Written by: Gwyneth James MBA CPA, CGA, Senior Partner
As a society we have developed laws and rules which are generally designed to address fairness and safety. All of the rules involving paying your employees in Ontario can be found in the Employment Standards Act (ESA) which is managed and enforced by the Ministry of Labour. As an employer you are expected to be familiar with these laws and provide a copy of the ESA poster to every employee.
Examples of what is covered by the ESA are: minimum wage, overtime, tips and gratuities, hours of work, public holiday pay, vacation pay, leaves, and termination.
Minimum wage is currently $11.25 per hour and will increase to $11.40 on October 1, 2016. There are different minimum wages for students and liquor servers, but they are still covered by the majority of the ESA rules.
With a few exceptions, all employees are entitled to overtime pay after working 44 hours in a week. Overtime pay is 1.5X the employee’s regular hourly rate. An employee and an employer can agree in writing that the employee will receive paid time off work instead of overtime pay, but the time is still “banked” at 1.5X.
Rules regarding tips and gratuities were changed effective June 10, 2016. Tips are allowed to be shared in a tip pool. Employers cannot deduct for breakage or slippage, but they are allowed a share if they are owners and work in the business themselves.
For most employees, the weekly limit on the number of hours they can be required to work is 48 hours. These limits may be exceeded if certain conditions are met.
Not all industries are covered by all aspects of the ESA. The Ministry of Labour website has a “Special Rule Tool” which allows you to check if your business is subject to any exemptions: https://www.labour.gov.on.ca/english/es/tools/srt/index.php