Recent inspection blitzes conducted by the Ministry of Labour have identified the most common—and most costly—compliance violations made by Ontario businesses. Here, we break down four key lessons that can help protect your business and your people.
People dropping into your office unannounced isn’t usually a big deal—unless they’re from the Ministry of Labour, that is. Ontario employers have recently been the target of ‘inspection blitzes.’ These raid-style workplace inspections are designed to enforce compliance with core ESA standards and catch rule-breaking bosses.
Earlier this year, the Ministry released blitz results focused on employers with a history of non-compliance. Officers stepped-in to see how these businesses were handling everything from ESA poster requirements to record-keeping, wage statements, and vacation pay.
Nearly all compliance issues come down to a few basic policies and procedures. Nevertheless, a shocking 74% of employers were in violation of employment standards.
74% of inspected employers were found to be non-compliant.
Even more shocking are the costs and consequences involved. Penalties range from mere Compliance Orders (i.e. warnings), to fines in the hundreds and thousands of dollars. According to the blitz results, which took a ‘zero tolerance’ approach, a total of $125,267 was recovered for employees of the 104 businesses—not including fines paid directly to the Ministry, legal fees, and other expenses.
The good news is that workplace inspections can be pain (and cost) free—for the well-prepared, that is. Here are the most important lessons to be learned from Ontario’s rule-breaking bosses:
Lesson #1: Ignorance is no excuse.
In a Toronto Star report about the latest workplace inspection blitz, 14 convicted employers claimed that their infractions were accidental and “a result of confusion about their responsibilities under the Act.”
For this reason, the Ministry schedules ‘proactive’ workplace inspections with the primary goal of educating employers about their rights and responsibilities. Still, a violation is a violation whether it was intentional or not.
With that in mind, here are the employment standards the Ministry is most likely to focus on:
• wage statements
• hours of work
• eating periods
• overtime pay
• vacation with pay
• minimum wage
• public holidays
• unauthorized deductions
• poster requirements
What can you do? Schedule a quarterly workplace audit with your HR administrator to go through the above list and catch your compliance weak spots early. When it comes to employment standards, ignorance is not bliss.
Schedule an HR audit to catch your compliance weak spots early. When it comes to employment standards, ignorance is not bliss.
Lesson #2 – Certain industries are targeted, but any business can be fined.
Workplace inspection blitzes focus heavily on sectors where vulnerable workers are likely to be employed. These include professional services, building services, amusement and recreation industries, personal care services, retail trade, and others.
That being said, employers in every industry and across the province are held to the same standards, and can be caught (and fined) with or without an active blitz. Other than inspection blitzes, employment standards violations are often discovered via employee complaints to the ESA.
What can you do? Stay up to date on which industries are being targeted. Even if yours is not, maintain open lines of communications between yourself, your employees, and your HR department. If an employee raises any concern, address it right away.
Lesson #3 – Poor vacation management will cost you money.
Public holidays and vacation with pay are two of the most costly and recurring violations made by Ontario businesses. Unsurprisingly, both are directly related to inefficient vacation management policies.
When it comes to handling holidays, the Ontario ESA lays out nine public holidays that are separate from employee vacation days. In general, employees are entitled to receive these days off with pay.
While those terms seem straightforward enough, calculating public holiday pay depends on several factors such as employee leave, premium pay, and the ‘first and last’ rule. Not so straightforward anymore.
In terms of vacation with pay, Ontario employees are entitled to at least two weeks of vacation or four percent of their wages per year. Again, at surface level this is an easy compliance rule to follow. But throw in stub periods, leaves of absence, foregoing vacation, and what to do when employment ends, and it’s no wonder employers are racking up fines.
While time off is one of the most important employee benefits, calculating time off pay is quite complex for employers. Avoiding non-compliance and the associated penalties begins with effective time-off management.
Avoiding non-compliance and the associated penalties begins with effective time-off management.
What you can do: Properly document each employee’s day off requests, sick days, and personal leaves —whether through a spreadsheet or employee time off tracking tool. Keeping these records in a secure, easy-to-access place will also save time, headaches, and potential fees should you find yourself in the midst of a workplace inspection.
The last word: Put your employees first.
March 2017 marks the end of the Ontario Ministry of Labour’s workplace inspection blitz schedule. Future blitzes will be announced soon. Blitz or not, employers should be aware of the lessons above at all times, and take the necessary HR precautions to maintain compliance.
One final lesson: the Ministry of Labour’s blitzes aren’t about punishing employers—they’re about protecting employees.
For all the warnings and fees rule-breaking bosses may face, it’s employees who pay the highest price.
For all the warnings and fees rule-breaking bosses may face, it is employees who pay the highest price for non-compliance. Unpaid wages, job insecurity, and ambiguous policies can and will effect your people. This matters whether your industry is ‘at risk’ of a blitz or not.
On the flip side, showing your team that you’ve done your due diligence as a responsible employer will give them the confidence they need to be their best at work.
Legislative compliance is a serious concern and should be a top priority in your organization. Collage’s all-in-one HR software was built for Canadian compliance to help employers save time and money. Learn about our HR solutions at www.collage.co.