Author: Dave Patriarche
Ontario Raising Minimum Wage to Support Workers
The Ontario government is increasing the minimum wage from $16.55 per hour to $17.20, effective October 1, 2024. This 3.9 per cent annualized wage increase is based on the Ontario Consumer Price Index (CPI) and brings Ontario’s minimum wage to the second highest in Canada.
https://news.ontario.ca/en/release/1004366/ontario-raising-minimum-wage-to-support-workers
Are You Sure Your Independent Contractor Is “Independent”?
As we often point out, Mainstay does not allow “independent Contractors” (IC’s) to be covered by employee benefit plans. There are a number of reasons for this, from taxation issues, to contradictory contract wordings, the risk of being designated a Personal Service Business to the issues around providing benefits which may cause IC’s to become employees,(amongst others).
The article below shows some of the tests and nuance that is required to protect yourself. we can help by not putting them on the benefit plan, but beyond that, you need to use caution and get advice around these evolving relationships.
A truly independent contractor arrangement provides parties with the freedom to contract without many of the constraints applicable to employment relationships. However, not all contractor relationships are the same.
Verbal Offer, Offer Letters and Employment Agreements
A post on making employment offers (by E2R) and some of the potential issues for employers.
You have posted for an open position, screened through the resumes, interviewed your top candidates and you are now ready to put out an offer. You chat with the candidate on the phone and they are eager to get more information. You draft an email and/or a quick “offer” letter/confirmation, send it to the candidate and they happily accept. You then draft and send the full employment agreement. The employee signs this agreement and then starts working. You have done everything right… or have you?
To start let us review the distinction between the Verbal Offer, the Offer Letter, the Employment Agreement and what case law has to say.
Verbal Offer: a verbal conversation with a candidate, officially offering them the position and letting them know you will be sending them further information to review.
Offer Letter: a brief email or document that is provided to a candidate officially extending the offer of a job. It summarizes the basic points of your offer, such as job title, start date, pay, vacation and other key information.
Employment Agreement: a legally binding agreement between you and a candidate. It provides a detailed outline of all the terms and conditions of employment, more extensive than the Verbal Offer or Offer Letter.
Case Law
In a 2015 case which made its way to the Ontario Court of Appeal (Holland v. Hostopia Inc., 2015 ONCA 762 (CanLII) Mr. Holland accepted a position with Hostopia. Prior to starting, he signed an offer letter that indicated the offer was conditional on him signing another employment agreement (at a later date) that would include additional terms. Mr. Holland later signed the employment agreement, and no new or additional consideration was provided at that time. Seven years later Mr. Holland was terminated and Hostopia relied on the termination language in the employment agreement. Mr. Holland sued, claiming that without consideration the employment agreement was not enforceable.
The trial judge’s decision was that the offer letter and the employment agreement were interrelated agreements and as such sided with Hostopia. Mr. Holland appealed and the Ontario Court of Appeal overturned the decision, reaffirming previous decisions indicating that when an offer letter is signed, it is a binding document. The fact that the offer letter and the employment agreement differed in at least one way (additional termination language) confirmed that they were not interrelated documents. As such, consideration would have been needed for the subsequent employment agreement to be signed and considered enforceable. Accordingly, Mr. Holland was awarded reasonable notice of termination calculated in accordance with the common law principles.
As this case outlines, the presence of an accepted “offer letter”, or even a verbal employment contract (so watch what you say), hinders the enforceability of a subsequent signed employment agreement. The employment agreement provides employers with additional protections (ex. limits termination payments, outlines confidentiality and non-disparagement provisions etc.) that are not typically included in an offer letter. Given this you may want to reconsider the use of offer letters in your hiring process.
It is preferable to simply indicate that you will be making them a written offer of employment that will contain all of the terms and conditions of employment, this should be the actual employment agreement.
If you have any questions about your hiring process, which may include job offers and/or employment agreements, please reach out to ClientCare to schedule a call with an Advisor.
These Are The 10 Biggest Mistakes Employers Make (at termination)
Howard Levitt always has something interesting to say. He has appeared in more employment law cases in the Supreme Court of Canada and at more provincial Courts of Appeal than any lawyer in Canadian history.
The article below has some great general advice for employers dealing with terminations…
From offering too much to offering too little, these are the traps employers fall into time and time again
What are the biggest mistakes employers make? I could write five columns on this, and come up with a different Top 10 in each. But let’s pick a few:
1) Being too generous with your initial severance offer
2) Being too litigation averse
3) Offering too little
4) Relying on severance formulas
5) Wasting legal resources
6) Condoning misconduct
7) Hiring outside investigators
8) Playing favourites
9) Inadequate research
10) Not reviewing your employment contracts
Working Remotely, or Remotely Working?
I just saw this HR update on remote work and thought it may be useful for those of you that have employees working in other provinces. Please note: in most cases, employees working out of the country can NOT be covered by benefit plans.
If you have employees asking to work remotely, please call us as there may be more complications to be considered.
In last year’s Alert, we outlined some of the risks and concerns underlying remote and hybrid work policies.
As fully remote roles continue to be prevalent, and in light of Canada Revenue Agency (CRA) and Revenue Quebec (RQ) policies announced earlier this year, let’s outline 3 key questions employers need to consider when hiring an out-of-province worker.
What employment standards legislation applies?
The applicable provincial jurisdiction for a remote worker will be the province in which a remote worker permanently lives and works. Accordingly, an employer is required to comply with the employment standards legislation of that province, even if the business has no corporate presence in the jurisdiction.
Do I need to register for workers’ compensation insurance to cover an out-of-province remote worker?
Maybe. Each jurisdiction in Canada has its own workers compensation (“WC”) legislation and insurance program. These typically cover individuals working within that jurisdiction, with some temporary, limited coverage for out-of-province work.
As such, you may be required to register for WC insurance in the remote worker’s home jurisdiction. Whether you are required to register will depend on the legislation in the remote worker’s home jurisdiction. Some jurisdictions may focus on what your company’s business is in general (even if that takes place elsewhere), while others may focus solely on your business’s operations within the remote worker’s home jurisdiction.
Note that, in addition to WC insurance requirements, once you employ a worker in a jurisdiction, you will likely be subject to that jurisdiction’s occupational health and safety prevention requirements.
What about payroll and provincial income tax deductions?
The latest province of employment (“POE”) policies provide that if the employer and employee have entered into a “full-time remote work agreement” and the employee can reasonably be considered attached to an employer’s establishment, the CRA and RQ will now consider that the employee reports for work at the employer’s establishment to which he/she is “attached.”
As a result, the CRA and RQ may determine that an employee reports for work at an employer’s establishment and apply payroll deductions rates of the province where the establishment is located, despite the employee being fully remote and being paid from an establishment located in another province.
Employers should review their payroll policies to determine whether the POE policies impact the provincial payroll tax rates and the taxes they are required to deduct from employees’ salary or wages. Note that no legislative changes to the laws governing payroll deductions and determining the POE have been introduced so far, either at the federal or Quebec level.
Takeaways
Hiring remote workers in other jurisdictions can be opportunity to expand a business’ reach and/or hire the most qualified people from across Canada. However, before hiring workers in a province or territory in which your business does not currently operate, be sure to carefully consider the jurisdiction issues that will follow. If you’d like to discuss this further, please do not hesitate to reach out to speak with an e2r™ Advisor.
Ontario Employers, Pay Equity Or Pay The Price (if you are 10 or more staff, PLEASE READ)
Though this is not specifically benefits related, we see many Ontario employers failing to implement or properly maintain a Pay Equity plan. This can create a very high cost problem when the auditors come knocking, and it doesn’t just hit high profile companies, but huge settlements can be forced on companies as small at 10 employees.
The article below helps employers to understand who Pay Equity applies to…
In Ontario, since January 1, 1988, all public sector employers and all private sector employers with 10 or more employees have obligations under the Pay Equity Act (the “Act”) to ensure jobs of equal value receive equal pay.
It also explains where things can go wrong…
The financial consequences for non-compliance may be devastating. There is no limitation period on pay equity, meaning that an employer can be ordered to pay retroactive adjustments to the date the adjustment should have first been paid. This date can be as early as 1988, depending on when the employer became subject to the Act and when the non-compliance occurred, plus interest. These retroactive adjustments are payable not only to current employees, but also to former employees.
