Dentists should be aware of recent changes to Ontario employment legislation affecting an employer’s ability to use alternative vacation pay periods. This article will examine how Ontario employment law has changed, what dentist employers can do to comply with the changes, and what other upcoming changes are in store that will impact dental practice owners.
For a discussion on vacation and bonus entitlements for employees on parental leave, see this article.
Why has Ontario employment law changed?
Ontario’s Bill 149, the Working for Workers Four Act, 2024, is part of a series of Ontario legislation aimed at addressing contemporary workplace issues under the “Working for Workers” policy banner. Receiving royal assent on March 21, 2024, Bill 149 amends several workplace laws at different times, including the Ontario Employment Standards Act, 2000 (ESA).
On June 21, 2024, one of these amendments came into force which changed the vacation pay time requirements for employers under the ESA. Dental practice owners with employees should note these changes.
What are the new vacation pay period requirements?
Effective June 21, 2024, an agreement, in writing, with an employee is required if an employer wishes to provide the employee’s vacation pay on a time period that is not a lump sum prior to the vacation.
This means that dental owners must ensure that they have their office staff, hygienists, and other employees sign a written agreement if they plan to pay vacation entitlements using an alternative method to the default under the ESA.
The default method, under section 36 the ESA, requires that employers pay an employee’s vacation pay in a lump sum before the employee begins their vacation. Before June 21, 2024, employers could provide vacation pay in alternative ways, such as a percentage of wages earned on each paycheque, so long as the employee consented to the alternate payment time. If the employee consented, they would take their vacation and receive their owed vacation pay at a later time.
Currently, Bill 149 requires that an employer must enter into a written agreement with an employee to provide their vacation pay in a manner other than a lump sum at the start of the employee’s vacation. The alternative arrangement for the timing of the employee’s vacation pay must be specified in the written agreement.
Takeaways
Dentist employers should review their vacation pay practices and the terms of their employment contracts to ensure that the timing of their vacation pay meets the new requirements under Bill 149.
A dentist employer may be able to meet the new requirements in either one of the following ways:
- Create a separate written agreement for the alternative pay period for the employee to sign; or
- Incorporate the alternative pay period into the terns of the employment contract for new employees to sign.
It is essential that dentist speak to their legal team to ensure that they are complaint with the new law and implementing an effective business strategy for their dental practice.
What are other upcoming changes to Ontario employment law?
Bill 149 includes future changes that will come to force at a date to be determined by the Ontario government. These include new requirements for publicly advertised job postings in areas such as pay transparency, artificial intelligence, and Canadian experience requirements. Moreover, the next proposed legislation in the series, the Working for Workers Five Act, 2024 (Bill 190), is set to make changes to sick leave and violation fines under the ESA.
These upcoming changes have implications for how dentists organize, advertise, and enhance their dental business in the future.
Dentists should speak to their legal team to keep up-to-date with legislative changes and to understand how they could affect their legal obligations as an employer.
Thank you to Ephraim Barrera for his contribution to this article. The contents of this article are not to be construed as legal advice. Contact Emerge Law’s lawyers for legal assistance.