Answers to your questions about Ontario's minimum wage law

Two Ottawa labour lawyers answer your questions about whether employers are within their rights to cut certain benefits and perks as they try to cope with Ontario's new minimum wage.

Are employers within their rights to cut benefits, take away paid breaks, keep tips?

Protestors gathered earlier this week outside Tim Hortons locations following the decision by some franchises to cut employee benefits in response to Ontario's new minimum wage law.

Some Ontario employers have been pushing back against the province's new minimum wage law by cutting wages and benefits for staff.

In response, the province plans to hire 175 additional inspectors to make sure the labour changes brought in on Jan, 1, 2018, are being followed.

Colleen Dunlop is an Ottawa labour lawyer representing employers, and Paul Champ is an Ottawa labour lawyer representing employees.

We asked them where the legal line is when it comes to employers and businesses clawing back benefits and perks.   

Q: Some Tim Hortons franchises have faced backlash for cutting paid breaks and reducing benefits. Is what they did legal?       

COLLEEN: There is no legal entitlement to paid breaks in Ontario. So it is legal for them to claw back paid breaks. 

Q:  What about employees losing their staff discount, or having to pay for uniforms when they didn't have to before?  

COLLEEN: Yes, these are legal methods an employer can use to reduce costs.  

Q: Paul, do you agree?  

PAUL: It's legal according to the Employment Standards Act, but it is likely a violation of the contract between the employer and the employees, and that can constitute something called constructive dismissal. If an employer makes too many fundamental changes to an employee's terms of employment that they were already giving them, and if those changes, amount to a 10 to 20 per cent cut in the person's overall earnings, it's considered constructive dismissal, and the person could sue. 

Q: If I work five days a week, and I am cut back to four, that's a 20 per cent cut in hours. Am I being constructively dismissed?

COLLEEN: There is an argument that you are, because you are losing 20 per cent of your income, and an employer is definitely crossing the line.

Q: Labour Minister Kevin Flynn has talked about allegations that businesses in Scarborough told employees to leave their tips in the till. Is that against the law?

PAUL: That is definitely against the Employment Standards Act. Employers cannot take a cut of tips. There are policies about "tip outs," where a percentage of tips is taken and distributed to other employees such as dishwashers and cooks. That is legal. But if an employer takes a cut of the tips and keeps them, they've broken the law.

Q: Colleen, are you getting calls from business owners wondering what options they have?

COLLEEN: Yes. Employers, especially those with limited budgets — social service agencies and small employers — are faced with increased demands for paid sick leave and for increased holiday pay for part-time staff. They are looking for ways to reduce costs. One of the things they are considering is layoffs. They are also looking at whether they even need part-time and casual staff. Part-time employees are being given increases in vacation pay and paid emergency leave. They are also being paid more for holidays.

Q: Paul, are you getting calls?

PAUL: No, not yet. And I am not sure if I will. People on minimum wage are at the bottom of the income ladder. They have lots of struggles, and trying to deal with these kind of things, they usually do it on their own. And lawyers are expensive.

Q: If they don't want to pay or can't pay for a lawyer, what advice do you have if they feel their rights are being infringed upon?

PAUL: If people are having their tips withheld, and the employer is keeping them, they have the right to make a complaint to the Ministry of Labour. It's easy and it's free, and an employment standards inspector will investigate, and they can get an order against the employer to pay. They are also protected from reprisal. The employer can't dismiss them because they made a complaint. If that happens, then I encourage them to come to me because there can be serious damages against an employer who fires an employee for making a complaint to the Ministry of Labour.

Q: What can [the ministry] do if they find employers are violating the law?

COLLEEN: They can fine them or penalize them. Generally, inspectors want to work with employers to make sure the situation so doesn't happen again. So if the employer works to fix it, they probably won't face significant fines.

Q: Paul, are you hopeful that the new legislation is enforceable?

PAUL: Absolutely. I think it's great news that the province is hiring more labour inspectors. So many people at the bottom of the income ladder are vulnerable and don't have the means to get a lawyer, so having the ministry there to help is the best form of remedy.