Ontario labour laws have changed more for small business owners than just the minimum wage in 2018. Here are a few, often overlooked items from Bill 148, the Fair Workplaces, Better Jobs Act.

1. Dropping the provincial corporate tax rate

The rate for small business from 4.5% to 3.5% was certainly beneficial to small business owners. The decrease was meant to balance the minimum wage increase and the impact it would have on business bottom lines.

2. Changes to paid vacation

All employees who have been with the same employer 5 years or more and now entitled to 3 weeks vacation instead of 2. Employees with less than 5 years will continue to get their 2 weeks leave.

3. The 3 hours of pay minimum rule

Any employee that normally works 3 or more hours per day who shows up for work and receives fewer than 3 hours must still receive pay for 3 hours of work. This is the also true if a shift is cancelled with 48 hours’ notice, and the employer fails to notify the employee. Also, all on-call employees must be paid 3 hours for every 24-hour period they are on-call, even if they are not required to work. Of course, there are exceptions if circumstances are out of the employers’ control such as, but not limited to: power outages, extreme weather, and fire.

4. Stricter classification of independent contractors

If employers incorrectly classify employees as independent contractors they will be subject to fines and possible prosecution for any violations. Should such a dispute exist, the employer must prove the contractor is not an employee.

5. Equal pay for equal work

Ontario labour laws now prohibit all contract, seasonal, temporary and part-time workers from being paid the same rate as full-time employees if they are doing “substantially similar” work. These workers can request a pay review if they think they are being underpaid. If there is a discrepancy the employer has to adjust the employee’s pay or issue a written letter explaining the discrepancy. This legislation also ensures the employer cannot cut the full-time employee’s pay to maintain consistency.

Want to learn about more Ontario labour laws that affect small businesses? Read part two in our series.

E&E Professional Accountants has years of experience in assisting businesses with their accounting needs. We are founded and managed by an experienced corporate auditor and a former CRA tax auditor. Feel free to contact us for assistance with all your accounting and bookkeeping needs.

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