From JDSupra, Khalfan Khalfan and Tamara Ticoll discuss Ontario’s Bill 88 which amends the Employment Standards Act, 2000 (“ESA”) to exclude certain consultants from its provisions, facilitating the use of independent contractors, and enacts the Digital Platform Workers’ Rights Act 2022 to provide rights to gig workers. Khalfan ad Tamara write:
On April 11, 2022, the Ontario government’s Bill 88, the Working for Workers Act, 2022 (“Bill 88”), received royal assent. Earlier this year, we wrote about Bill 88 on this blog, when it was still at second reading. In addition to amending the Employment Standards Act, 2000 (the “ESA”) to require employers to have in place a written policy regarding electronic monitoring, Bill 88 introduces new penalties under Ontario’s Occupational Health and Safety Act (“OHSA”) and enacts new legislation referred to as the Digital Platform Workers’ Rights Act, 2022 (the “Digital Act”) to provide certain minimum entitlements and rights to workers in the gig economy, among other changes.
Below is a summary of key provisions introduced by Bill 88, along with an update on the upcoming minimum wage rate increase.
Minimum Wage Rate:
The Ontario government has announced that effective October 1, 2022 the general minimum wage rate will increase from $15 per hour to $15.50. Special minimum wages rates will also increase, as detailed in the announcement.
Certain Business and IT Consultants Not Subject to ESA
Bill 88 amends Section 3 of the ESA to make clear that as of January 1, 2023, the ESA will not apply to certain business and information technology consultants, defined in the legislation as follows (each, a “Consultant”):
- “business consultant” means an individual who provides advice or services to a business or organization in respect of its performance, including advice or services in respect of the operations, profitability, management, structure, processes, finances, accounting, procurements, human resources, environmental impacts, marketing, risk management, compliance or strategy of the business or organization; and
- “information technology consultant” means an individual who provides advice or services to a business or organization in respect of its information technology systems, including advice about or services in respect of planning, designing, analyzing, documenting, configuring, developing, testing and installing the business or organization’s information technology systems.
To be exempt from the ESA, a Consultant must meet the following criteria:
- provide services through (i) a corporation of which they are a director or a shareholder party to a unanimous shareholder agreement or (ii) a sole proprietorship of which the Consultant is the sole proprietor;
- be subject to an agreement for services that sets out when the consultant will be paid and the amount the consultant will be paid, which must be greater than $60 per hour (excluding bonuses, commissions, expenses and travelling allowances and benefits) and must be expressed as an hourly rate; and
- be paid the amount set out in the above agreement.
Further requirements may be prescribed in the future and as such, we are continuing to monitor for regulations and/or guidelines.
Employers will need to be vigilant when retaining business and IT consultants as independent contractors, to ensure that they fall under the criteria set out in the ESA. Failure to do so may result in misclassification liability under the ESA. Employers should also ensure that going forward any independent contractor agreements in respect of business and IT consultants (including any templates) set out a payment schedule and provide for payment of an hourly rate of at least $60 per hour as described above.
Digital Platform Workers’ Rights Act, 2022: New Rights for Gig Workers
The new Digital Act has been created to provide rights for workers who perform digital platform work. Individuals in this industry are commonly engaged as independent contractors and, where characterized as such, do not enjoy the rights and protections afforded to employees under the ESA. The Act is aimed at establishing minimum rights for these workers.
Digital platform work is defined under the Act as “the provision of payment ride share, delivery, courier or other prescribed services by workers who are offered work assignments by an operator through the use of a digital platform”, commonly referred to as “gig work.”
The new rights for gig workers established under the Act include the right to information, recurring pay periods and pay days, minimum wage as payable under the ESA, notice of removal of a digital platform (as well as an explanation as to why), and rights to resolve work-related disputes and be free from reprisal (among others).
The Act will come into force on a date to be named by the Lieutenant Governor (meaning it is not yet effective).
Corporations who engage workers who perform digital platform work should become familiar with the rights created under the Act, and as well as the relevant rules, processes and requirements set out therein with respect to record keeping and enforcement.