I am often asked simple questions by small businesses in the community and I am surprised that the majority of the small business owners I talk to do not know the first thing about employment standards. If you hire employees you need to at least be aware of the minimums of what is required for you to know as a business owner.
Part V, Sections 11 to 14 of the Ontario Employment Standards Act deals with the payment of wages.
The Act indicates that as an employer you must establish a recurring pay period and a recurring pay day for your employees. You shall then pay all wages earned during each pay period, other than accruing vacation pay, no later than the established pay day. There prescribed manner is by cash or cheque payable to the employee only. You can obvioulsy use direct deposit to pay your employees, but the account must be in the employee’s name; no person other than the employee or a person authorized by the employee has access to the account.
You also need to provide your employees with statements. On or before your employee’s pay day, you are to give to your employee a written statement setting out several things including the pay period for which the wages are being paid; your employee’s wage rate, if there is one; and the gross amount of wages to be paid. You are also to state the amount and purpose of each deduction from wages and the total net amount being paid out the your employee. The statements need to be in writing or you can email the statements to your employees – ideally the information should be kept separate from the cheque.
Your employees has the right to a vacation pay statement. If your employee requests a vacation pay statement you must prepare one and provide the information no later than seven days after the request or the first pay day after the employee makes the request. You only have to legally provide the information with respect to each stub year or vacation entitlement year only once. If your employee has agreed that vacation pay will be paid on each pay cheque as it is earned, you technically do not need to keep records and provide statements about vacation pay. You must then pay it separately from the amount of wages being paid out, and prepare a separate statement that sets out the vacation paid that will be paid – you do need to keep a record of this information.
If employment ends – besides the obvious providing of the ROE - you must pay your employee’s wages no later than the later of seven days after the employment ends or what would ordinarily have been your employee’s next regular pay day.
With respect to deductions- the ESA notes that deductions can only be made 3 ways – through Statutory Deductions -such as EI, CPP and Income Tax. You CANNOT deduct more than the statute allows and you are not allowed to make deductions if the money is not remitted to the proper authority. You are also allowed to make deductions if set out by Court Order. If you get a Court Order – follow it. Don’t make deductions any other way – even if you employee ends up owing you money (i.e. breaking stuff accidentally). You can also make deductions via written authorization, if your employee has signed a written statement authorizing the deduction that specifies the amount of money to be deducted or it provides a method of calculating the specific amount of money to be deducted.
Be careful – Your employee’s verbal authorization or a general statement that he or she owes you money is not sufficient to allow a deduction from wages. Even if you have authorization – it is illegal to make deductions to cover a loss due to work mishaps – i.e. over or under counting money, spoiling items or breaking things. You should never deduct money from your employee’s pay cheque to cover these things.
It all seems like simple stuff – but it is required by law.
If you have any questions please do not hesitate to contact me through the contact form, or you may visit www.haber-lawyer.com and contact me via email at matt.lalande@haber-lawyer.com
Under the ESA, if you sell your business or a part of your business and the purchaser subsequently employs any employee of yours, the employment of that employee shall be deemed not to have been terminated or severed for the purposes of the Employment Standards Act. The employee’s employment with the buyer shall be deemed to have been employment with the seller – meaning that any subsequent calculation of the employee’s length or period of employment under the ESA is not interrupted. – Remember this is Ontario Standards only.
There are some exceptions to this. Consult me if you need more information.
Section 5 of Ontario Employment Standards Act states that neither you nor your employee can contract out of the minimum standards set under the ESA. Also, if you draft out an employment contract between you and your employee that mandates that your employee is to receive a greater benefit with something that directly relates to the same subject matter as the employment standards provides, the provision or provisions in the contract applies and the employment standard does not apply
In accordance with Employment Standards Act, the Minister of Labour prepares and updates a poster that summarizes the ESA and all of its regulations This poster is titled “What You Should Know About the Employment Standards Act” and should be posted in a conspicuous place in the workplace. A poster copy is attached. The reason the Ministry publishes this poster is to make sure that not employers understand their obligations toward their employees, but also that employees know their rights.
What does the poster contain?A brief summary of the “highlight” of the employment standards act. including:
- the hours of work
- rest periods
- overtime pay
- minimum wage
- payroll records
- vacation time and pay
- public holidays
- leaves of absence from work
- termination notice and pay
- reprisals
- enforcement
What do you do if your workplace does not speak English?
If the majority language of a workplace is a language other than English, the employer must contact the Ministry of Labour to see whether the ministry has prepared a translation of the poster into that language
Do you need to hang the poster?
An employer who fails to meet these posting requirements may be fined and/or prosecuted by the ministry.
*Employment Standards Act, 2000, S.O. 2000, c. 41, s. 2(1).
*Employment Standards Act, 2000, S.O. 2000, c. 41, s. 2(3).
E. Payment of Wages under the Ontario Employment Standards Act
Posted by: Hamilton Employment Lawyer | Mississauga Employment Lawyer | Comments (0)I am often asked simple questions by small businesses in the community and I am surprised that the majority of the small business owners I talk to do not know the first thing about employment standards. If you hire employees you need to at least be aware of the minimums of what is required for you to know as a business owner.
Part V, Sections 11 to 14 of the Ontario Employment Standards Act deals with the payment of wages.
The Act indicates that as an employer you must establish a recurring pay period and a recurring pay day for your employees. You shall then pay all wages earned during each pay period, other than accruing vacation pay, no later than the established pay day. There prescribed manner is by cash or cheque payable to the employee only. You can obvioulsy use direct deposit to pay your employees, but the account must be in the employee’s name; no person other than the employee or a person authorized by the employee has access to the account.
You also need to provide your employees with statements. On or before your employee’s pay day, you are to give to your employee a written statement setting out several things including the pay period for which the wages are being paid; your employee’s wage rate, if there is one; and the gross amount of wages to be paid. You are also to state the amount and purpose of each deduction from wages and the total net amount being paid out the your employee. The statements need to be in writing or you can email the statements to your employees – ideally the information should be kept separate from the cheque.
Your employees has the right to a vacation pay statement. If your employee requests a vacation pay statement you must prepare one and provide the information no later than seven days after the request or the first pay day after the employee makes the request. You only have to legally provide the information with respect to each stub year or vacation entitlement year only once. If your employee has agreed that vacation pay will be paid on each pay cheque as it is earned, you technically do not need to keep records and provide statements about vacation pay. You must then pay it separately from the amount of wages being paid out, and prepare a separate statement that sets out the vacation paid that will be paid – you do need to keep a record of this information.
If employment ends – besides the obvious providing of the ROE - you must pay your employee’s wages no later than the later of seven days after the employment ends or what would ordinarily have been your employee’s next regular pay day.
With respect to deductions- the ESA notes that deductions can only be made 3 ways – through Statutory Deductions -such as EI, CPP and Income Tax. You CANNOT deduct more than the statute allows and you are not allowed to make deductions if the money is not remitted to the proper authority. You are also allowed to make deductions if set out by Court Order. If you get a Court Order – follow it. Don’t make deductions any other way – even if you employee ends up owing you money (i.e. breaking stuff accidentally). You can also make deductions via written authorization, if your employee has signed a written statement authorizing the deduction that specifies the amount of money to be deducted or it provides a method of calculating the specific amount of money to be deducted.
Be careful – Your employee’s verbal authorization or a general statement that he or she owes you money is not sufficient to allow a deduction from wages. Even if you have authorization – it is illegal to make deductions to cover a loss due to work mishaps – i.e. over or under counting money, spoiling items or breaking things. You should never deduct money from your employee’s pay cheque to cover these things.
It all seems like simple stuff – but it is required by law.
If you have any questions please do not hesitate to contact me through the contact form, or you may visit www.haber-lawyer.com and contact me via email at matt.lalande@haber-lawyer.com