Understanding the Ontario Employment Standards Act

Everything you need to know as a business owner about Onatrio's ESA

First published on Tuesday, Jul 09, 2024

Last updated on Tuesday, Jul 09, 2024

As an employer in Ontario, you must provide your employees with certain basic conditions of employment. These conditions are outlined in the Ontario Employment Standards Act (ESA), which every employer should be familiar with.

Learning everything you can about the Ontario ESA will not only keep you duly informed of your employees' entitlements and better equip you to provide them, but it will also help you educate your employees, as many workers are unaware of their rights and entitlements in the workplace.

In this article, we'll break down everything Ontario employers should know about the ESA and its role in protecting your worker's rights.

What is the Ontario Employment Standards Act (2000)?

The Employment Standards Act, 2000 states the minimum standards and conditions employers must provide their workers in Ontario. This law, also known as the ESA, protect most workers in Ontario. A few workers are exempt from protections under the ESA. Some examples include workers in the federal jurisdiction, co-op or work experience students, police officers, and politicians.

It's vital to note that you can't suspend, intimidate or punish an employee for using or asking for their rights under the Ontario ESA. For example, suppose an eligible employee applies for a leave of absence protected under the ESA, such as compassionate care leave, and you deny them. In that case, they can file a reprisal claim with the Ministry of Labour – Employment Standards Branch.

Two women engaged in conversation at a table, related to Ontario Employment Standards Act.

What are some examples of regulations and provisions under the ESA?

Job-protected leaves

The Ontario ESA covers several types of leaves. When an eligible employee applies for any of these leave types, the employer has no right to reject their request or victimize them for taking such time away from work. Examples of this type of leave include:

  • Bereavement leave

  • Critical illness leave

  • Domestic or sexual violence leave

  • Family responsibility leave

  • Parental leave

  • Sick leave

  • Declared emergency leave, and more.

You won't have to keep paying employees their wages under most of these leaves, as they are covered by Employment Insurance (EI). You can get more information on the exact number of days away your employees are entitled to under each leave type on the Government of Ontario’s website .

Benefit plans

Although you aren't required to provide your employees with benefit plans if your business offers staff benefits like paid vacation, dental and medical benefits, or life insurance, you are prohibited from discriminating between employees, their beneficiaries and dependents on the grounds of marital status, sex, or age.

For example, you can't prevent employees from accessing some benefits because they're too old or young, because of their gender or status in the household or because they are single or married (including same-sex couple employees and common law marriages).

In addition, when your employees are away on a leave of absence, you must still provide them with their employment benefits until they return to the workplace.

Hours of work

Ontario employment standards dictate that the maximum number of hours your employees can work in a day is 8 hours in a regular workday and 48 hours in a week. There are conditions where these hours can be exceeded, but they must be detailed and outlined in an agreement signed by you and the employee. You must also pay them overtime pay for all extra hours worked.

You must also give your employees rest periods to ensure they have time to rest, recharge, and attend to other responsibilities and obligations. For every five hours worked in a row, your workers are entitled to a 30-minute break. Your employees are also entitled to at least 11 consecutive hours away from work every day, and if they work in shifts, they must get at least eight hours off between each shift.

Public holidays

Public holidays (also known as statutory or general holidays) are designated days when businesses throughout the province are closed for business.

Eligible employees are entitled to take the day off and receive public holiday pay. If you choose to keep your business open during a public holiday and an employee agrees to work on that day, they must be paid their public holiday pay plus an additional sum referred to as premium pay. Alternatively, an employee can choose to take a different day off work in the future as a substitute holiday. Below are the nine official public holidays covered by the Employment Standards Act Ontario:

  • New Year's Day

  • Family Day

  • Good Friday

  • Victoria Day

  • Canada Day

  • Labour Day

  • Thanksgiving Day

  • Christmas Day

  • Boxing Day (December 26)

Minimum wage

Employers must pay their workers at least the minimum wage rate for Ontario. This includes full-time, part-time, hourly, and salaried workers. It's important to familiarize yourself with current minimum wage rates, as they change annually based on inflation and in line with the Consumer Price Index.

The same minimum wage rate applies to most employees, but the wage rates for students, homeworkers, and hunting and wilderness guides slightly differ. Get more information on minimum wage rates for Ontario.

Vacation entitlements

Vacation entitlements under the ESA cover vacation time and vacation pay. All of your employees who have been with your business for less than five years are entitled to at least two weeks of vacation time for each vacation period. Employees over five years of employment are entitled to three weeks of vacation.

A vacation year period is usually a recurring 12-month period starting when you hire the employee. However, you can use alternative vacation entitlement periods, such as the beginning of each calendar year.

Vacation pay entitlements under the ESA mandate that you pay your staff with less than five years of service with the business at least 4% of their annual gross wages. Meanwhile, you must pay employees with five or more years of employment at least 6% of their gross wages.

Two men shaking hands at a desk, symbolizing agreement under Ontario Employment Standards Act.

Employers rights and responsibilities under the Employment Standards Act (2000)

As an employer in Ontario, you must classify employees correctly. Misclassifying them as workers, such as interns and independent contractors, to avoid providing their rights under the ESA could result in fines and penalties.

You also have the right to give your employees greater rights and benefits than the minimum standards set out under the ESA, but they cannot give them fewer rights than what the ESA has.

However, you can't permit your workers to waive or give up their rights under the ESA. All standards must be met by the employer and received by the employee as long as they're eligible.

Rules for enforcement and compliance with the ESA

The Ministry of Labour is in charge of enforcing the Employment Standards Act and its regulations. When an employee files a claim against an employer for violating any of the minimum standards set out in the ESA, the Ministry initiates an investigation and, based on its findings, rules either in favour of the employer or employee.

The Ministry of Labour also conducts routine inspections of various workplaces, especially those in high-risk industries, to ensure they're conducting business in accordance with the ESA. An employee doesn't have to make a claim against an employer for the Ministry to investigate.

Inspections are most often conducted to:

  • Raise awareness of and help employers understand their responsibilities under the ESA.

  • Enforce the regulations in the ESA.

  • Promote resourcefulness and independence among employees and employers.

Some of the most common penalties for noncompliance with the ESA include compliance orders, tickets, notices of contraventions, fines of over $100,000, and penalties such as criminal convictions.

Recent changes to the ESA and how they may impact employers in Ontario

Effective March 21, 2024, the following areas of the ESA were updated:

Definition of an employee

An employee is a person who performs work, supplies service, and receives training from an employer in exchange for wages. Homeworkers and people performing work during a trial period are also considered employees. This means all workers' contracts and employment agreements must be updated to reflect their rights and entitlements as employees.

Employee Wages

Employers are now prohibited from deducting cash shortages and the cost of theft from someone other than the employee from their worker's salary, such as a dine-and-dash situation. Under changes to wage payments, employers must pay all wages by cheque, direct deposit, or cash. Any wages paid by direct deposit must be into an account with the employee's name unless authorized by the employee. These changes also apply to tips and gratuities. You may need to update your payroll practices to align with these changes.

Tip-sharing policy

Effective June 21, 2024, employers who pool tips must have a written tip-sharing policy and display it in a visible and easily accessible area of the workplace. Employers must also store every tip-sharing policy for at least three years after it's no longer in use.

Temporary help agencies and recruiters

Effective July 1, 2024, all temporary help agencies and recruiters must have a valid license to operate. As an employer, you must ensure that any recruiter or temporary help agency you engage with has a valid license.

Vacation pay agreements

Effective June 21, 2024, employers and their employees must make an agreement in writing stating whether the employer will pay their vacation pay on every pay cheque or in a lump sum at an agreed-upon time. This means employers will need to update their employees' employment contracts and agreements.

How BrightHR helps you stay compliant with the Employment Standards Act

Your employees have basic human rights that allow them to live fair, fulfilling, and happy lives. These rights extend into the workplace and are governed by the minimum standards set out in the Ontario Employment Standards Act.

Not only do these standards inform employees of their entitlements and the conditions of their employment, but they also state the duties and legal rights of both the employer and employees in their working relationship.

It's important to note that as long as you operate your business in Ontario, your workplace is subject to the provisions of the ESA. These regulations are vast and can be complex to understand especially if you lack legal knowledge and employment relations support.

That's where BrightHR comes in. Our suite of people management tools and software is equipped with features like vacation management, time tracking, and payroll reports to help you efficiently track and manage your employee entitlements.

Plus, our round-the-clock employment relations advice BrightAdvice is available to provide guidance and answer any questions on employment legislation any day, any time.

With BrightBase, our library of HR documents, including contracts, checklists, and policies created in line with the latest employment legislation, you won't need to spend hours drafting new policies to support updates to the ESA.

Interested in how BrightHR can better support your business? Schedule a call with one of our experts by booking a demo today!

Lucy Cobb

Employment Law Specialist

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