Ontario’s restaurateurs and small businesses continue to adjust to the massive cost increases and labour reforms resulting from the Wynne government’s contentious Bill 148.
A recent Restaurants Canada survey shows that 95 per cent of our members indicated they would have to make serious choices for their operation by finding ways to control costs, and a further 26 per cent suggested that they will be forced to close their doors altogether.
Ontario restaurateurs operate with razor-thin margins, on average just 3.4 per cent, which is the lowest in Canada. Bill 148’s cost increases will push many restaurateurs to the brink. The 21-per-cent increase in the minimum wage (with another hike due next year) is just one component of the estimated $1.8 billion in new costs imposed by Bill 148. While wage-related adjustments are roughly 58 per cent of the total burden, another 42 per cent are due to over sixty regulatory changes being pushed through, including provisions around equal pay, increased benefits for part-time and casual staff, changes to workplace scheduling rules, and new leave provisions.
Report and analysis from economic institutions including the TD Bank, Fraser Institute, C.D. Howe Institute and the Canadian Centre for Economic Analysis, all predict that job losses throughout Ontario’s foodservice industry could be as high as 185,000 in the next 2 years.
But it’s not just the cost increases that are tying the hands of restaurateurs – Ontario small business owners need as much information as they can get to help them navigate through the 64 labour reforms included in Bill 148. For example, on April 1, more provisions in the bill relating to equal work for equal pay came into effect.
To help explain and navigate the impact of the Equal Pay provisions, we spoke with labour lawyer Laura Williams, Principal and Founder of Williams HR Law. Williams’ experience with labour issues and her solid understanding of the legal landscape makes her an ideal point of reference for those looking to better understand what is happening throughout Ontario’s foodservice industry.
How did we get here?
Williams’ says these changes began in 2014 with the Changing Workplaces Review. Its purpose was to review the employment conditions in Ontario and how those conditions were impacting segments of the workforce and employees throughout the province. The review concluded in May 2017, and its results and recommendations were factored into the new labour laws.
Williams stressed the importance for employers to keep the updated labour laws top-of-mind. The Ontario government is dedicating a lot of time, money, manpower and energy to ensure that these new standards are strictly adhered to and enforced throughout the province.
For example, the Ontario Ministry of Labour hired an additional 175 Employment Standards Officers in the New Year and it plans to launch a program to educate employees and small and medium-sized enterprises regarding the new rights and obligations in the updated ESA.
In 2020, the Ontario Ministry of Labour intends to resolve all ESA claims within 90 days and will inspect one in 10 workplaces in the province at random to ensure compliance.
What if an employer is found to be IN violation of the new labour rules and regulations?
Williams explained that if an Employment Standards Officer discovers that an employer has paid an employee less solely based on employment status, the officer will determine the amount owing to the employee, which shall be deemed to be the employee’s unpaid wages.
It appears as though each incident or alleged violation will be handled on a case-by-case basis, as each one will be unique to its own circumstances. But the decision of the fine or penalty will remain with the officer in charge of the investigation.
Closing the loop on gender-wage disparities
Williams said that thanks to Part 12 of the ESA, it has been the law for more than 40 years that both sexes be paid equally for equal work. However, the Equal-Pay for Equal-Work amendments that came into effect on April 1 includes much more than gender-wage disparities.
Williams emphasized that most employers would agree that the biggest change coming into effect is that employers are now required to pay part-time, casual or temporary employees, or temporary help agency workers at the same rate as full-time employees for what is deemed “substantially the same” work.
Williams highlighted this issue, as she suspects that it will cause some confusion between employees and employers as they adjust to the new rules: “With respect to the qualification of ‘substantially the same’ but not necessary identical work, it is based on the ‘core duties’ of the work,” she said.
We anticipate that if there are challenges to what constitutes this and what falls into the specific parameters, what will be scrutinized is the work that is actually being performed.
This is a massive change for Ontario’s labour industry. These changes have forced Ontario restaurateurs to seriously re-examine their summer employee hiring practices.
Are there exceptions to these new rules?
Yes. Different rates-of-pay will be permitted if based on:
- A seniority or merit system
- A system that measures earnings by quantity or quality of production
- Any other factor other than sex or employment status
What does this mean for employers?
The changes and updates to the ESA leave employers with less flexibility to decide on the composition of their workforces, as they have traditionally used temporary, seasonal, part-time and casual employees for specific purposes in specific circumstances. This will no longer be the case.
Up until now, employers have used a differential wage rate to recognize a permanent employee may have more experience than a non-permanent employee, and pay them more in accordance with that experience. This pay-practice has also come to an end, unless (as noted above) the employees and employer have agreed to a seniority or merit-based pay system.
Going forward, what are some strategies and best practices restaurateurs can adhere to?
“Evaluate your existing policies and practices for compliance, identify gaps and strategize how to resolve those gaps,” said Williams.
Employers should immediately review and consider new entitlements to ensure they are not unintentionally providing greater right or benefit to one group over another.
Williams also suggested a few more strategies that could be helpful, including:
- Review positions to determine whether roles are substantially similar in effort, skill, responsibility and working conditions, or whether they fall within an exemption
- Explore possible applicable exceptions to maintain wage differences based on employment status where it can be deemed justifiable
- Be transparent about pay and compensation programs that could give rise to pay differences based on employee status
Following Williams’ presentation, viewers had numerous questions relating to their daily business operations and what they can expect with these labour law changes, including incentive pay, different rates of pay in different regions of the province and Personal Emergency Leave (PEL).
Williams emphasized that it’s important for employers to be acutely aware of what they can and cannot ask for going forward:
As most of you know, you can ask for the reason or basis for the reason as to why employees are asking for a PEL, but you can’t require that employee to provide you with a medical note.
Thanks to Bill 148, Ontario’s restaurateurs and small business owners have a lot of their plates. It’s not just their profits and bottom lines that are being upended, but the fact that they can face serious fines and consequences if they do not understand the province’s updated labour laws. Simultaneously running a business, handling a fluctuating staff and studying up on compliance laws is a lot to take on.
Restaurants Canada understands that Ontario’s foodservice industry is the midst of a sea of change and uncertainty. This is precisely why we are providing our members with concise, relevant and accurate information like these webinars. We need to help each other as we move forward while ensuring that we adopt these new laws into our modus operandi.
All employees should be paid fairly for the hard work they do and owners and operators must understand how the system is changing.
A full comprehension of our laws and having an open and honest dialogue with each other is the best path forward for all.