In 2017, the Ontario government signed the Fair Workplaces, Better Jobs Act into law. The Act increases the provincial minimum wage, requires employers to give employees personal emergency leave days, and extends leave for domestic and sexual violence as well as various other types of leave. On top of that, it also simplifies how employers calculate holiday pay, establishes new scheduling rules, and contains several other provisions. You may want to help your clients prepare and budget for these changes.
Covering Minimum Wage Increases
Under the new rules, minimum wage increases to $15 per hour by January 2019. That’s an increase of $3.40 per hour over the 2017 rate. Luckily, businesses get to implement the change gradually. They have to raise wages to $14 by January 2018 and then another dollar by the following year. Help your clients identify how to pay for the increased wages. The solution varies depending on their industry and cash flow. Some may be able to lower profits. Others may have to leverage technology and cut hours, and still others may have to raise prices.
Budgeting for Equal Pay Provisions
If your clients use temporary, part-time, or seasonal workers, they may have to pay these workers the same rates as their other employees. Basically, if workers are doing the same job, they earn the same wages under the new law. That said, your clients can pay more based on seniority, merit, or quality of work done. Make sure your clients understand these new requirements and budget accordingly.
Changing Scheduling Practices
In addition to dealing with shifts to their budgets, your clients may have to also embrace other changes. In particular, this Act lays out several new scheduling rules. If your clients write their employee schedules on Friday for the following week, they now need to plan ahead. Under the new laws, employees can turn down shifts with no repercussions if they have less than 96 hours (four days) notice.
Paying for More Leave
The most talked about new leave rule regards a change to personal emergency leave. This applies in situations where an employee needs to miss work due to an illness or a personal emergency such as a disciplinary issue at a child’s school or an emergency with parents. Employers are required to give their employees two paid personal emergency leave days per year so your clients need to account for that. Ideally, business owners should set aside a small percentage of their employees’ income to cover paid leave days. Help your clients figure out how much to set aside. For instance, if a business owner offers employees two paid weeks of vacation, nine public holidays, and two personal emergency leave days, that’s a total of 21 paid days off. If an employee works five days a week for a year (52 weeks), that equates to 260 days, and 21 days is roughly 8 percent of that amount. If your clients set aside 10 percent of their employees’ wages every time they pay them, they should easily have the funds they need to cover paid days off and a bit extra.
Dealing With More Leave
Your clients may also want to budget for the cost of hiring temporary help when their employees take leave. They may want to find a temp organization that can provide labour as needed to cover missing employees, and in some cases, they may need to hire additional part-time staff. The new Act is extremely expansive. To help your clients prepare, help them understand which aspects of the Act affect them. Then, calculate how those sections affect their budget and help them plan for the shits to their cash flow.