Navigating Ontario’s Employment Standards Act: Part II ( Employment Standards Act Exemptions )

Ontario’s Employment Standards Act (the ESA)

The ESA sets out the minimum terms of employment for most employees in Ontario. It is also full of exemptions. This article deals with five (5) of the Employment Standard Act exemptions.

Exemptions from Five Minimum Standards

Applicability – Generally, the Act applies to an employee and his or her employer if the employee’s work is to be performed in Ontario.

The Act does not however apply to federally regulated employers like the banks and the federal government. Ontario government employees are also exempt from many sections of the Act but not the notice of termination and severance pay provisions.

Overtime pay – Generally, an employer shall pay an employee overtime pay of at least one and one-half times his or her regular rate for each hour of work in excess of 44 hours in each work week.

Certain professionals however are not entitled to be paid overtime pay such as:  architects; dentists; lawyers; doctors; engineers, accountants, and veterinarians and students in these professions. In addition, a person whose only work is supervisory or managerial in character is not entitled to overtime pay. Local and highway drivers are only entitled to overtime pay after 50 and 60 hours, respectively.

Hours of Work – Generally, no employer shall require or permit an employee to work more than eight hours in a day or 48 hours in a work week unless the employer obtains approval from the Director of Employment Standards.

In addition to the above-noted professionals, and persons whose only work is supervisory or managerial in character, this minimum standard does not apply to funeral directors, and the superintendent of a residential building who lives in the building.

Public holiday pay – Generally, an employee is entitled to receive nine (9) paid public holidays and the pay is calculated as follows: the total amount of regular wages earned and vacation pay payable to the employee in the four work weeks before the work week in which the public holiday occurred, divided by 20.

An employee is not entitled the public holiday pay, however, if he or she fails, without reasonable cause, to work all of his or her last regularly scheduled day of work before the public holiday or all of his or her first regularly scheduled day of work after the public holiday.

Termination pay – Generally, an employee who has been continuously employed for three months or more is entitled to receive notice of termination (or pay in lieu of this notice). There are however numerous exemptions to this requirement including: (i) an employee on a “temporary” lay-off as defined in the Act; (ii) an employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer; (iii) an employee whose employment is terminated after refusing an offer of reasonable alternative employment with the employer; and (iv) a construction employee.

Additional Information about the ESA

For an overview of the ESA, click here.

For a discussion of when interns are entitled to be paid, click here.

For a discussion of how complaints are investigated under the ESA, click here.

For a discussion of how proposed amendments to the ESA could affect small businesses, click here.

Lessons to Be Learned

1. Being aware of the Employment Standards Act exemptions that permit employers to legally avoid complying certain minimum standards. For example, did you know that IT professionals are exempt from the hours of work, and overtime pay sections of the Act?
2. Some employees call in sick the day before or after a long holiday weekend to extend the weekend. An employer is not required to pay for the public holiday if the person was not really sick.
3. There are MANY exemptions from the obligation to provide termination pay. An employer should always make sure that none of the exemptions apply before paying out termination pay.

If you have any questions about Employment Standards Act exemptions, or other employment standards, please contact our managing partner, Doug MacLeod, at 416 317-9894 or at [email protected].