The Good, the Bad and the Ugly: Penalties for Violating Ontario’s Employment Standards Act

Many employers regularly – knowingly and unknowingly – contravene sections of the Employment Standards Act (ESA).

Common ESA Violations

Two of the most common violations are:

1. The failure to pay overtime pay

2. The failure to give an employee a day off work with public holiday pay if he or she works on a public holiday.

How an ESA Violation Can Be Discovered

ESA violations are usually discovered in one of two ways:

1. The Ministry of Labour periodically conducts enforcement blitzes and a contravention can be discovered during one of these blitzes. The Ministry’s last blitz focused on the retail sector because this sector, according to the Ministry of Labour “ often employs young, entry-level and part-time workers who may be at greater risk of having their rights violated, and who may lack the ability or resources to understand their rights and have them respected.”

2. An employee files a complaint under the ESA.

The Penalties for Violating the ESA

An ESA officer can impose one or more of the following penalties:

1. Compliance Order.An ESA officer can order an employer or other person to stop contravening a provision and to take certain steps in order to comply with a provision. The order may also specify a date by which the employer or other person must comply with the order. These orders do not require payment of wages or compensation.

2. Order to pay. An ESA officer can order an employer to pay an employee up to $ 10 000 for a violation of the ESA (and more in some cases)

3. Ticket, Notice of Contravention, or Prosecution. An ESA officer can issue a ticket for less serious ESA violations. A ticket carries a set fine of $295, with a victim fine surcharge added to each set fine, plus court costs. Alternatively, the fine for a notice of contravention is up to $ 1000. For some violations the fine is $ 250, $500, $ 1000 for the first, second, and third violation, respectively, in a three year period for each employee. Finally, an employer can be prosecuted and ordered to pay a fine, and/or imprisoned for contravening the ESA. An employer can be fined up to $100,000 for a first conviction. If an employer has already been convicted of an offence under the ESA, it can be fined up to $250,000 for a second conviction. For a third or subsequent conviction, an employer can be fined up to $500,000.

Since the implementation of its revised prosecution policy in 2004, the Ministry of Labour has initiated over 1,825 ESA prosecutions.

Lessons to be Learned

1. You should know which industries the Ministry of Labour is currently targeting for inspection.

2. You should make yourself aware of your obligations under the ESA. For more information on the ESA, click here.

3. You should always co-operate with an ESA inspector because failure to do so is a contravention of the ESA and because he or she has the discretion to decide whether or not to issue you a ticket, notice of contravention or prosecute your organization in addition to issuing an order to pay. In January 2014 a corporation was fined $ 37 500, and two directors of that corporation were fined $ 22 500 each for failing to comply with an ESA officer’s order to pay.

For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on issues that arise under Ontario’s Employment Standards Act. If you have any questions, you can contact him at 416 317-9894 or at [email protected]