Retail Victory: ONTARIO GOES BACK TO THE OLD RULES TO CALCULATE HOLIDAY PAY
After extensive advocacy by Retail Council of Canada (RCC) and the Canadian Payroll Association, the Ontario Government has moved to suspend its new rules in the Employment Standards Act, Part X on Public Holiday pay and revert for 18 months to the rules in place prior to January 1, 2018.
Because many employees are already within the pay period prior to Victoria Day, public holiday pay for May 21, 2018 will be calculated based on the current Employment Standards Act (“ESA”) provisions.
The reversion to pre-2018 rules will be in place for Canada Day, July 1, 2018 and remain in place until December 31, 2019.
The government is also establishing a review process to make recommendations for improved rules, which are expected to be in place for January 1, 2020.
BACKGROUND AND NEXT STEPS
Public holiday pay calculations have long been a source of concern for Ontario’s Ministry of Labour and were the most frequently encountered source of non-compliance in the ESA, most of which has been due to inadvertent miscalculation. In consequence, Bill 148 made changes to the ESA, under which public holiday pay is calculated based on the regular wages that an employee earns in the pay period prior to the public holiday, divided by the number of days that the employee works in that period.
Unfortunately, this approach has proved more problematic than the issues that it sought to correct. Some of the problems that arise under the current rules include additional costs to employers, disincentives for employees to accept shorter shifts in the pay period before a public holiday, disproportionate treatment of commissions and, in some instances. the under-rewarding of full-time employees relative to part time employees.
RCC highlighted these problems to government, including written submissions and meetings with senior policymakers. The government recognized the shortcomings of the new rules and decided that Part X of the ESA requires a full review.
RCC will work with all members to ensure that the post-2019 rules are better thought-through and will also seek to establish a model for holiday pay calculation, Canada-wide, given that there are currently 11 different systems in place. This presents particular challenges for retail members who have stores in more than one province.
If members wish to make direct submissions to the government, they can be sent to exemptions.review@ontario.ca.
Please see the following link to today’s announcement by the Government of Ontario.
If you have any questions or concerns, please don’t hesitate to contact: Karl Littler, VP, Public Affairs at: 416-467-3783 (office) 416-906-0040 (cell) or by email at klittler@retailcouncil.org
