Employers’ Guide to Ontario’s Working for Workers Four Act 2024

On March 21, 2024, the Ontario legislature gave royal assent to Bill 149, Working for Workers Four Act, 2024 (the “Act”). The Act, which is now in effect, intends to strengthen Ontario’s employee entitlements and Workers Compensation benefits. The Act introduces amendments to the following legislation:

• Digital Platform Workers’ Rights Act, 2022 (“DPWRA”)
• Employment Standards Act, 2000 (“ESA”)
• Fair Access to Regulated Professions and Compulsory Trades Act, 2006 (“FARPCTA”)
• Workplace Safety and Insurance Act, 1997 (“WSIA”)

This article provides an overview of the changes introduced to employment legislation. Employers must review their HR documentation, workplace policies and practices, and implement the necessary changes to remain compliant with statutory requirements. The Act also expands the government’s regulation-making authority, which means employers in Ontario should expect new regulation soon.

What are the changes to Ontario’s ESA?

Strengthened ESA protections to employees in the hospitality and service industry

The Act updates the definition of “employee” to clarify that work done during a “trial period” is regarded as “training.” Thus, any worker engaged in work during a trial period is now unequivocally recognized as an employee. They must be compensated for work done.

Pay deductions due to customer theft

Employers are prohibited from deducting wages due to an employee experiencing a cash shortage or loss of property by a client or customer. The Act clarifies that this prohibition now explicitly extends to situations where a customer of a restaurant, gas station, or other establishment leaves without paying for goods or services consumed or received at the establishment.

Gratuities and tip pooling

With the purpose of ensuring workers in the hospitality and service industries are paid what they are owed, the Act introduces new employer requirements for workers to understand how their tips are calculated and distributed. These new requirements will come into effect on June 21, 2024.

• Tip Policy – Posting Requirement: Employers (or a director or shareholder of the employer) who participate in a Tip Pool or Tip Sharing System are now required to post their Tip Pool/Sharing Policy in at least one conspicuous place in the workplace.
• Tip Policy – Retention Requirement: Employers who participate in a Tip Pool or Tip Sharing system will also be required to retain a hard copy of their policy for 3 years after the policy ceases to be in effect.
• Tip/Gratuity Distribution: Employers are now allowed to distribute tips or gratuities via cash, cheque made by payable to the employee, direct deposit, or by any other prescribed method. Tips that are distributed through direct deposit must be done to the account of a financial institution chosen by the employee and under their name. If it is distributed by cash or cheque, it must be given at the workplace or in another agreeable place by the employee.

Employers in Ontario must review their policies and introduce the necessary changes to documentation and practices to be in compliance with the law. Failure to comply with these requirements could lead to employment claims and risk a workplace inspection from an Employment Standards Branch officer.

Vacation pay

The Act introduces a new requirement for employers to ensure employees understand how their vacation pay will be distributed. Currently, the ESA provides that vacation pay is paid in a lump sum before the employee starts their vacation time, or on the regular pay day on or before the pay period in which the vacation takes place. If the employer and the employee agree to an alternative method of distributing accrued vacation pay, the Act now requires the employer to have a written alternative agreement. This new requirement will come into effect on June 21, 2024.

Pay transparency - What are the changes introduced to recruitment practices in Ontario?

With the purpose of supporting immigration into the province and improving workers’ decision-making in the job market, the Act has introduced pay transparency requirements to recruitment practices.

• Include expected range of wages or salary for the advertised position.
• If an employer uses artificial intelligence (AI) for screening, assessing, or selecting applicants for a position, they must disclose this practice in the job posting.
• Employers are prohibited from including a Canadian experience requirement in publicly advertised job postings and to job application forms.
• Publicly advertised job postings must be stored for 3 years after it was removed.

Unfortunately for employers, this set of new obligations will become effective on a date to be determined by the government’s regulation-making authority. The Act has yet to clarify the definitions for what is a “publicly advertised job posting” or what constitutes “artificial intelligence.”

What are the changes to Ontario’s WSIA?

What is ‘super indexing’ under WSIB?

The Act amends the WSIA to include an “additional indexation factor” for worker occupational injury/illness benefits, allowing the benefit amount to rise beyond the annual inflation rate. Indexation is the process where the value of benefits is adjusted to account for inflation or the other economic factors. “Super indexing,” is then an extra level of adjustment beyond standard indexation, potentially resulting in higher benefit amounts to account for more than just inflation, which may have implications for employer’s WSIB premiums.  

While this gives injured/ill workers increased payouts, it may result in higher experience ratings for employers under the WSIB rating system, forcing them to pay higher premiums. To avoid costly payouts, employers should implement robust Occupational Health and Safety policies to minimize and prevent workplace injuries/illnesses. This amendment to the WSIA is not in force and will take effect on a date to be determined by the government regulating authority.

New benefits for firefighters and fire investigators

Primary-site esophageal cancer contracted by a full-time or part-time firefighter, fire investigators, or a volunteer firefighter that has served a total of at least 15 years is now be presumed to be an occupational disease. The Act further clarifies that this presumption will apply to diseases diagnosed on or after January 1, 1960. However, this benefit is not yet in force; it will become effective on a date decided by the governing authority.

Amendments to Digital Platform Workers’ Rights Act, 2022

While DPWRA is not yet in force, the Act expands the powers of the Regulation-Making Authority to create regulations for “digital platform workers” (e.g., workers who provide ride share, delivery, courier, or other services). The Act introduced amendments to the DPWRA that regulate the maximum length for digital platform workers’ recurring pay period, the maximum delay between the end of a recurring pay period and a pay day, and the minimum wage rules applicable to digital platform workers. This set of amendments are not currently in force; they will come into effect on a future date set by the government regulating authority.

Amendments to Fair Access to Regulated Professions and Compulsory Trades Act

How should regulated professions assess the international qualifications of a new applicant?

The Act increases the oversight and accountability on professional associations in the province. Often, professional associations contact third-party organizations to assess the international qualifications of new applicants. The Act introduces new transparency requirements so that, on one hand, applicants can be more informed about the application process, and, on other hand, professional associations can be held accountable by the practices of third-party providers.  

Upcoming legislative changes for Ontario employers

Are non-disclosure agreements allowed in the settlement of a workplace sexual harassment case?

The Government of Ontario has decided to engage in consultations to limit the scope and use of non-disclosure agreements (NDAs) in the settlement of cases of workplace harassment, misconduct, or violence. The decision to limit the use of NDAs and to prevent its misuse comes on the heels of Bill 26, which came into effect on July 1, 2023. Under this statute, post-secondary institutions are prohibited from using a non-disclosure agreement to prevent the disclosure of any allegations or complaints about an employee’s sexual misconducts toward a student.

A job-protected leave for critical illnesses

Ontario’s Government has initiated consultations to explore legislative options that would allow for the creation of a new job-protected leave for critical illnesses (specifically cancer). The Government seeks to match the length of the 26-week federal Employment Insurance sickness benefit.

Takeaways for employers

Ontario employers must promptly and proactively ensure compliance with employment legislation:

• Effective March 21, 2024, employers must compensate job applicants working a trial shift and refrain from deducting wages from workers in the hospitality and service industry for practices like dine-and-dash or gas-and-dash.
• Employers should review and update their Tip policy practices in order to remain complaint with the new requirements coming into effect on June 21, 2024.
• Employer and Employee agreements to an alternative method for distributing vacation pay must be in writing. Employers must ensure their employment documentation is updated and compliant by June 21, 2024.
• Employers in Ontario should review their recruiting and hiring processes. Employers need to be prepared to include salary ranges in job postings and disclose whether the use of AI is involved in their hiring decision-making.

Do you need help staying compliant with the Working for Workers Four Act, 2024?

Our HR experts can support your business by ensuring all existing policies, procedures, and documentation are aligned with the current legislative changes. See why 6500+ employers across Canada depend on Peninsula for sound HR advice, health and safety risk assessments, and resolving workplace misconducts. Call 1 (833) 247-3652 today to find out more.