New Ontario Employment Standards Act

Introduction

Global development has an increasing impact on how people work, from determining areas where the demand for employees is high to offering opportunities for international cooperation. Preparing to work in the changing world is one of the central goals of the millennials, as they are required to find a balance between their needs and their abilities. The governments, too, have a substantial role to play in the process, as they can mediate the adverse effects of the changes and promote positive development.

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Changes to Ontario Employment Standards Act

In July 2016, the Ontario Ministry of Labour issued a report describing the shifts in the workplaces and their effect on how the employees work. The report also includes a proposition for changes to the Employment Standards Act, which currently governs the employer-worker relationship across the province. If applied, the changes would help to ensure the protection of vulnerable groups of workers in the contemporary labor market (Crawley, 2017).

Proposed Changes

The report contains more than 200 change proposals, submitted to the Special Advisors; some of them are conflicting or even contradictory (Mitchell & Murray, 2016), which means that not all of the proposals will be implemented. For employees, there are several most significant possible changes.

Paid vacation allowance

One of the most significant changes might be the increase of paid vacation allowance per year (Mitchell & Murray, 2016). Today, workers are normally allowed two weeks of paid vacation each year; the proposition is to increase the allowance to three weeks either for all employees or for those who have worked with the company for a substantial period (Mitchell & Murray, 2016).

Part-time, temporary, and casual employees

The next important proposition concerns part-time, temporary, and casual employees, who are usually paid lower than their full-time colleagues for the same type of job (Mitchell & Murray, 2016). The proposed change is to require companies to pay the same amount to all types of workers, regardless of their schedule, as long as the required skills, competencies, and tasks are the same (Mitchell & Murray, 2016).

Overtime work

Overtime pay is yet another area for concern of the unions and policymakers. According to the current ESA regulations, “Overtime pay is 1.5 times the employee’s regular rate of pay and is paid on weekly hours worked more than 44” (Mitchell & Murray, 2016, p. 187). However, the Interim Report proposes to decrease the overtime work threshold from 44 to 40 hours, allowing employees who work more than 40 hours per week to be qualified for overtime pay (Mitchell & Murray, 2016).

Scheduling

There are two major propositions with regards to scheduling for both casual and contract workers. First, Mitchell & Murray (2016) offer to force companies to post employees’ schedules at least two weeks in advance. Second, it is proposed to require employers to pay employees more for last-minute changes to shifts: if this policy is applied, it will provide that “employees receive the equivalent of 1 hour’s pay if the schedule is changed with less than 2 days’ notice and 4 hours’ pay for schedule changes made with less than 24 hours’ notice” (Mitchell & Murray, 2016, p. 203). Finally, another reform could require employers to obtain consent from their workers before adding hours or shifts after the initial schedule has been posted (Mitchell & Murray, 2016).

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ESA exemptions

The current version of ESA contains over 85 complex exemptions, which may permit individual employers to avoid paying minimum wage, deny paid vacation allowance, refuse overtime pay, and so on (Mitchell & Murray, 2016). Most of these exemptions are deemed unfair and obsolete, which is why the Report proposes to either lift some of the exemptions or offer alternative solutions for the businesses that are currently operating under the exemptions (Mitchell & Murray, 2016).

Rationale for Change

Most of the propositions for the ESA reform were submitted by trade unions and employee advocates (Hanson, Poysa, Di Cesare, & Fineblit, 2016) and were mainly justified by the unfair treatment of workers under the Act. For instance, the differences in pay between full-time and part-time employees may often lead to unfair treatment and increased pressure on the latter, as they are forced to work the same amount of hours as full-time workers but receive a wage that is up to two times lower (Sienkiewicz, 2017). This can severely affect the lives of part-time workers, many of whom are students from the millennial generation. Another reason for this change is the growing market of part-time work, which now involves more than 3.4 million people, or 19% of the population (Sienkiewicz, 2017). Similarly, exemptions from the ESA often result in minimal wages and unfair treatment of employees (Carter, 2017). In the case of vacation allowance, however, the main reason for the proposition is the policy in other provinces: “Compared to other Canadian provinces and the federal jurisdiction, Ontario has the least generous provisions concerning vacation time and pay” (Mitchell & Murray, 2016, p. 207).

Implications for Employers and Workers

If the proposed changes to the ESA take place, the new regulations will improve workplace culture in many companies. For instance, the employers who rely on cheap part-time labor will find themselves struggling financially, as part-time workers will no longer be the cheapest alternative. For instance, in restaurant chains and grocery stores, which tend to have more part-time workers than full-time contract workers, the expenses will rise steeply. Moreover, some businesses might struggle with determining the correct payment amount for part-time workers, especially if they do not have similar full-time positions. Similarly, the companies who were subject to exemptions before the changes might not find themselves in a favorable position, as they will be required to pay a minimum wage and provide for overtime work and vacations. Certain propositions, such as the changes to termination requirements, will affect companies with a high staff turnover, as they will be required to raise severance pay and increase the notice period for termination (Hanson et al., 2016).

However, there are still some benefits that employers may yield from the changes. First, the changes in corporate culture in regulations will increase employee satisfaction, thus decreasing turnover and promoting effectiveness. For example, many part-time workers change or quit their jobs due to unfair pay; providing equal pay for these workers would motivate them to stay in the company, which would reduce training costs and enhance the employer-worker relationship. The reforms to ESA will also require employees to provide a two weeks’ written notice before quitting, which gives employers sufficient time to find a replacement (Hanson et al., 2016). Moreover, closing the gap between working conditions between Ontario and other provinces could prevent workers from moving to another area, thus causing the professionals and talents to remain open for employment.

As for the employees, the new regulations will be largely beneficial, especially for those who work in part-time jobs and in the companies that require frequent overtime work. Carter (2017) argues that the reform is mainly focused on tailoring work conditions to the new realities of the millennial workforce, including the popularization of part-time and contract jobs. The changes would enable these categories of workers to receive fair pay and avoid exploitation, which is mainly driven by the low labor price. A better corporate environment is also a likely result of the reform. Working in a healthy climate will reduce stress and frustration, while at the same time promoting motivation and providing opportunities for better living.

Nevertheless, some categories of workers may be affected by the new regulations in an adverse way. For example, one of the propositions is to expand the current exemptions to include workers who earn more than a certain amount (Hanson et al., 2016). While it might benefit some employers by cutting wage and salary expenses, this change will not be welcomed by employees who already earn a substantial amount of money.

The Changing Labor Market

Drivers of Change

Several main forces drive the changes that are happening to the labor market worldwide. The main driver of development, in this case, is globalization. Spence (2011) states that “Over the past 60 years, it has accelerated steadily as new technologies and management expertise have reduced transportation and transaction costs and as tariffs and other man-made barriers to international trade have been lowered” (p. 28). The effect of globalization can be seen in many countries, both developed and developing. For instance, developing countries, including those located in Asia and Latin America, are now becoming areas with high economic growth due to increased international trade and other opportunities provided by globalization (Spence, 2011). As a result, a variety of employment opportunities emerged, particularly in the field of international cooperation and trade (Spence, 2011). However, not all effects of globalization are beneficial. The decrease in costs and tariffs caused many large companies, particularly in the fashion and clothes industry, to move their production enterprises to develop countries. While the presence of stable companies could potentially support the economy of these regions, it frequently resulted in decreasing labor prices and exploitation: “MNCs are said to underpay and otherwise exploit poor people in developing countries, exporting jobs that should have stayed in the United States” (Spence, 2011, p. 35).

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Globalization also contributed to other drivers of change in the labor market. For instance, it caused an increase in immigration, which is a major force affecting job patterns. As the number of immigrant workers increases, so does the share of part-time work: in Ontario, recent immigrants represent 16% of part-time and temporary workers (Sienkiewicz, 2017). Another effect of globalization was the growth of the technology sector, caused by the international cooperation of developers and scientists. The effect of technology on the labor market is already prominent: according to Spence (2011), it leads to the loss of jobs through the substitution of workers with labor-saving technologies.

The Role of Government

The impact that the government can potentially have on the labor market in times of change is excellently illustrated in the case of ESA reform. For example, the government can help to decrease the exploitation of workers by setting a decent minimum wage. It can also reduce the pay gap between immigrant and local workers, thus equalizing their chances of getting hired and balancing the jobs in the community. Moreover, the government could potentially restrict the use of labor-saving technologies by providing subsidies to companies that avoid job cuts. The government is the primary force regulating the relationship between the worker and the employer, and hence it has the power to protect the employees in the changing market conditions.

Impact on the Millennials

The changes in the employment market have a substantial impact on the millennials, providing both opportunities and limitations. First, technological development and globalization promote certain industry areas, such as information technologies, logistics, international relations, and so on (Spence, 2011). By choosing a popular area for future career development, the millennials can ensure excellent job prospects and higher pay. Globalization also created opportunities to study overseas, which can provide the millennials with more job offers and increase their chances for success in the global world.

On the other hand, certain effects of development are already worrying. For example, technological development might lead to more labor-saving technologies in the future, which would eliminate the need for professionals in these areas. Moreover, the increase in immigration and international trade, if not mediated by the government, can result in lower pay and increase competition for employment in developed countries, which will make it more difficult to obtain a job that provides for a reasonable lifestyle.

Average Urban Living Costs

For the millennial generation, certain factors make the living costs higher. For instance, most of the millennials are increasingly dependent on technology, which is why I included items such as mobile data and internet access in the calculation. On the other hand, millennials tend to be less interested in restaurant meals, which is why the weekly cost of food is only comprised of regular groceries and does not include expensive meals.

To perform my calculations, I chose to focus on the costs of living in Toronto, Ontario, as it is one of the areas that provide a high number of opportunities for young professionals, such as the millennials. I divided the expenses into major items and estimated the costs per item for a member of the millennial generation.

Groceries (avg.) $284.665

One-bedroom flat rent $1300

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Utilities $106

Entertainment (cinema, takeout, leisure activities) $200

Transportation (monthly pass) $146.25

Phone and internet $70 (Bell, 50Mbps) + $80 (Virgin Mobile, unlimited minutes + 2GB data)

Clothing $200

Minor expenses (hygiene supplies, medication, snacks, coffee, etc.) – $100

Total per month $2452.915

Total per year $29434.98

Based on these calculations, to live a reasonable lifestyle, an average millennial needs to earn $29 500 per year. Apart from the salary, the employment should also feature indirect workers’ compensation, including corporate insurance and compensation for any injuries at work.

Conclusion: Preparing for the Changing Job Market

The current changes in the job market create both opportunities and challenges for the millennial generation. However, there are measures that the millennials could undertake to protect themselves from the negative impacts of change. For instance, choosing an area of the industry where the introduction of labor-saving technologies is highly unlikely, such as IT development, law, or international policy, would decrease the possibility of job cuts due to technological advancements. Undertaking opportunities to study abroad, on the other hand, would prepare the millennials for working in the age of globalization and enhance their CV. One of the most important steps, however, is to develop a thorough understanding of the forces that affect the job market now and may potentially change it in the future. Being aware of the current tendencies can enable the millennials to choose a profitable area of industry to work in, thus ensuring future stability and success.

References

Carter, A. (2017). Hard work, long hours, little pay: Building super says she was paid $1.18 an hour. CBC News Hamilton. Web.

Crawley, M. (2017). Big changes considered for Ontario workplaces. CBC News Toronto. Web.

Hanson, J., Poysa, S., Di Cesare, A., & Fineblit, J. (2016). Government report indicates potential overhaul of Ontario labour and employment landscape. Osler. Web.

Mitchell, C. M., & Murray, J. C. (2016). Changing workplaces review: Special Advirors’ interim report. Web.

Sienkiewicz, A. (2017). Part-time grocery clerks are paid at a lower hourly rate than full-time clerks according to agreement. CBC News Toronto. Web.

Spence, M. (2011). The impact of globalization on income and employment. Foreign Affairs, 90(4), 28-41.

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StudyCorgi. (2021, May 20). New Ontario Employment Standards Act. Retrieved from https://studycorgi.com/new-ontario-employment-standards-act/

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"New Ontario Employment Standards Act." StudyCorgi, 20 May 2021, studycorgi.com/new-ontario-employment-standards-act/.

1. StudyCorgi. "New Ontario Employment Standards Act." May 20, 2021. https://studycorgi.com/new-ontario-employment-standards-act/.


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StudyCorgi. "New Ontario Employment Standards Act." May 20, 2021. https://studycorgi.com/new-ontario-employment-standards-act/.

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StudyCorgi. 2021. "New Ontario Employment Standards Act." May 20, 2021. https://studycorgi.com/new-ontario-employment-standards-act/.

References

StudyCorgi. (2021) 'New Ontario Employment Standards Act'. 20 May.

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