approval from the Director of Employment Standards.
The maximum number of hours of work is still the same, but Bill 66 removes some of the red tape for employers and employees in workplaces where overtime is common. Employers and employees can still enter into an agreement for employees’ hours to exceed the ESA maximum.
The agreement no longer needs approval from the Director of Employment Standards, which makes it easier for employers and employees to implement overtime agreements. In unionized workplaces, bargaining units can enter into these agreements.
Employers can also average the hours an employee works over a specified period in order to limit overtime pay. Bill 66 removes the necessary approval from the Director of Employment Standards for overtime averaging. It does introduce new requirements, such as defining a start and end date for the averaging period. The averaging period also can’t exceed four weeks.
Changes to the LRA and PBA
Bill 66 also made changes to the Labour Relations Act, 1995. The biggest difference here is the new definition of “non-construction employers.” This category now includes hospitals, universities, and many different administrators, among others.
What this does is redefine who is impacted by the LRA and how. The Act treats non-construction employers and construction employers differently. Those who are no longer considered to be part of the construction industry won’t be subject to the industry-specific criteria of the Act.
Bill 66 also made adjustments to the Pensions Benefits Act. The process employers use to convert single-employer pension plans to jointly sponsored plans has changed.
How This Affects International Companies
What does this mean for international companies with Canadian employees living and working in Ontario?
The change that will have the largest effect is the revision to the ESA. With the new overtime requirements, you may have an easier time approving employees’ overtime. You’ll also have more control over how much overtime you pay out.
For international companies that face high rates of overtime, this is welcome news. The overtime averaging allowances make it easier for you to meet staffing needs on a more flexible basis. The removal of the approval from the Director makes implementing agreements faster and easier.
Changes to the LRA will only affect certain employers. If you don’t have a pension plan, the change to the PBA likely won’t affect you.
If you’re concerned about your compliance in light of the changes, get in touch with a PEO. We can help you understand how the changes will affect your business.