Equal pay for equal work? Not under Ontario’s new statutory holiday pay rules

The Ontario government is working to ensure supports are put in place for small businesses and farmers, ahead of the $15 minimum-wage hike.
The Ontario government is working to ensure supports are put in place for small businesses and farmers, ahead of the $15 minimum-wage hike. Sean Kilpatrick / File / The Canadian Press

When it passed the law that raised Ontario’s minimum wage, the government of Premier Kathleen Wynne also talked about introducing “equal pay for equal work” for part-time, temporary and casual employees. Those workers who are doing “substantially the same work” as full-time, permanent employees, would be guaranteed the same rate of pay, the government said.

But one change established by the so-called Fair Workplaces, Better Jobs Act, which came into effect Jan. 1, is resulting in significant pay disparities among temporary workers.

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Under the new rules, public holiday pay is equal to an employee’s average daily earnings, rather than being tied to the number of hours worked.

This means, for example, that someone working a full shift once a week at $100 per day would receive $100 in public holiday pay for one day. However, someone working two half-day shifts per week at $50 per day would only receive $50 for the same holiday break.

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“It makes no sense whatsoever,” said Steve Long, president of musical instruments store chain Long and McQuade.

“One of the last things you want to do as an employer is to have to explain policies to staff that make no sense,” he added.

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Asked to comment on the holiday pay premium that the new rules seem to bestow on part-time workers covering longer shifts over fewer days, the Ontario Ministry of Labour noted that changes to the compensation formula were made “based on public input.”

“The government heard that employers and employees found the pro‑rating formula overly complex and confusing. Incorrect payment of public holiday pay was one of the most common breaches of the [Employment Standards Act]. The simplified formula means that employees are entitled to their average regular daily wage.”

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Still, the new rules are far from straightforward, once all variables are taken into consideration, according to the Canadian Payroll Association (CPA).

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“The [CPA] would like to point out that the changes made by the Ontario government make the calculation for the public holiday pay the most complex in the country,” Steven Van Alstine, vice-president for education at the CPA told Global News via email.

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New rules contribute to raising the cost of hiring part-time staff in general

Dan Rishworth, owner of sports retailer Enduro Sport, worries about the cost of hiring part-time staff.

The new statutory holiday pay regulations, along with the minimum-wage hike and other recent changes to worker compensation, are directing financial resources toward part-time employees rather than “the full-time staff who are heads of households,” said Rishworth.

The Ministry of Labour told Global News that half of the workers in Ontario earning less than $15 an hour before Jan. 1 were between the ages of 25 and 64, while the share of part-time workers stands at 20 per cent.

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“This represents millions of people, many of them working multiple jobs supporting a family on a wage that just doesn’t go far enough,” the ministry said in a statement.

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Still, the new $14-an-hour minimum wage, along with the revised holiday pay formula, make it considerably more expensive for businesses to hire part-time workers. The cost increase is roughly between 25 per cent for a minimum wage part-time employee working four eight-hour days per week and 45 per cent for a minimum-wage employee working only one eight-hour shift per week, according to simplified calculations provided to Global News by an Ontario small business owner and reviewed by a payroll professional.

Most small business owners Global News spoke with said the changes create an incentive to hire a smaller number of temporary staff working several shifts per week rather than a larger number of workers covering only one or two shifts per pay period.

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