Your Obligations

WHY IS THIS IMPORTANT?

Meeting your obligations as an employer is important not only in terms of meeting legal requirements, but also to ensure that your employees are satisfied at work and motivated to perform and stay.  Not complying with these obligations can lead to claims and fines.  To provide the right context, it should be noted “small business” generally refers to businesses with less than 100 employees.

For each of these topics, we look at what it is, why it is important, what it means to you, and provide tools and resources to help you further explore

Please keep in mind that the information provided here does not constitute legal advice. If you require legal advice, please consult a lawyer.

DEVELOPING HR POLICIES

While this portal does not detail how to develop HR policies, the links below provide broad HR advice and tools, including guidance and samples on HR policies and employee manuals. Developing HR policies to ensure compliance and consistency not only inform your employees, but also indicate that you have responded to the various legislative requirements in a thoughtful manner.

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Ontario employment standards

Good working conditions benefit both employees and business owners. Studies show that when employees are satisfied at work, they perform better and stay longer. More than 20,000 employment standard claims are filed in Ontario each year. Facing a claim is both expensive and time consuming, and hundreds of businesses are prosecuted every year.

The Ontario Employment Standards are enforced under the Employment Standards Act, 2000 (ESA), which sets minimum standards and regulations that employers and employees must follow.

Key components of the act include:

  • Payment of Wages and Wage Statements
  • Deductions from Wages
  • Hours of Work
  • Eating Periods
  • Overtime Pay
  • Minimum Wage
  • Public Holidays
  • Vacation with Pay
  • Termination and Severance

WHAT DOES THIS MEAN TO YOU?

The standards apply to almost all employers and employees in Ontario.  Click here to see the few exceptions.  Any HR policies that you develop around the employment standards must not provide less than what is offered in the legislation and/ or regulations. Employers are free to develop policies or practices that enhance those that are required by law.

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Occupational health and safety

The Ontario Occupational Health and Safety Act (OHSA) is Ontario’s key legislation for workplace health and safety. It is in place to protect employees from health and safety hazards on the job. The Act identifies three fundamental employee rights:

  • the right to know about hazards in their work and get information, supervision and instruction to protect their health and safety on the job;
  • the right to participate in identifying and solving workplace health and safety problems either through a health and safety representative or a worker member of a joint health and safety committee;
  • the right to refuse work that they believe is dangerous to their health and safety or that of any other worker in the workplace.

 

The Act outlines the duties and responsibilities of all workplace parties and the rights of employees. However, it makes clear that employers have the greatest responsibility for ensuring health and safety in the workplace. It states that employers must take every reasonable precaution to protect workers, provide information and instruction, and to ensure that workers properly use or wear the required equipment. Failure to comply can result in fines of up to $100,000 and/or up to a year’s imprisonment. Corporations can be fined up to $1,500,000 per charge. Employers and supervisors who fail to comply with the OHSA are also subject to fines of up to $100,000.

WHAT DOES THIS MEAN TO YOU?

Your obligations under the Act depend on the size of your organization.

  • Workplaces with 20 to 49 regularly employed workers are required to have a Joint Health & Safety Committee (JHSC) with at least one certified worker member and one certified management worker. Training in health and safety law and the identification, assessment and control of workplace hazards are required for certification.
  • Workplaces with 50 or more regular employees are required to have a JHSC consisting of at least four
  • Workplaces with fewer than 20 regular employees are not required to have a JHSC unless a designated substance regulation applies to your workplace.
  • Workplaces with more than five workers must have a designated health and safety representative who is selected by the workers they represent.
  • A workplace with five or fewer regular employees does not need to prepare a written health and safety policy. However, if there is a critical injury or fatality, or a visit from an MOL inspector, the owner would be required to “demonstrate and document that people are working safely, and that a disciplinary process is ready to implement”.

 

Regardless of the size of your organization, as an employer you are responsible to:

  • Keep a safe and well-maintained workplace; to take all reasonable precautions to protect your workers from illness and/or injury
  • Provide information about the hazards in your workplace, proper safety equipment, training, and competent supervision
  • Post the Occupational Health and Safety Act in your workplace.
  • Post the WSIB’s “In Case of Injury at Work” poster and to follow proper procedures in case of injury (applicable to employers governed by the Workplace Safety and Insurance Act.

 

Business owners cannot opt out of OHSA, even if they have opted out of WSIB coverage (these are two separate pieces of legislation).

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Workers safety insurance board

Workers Compensations Boards are insurance boards that protect employers from being sued by employees who are injured on the job or who become ill because of workplace conditions. They also provide employees with access to income and benefits if they become injured at work or if they contract a disease caused by workplace conditions.

The employer-funded Ontario’s Workplace Safety and Insurance Board (WSIB) is one of the top 10 disability insurers in North America. In addition to a strong prevention mandate, the WSIB provides insurance for injuries and illnesses incurred in workplaces covered under the Workplace Safety and Insurance Act and supports early and safe return to work.

WSIB provides small businesses with guaranteed no-fault workplace insurance that protects you from costly court settlements and provides services and support when you need it.  They offer incentive programs, value for premium dollars, and services and expertise to small businesses.

Individual employers who fail to register their business or fail to report an accident may be fined up to $25,000 and/or imprisoned for up to six months for each offence. Corporations are liable to a fine of up to $500,000 for each offence.

WHAT DOES THIS MEAN TO YOU?

Below we highlight which employers are required to provide WSIB coverage:

  • Mandatory coverage for construction – Starting January 1, 2013, WSIB coverage is mandatory for independent operators, sole proprietors, partners in a partnership and executive officers in a corporation who work in or carry on a business in construction.
  • Employers who are in industries that are covered on a compulsory basis are required to register with the WSIB within 10 days of hiring their first worker, including family members or apprentices.
  • A worker employed in an industry or business listed in Schedule 1or Schedule 2 of the Act is automatically covered; these include: mining and related industries; manufacturing; transportation and storage; retail and wholesale trades; construction; temporary agencies, hospitality and full-time domestic workers; provincial governments; railways; and telephone companies licensed by the federal government; and municipal governments.
  • You can find detailed information about the coverage status of all businesses and industries in Ontario by referring to the WSIB’s Employer Classification Manual (ECM) on the WSIB’s website.

WHO IS COVERED?

Essentially, employees fall under two categories as described by The Office of the Worker Advisor:

  • “Under a contract of service, which can be written or verbal, a worker agrees to work for an employer in return for wages or salary. The employer controls all aspects of the work: what, when, where and how the work is done. Under a contract of service the employment relationship may include full or part-time work, piece-work, temporary agency work, or short term contracts.” These employees are considered workers under the Act.
  • Contract for service is used to describe a business relationship where a person agrees to perform a specific job in return for payment.” A person doing a job under a contract for service (i.e., an independent operator) is not a worker under the Act and is not automatically insured or entitled to benefits.

 

Information on how your organization is classified (Schedule 1 vs. 2) and what your premiums would be can be found in the resources below.

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Human rights legislation

Human rights legislation seeks to guarantee people equal treatment regardless of identified characteristics (called “prohibited grounds of discrimination”) that have attracted historical stereotyping or bias.  It prohibits discrimination in employment, directly or indirectly, and is enforced by the local human rights commission.

Employers benefit from having environments that are inclusive, diverse, and free of discrimination.  Such workplaces help to attract and retain the best employees, and maximize employee performance and retention. Discriminatory policies and programs can lead to not looking broadly when hiring.  Workplace harassment creates conflict, lowers productivity, and can result in losing valued employees.

Mishandling or ignoring human rights issues can lead to human rights complaints, workers’ compensation claims, grievances under collective agreements, or wrongful dismissal claims. All of these have high costs to the organization in terms of time, money, reputation and morale.

FEDERAL LEGISLATION

Two pieces of federal legislation set the groundwork for creating a diverse and inclusive workplace:

  • The Canadian Human Rights Act ensures equal opportunity and freedom from discrimination for people who are lawfully present in, or legally entitled to return to, Canada. It is in place to prevent discrimination in the federal jurisdiction based on age, sex, race or any other ground covered by the Act.
  • The Employment Equity Act applies to federally regulated employers and service providers; however, companies with more than 100 employees contracting with the federal government need to comply with the Federal Contractors Program.

ONTARIO HUMAN RIGHTS CODE

The majority of employers and small businesses fall under provincial/territorial jurisdiction for human rights legislation; this is the Ontario Human Rights Code. Harassment and discrimination are a violation of the law, and organizations failing to adequately prevent and address them may be held liable.

The Code lists the grounds of discrimination – nobody can discriminate against another person or group of people because of their:

  • Age
  • Ancestry, colour, race
  • Citizenship
  • Ethnic origin
  • Place of origin
  • Creed
  • Disability
  • Family status
  • Marital status (including single status)
  • Gender identity, gender expression
  • Receipt of public assistance (in housing only)
  • Record of offences (in employment only)
  • Sex (including pregnancy and breastfeeding)
  • Sexual orientation

WHAT DOES THIS MEAN TO YOU?

Under the Ontario Human Rights Code, employers, landlords and service providers are required to ensure that they are providing inclusive and non-discriminatory environments. Employers should be aware of human rights legislation as it applies to all employment practices, including:

  • Determining the essential requirements of a job
  • Use of employment agencies
  • Recruitment ads and application forms
  • Interviews and hiring
  • Pre-employment testing
  • Dismissal/termination
  • Promotion and demotion
  • Benefits and wages
  • Workplace harassment

 

OHRA suggests that a complete strategy to prevent and address human rights issues should include all of the following elements:

  • A barrier prevention, review and removal plan
  • Anti-harassment and anti-discrimination policies
  • An internal complaints procedure
  • An accommodation policy and procedure
  • An education and training program

 

Keep in mind that companies with more than 100 employees contracted to the federal government need to comply with the Federal Contractors Program (see the Employment Equity Act page).

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AODA requirements

The Accessibility for Ontarians with Disabilities Act (AODA) is Ontario legislation adopted in 2005 with the goal of making Ontario completely accessible for individuals with disabilities by 2025. Accessibility Standards have been developed for five key areas of daily living:

  • Customer service
  • Information and communications
  • Employment
  • Transportation
  • Design of public spaces standard

 

The first Standard was the Customer Service Standard​, which came into effect in 2012. The remaining four Standards were combined into one regulation called the Integrated Accessibility Standards Regulation (IASR).

WHAT DOES THIS MEAN TO YOU

The Employment Accessibility Standards (EAS) mandate that every organization that provides goods, services or facilities to the public or to other organizations, and has one or more employees, must establish and implement employment policies, procedures, and training related to accessibility in recruiting, hiring, retaining and accommodating people with disabilities. The EAS cover the following:

  • Recruitment, general
  • Recruitment, assessment, or selection process
  • Notice to successful applicants
  • Informing employees of supports
  • Accessible formats and communication supports for employees
  • Workplace emergency response information
  • Documented individual accommodation plans
  • Return to work process
  • Performance management
  • Career development and advancement
  • Redeployment

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Employee equity act

The Employment Equity Act seeks to achieve equality in the workplace so that no person shall be denied employment opportunities or benefits for reasons unrelated to ability and, in the fulfillment of that goal, to correct the conditions of disadvantage in employment experienced by women, Aboriginal peoples, persons with disabilities and members of visible minorities by giving effect to the principle that employment equity means more than treating persons in the same way but also requires special measures and the accommodation of differences. Diverse workplaces are more likely to have recruited and selected from a broad talent base to get the best candidates.

The Federal Contractors Program ensures that organizations that do business with the Government of Canada adhere to the Employment Equity Act.

WHAT DOES THIS MEAN TO YOU?

Employers should identify workplace barriers and develop equity plans for the four designated groups. Only the following federally regulated employers and service providers fall under the federal act:

  • federal departments, agencies and Crown corporations;
  • chartered banks; airlines; television and radio stations;
  • Interprovincial communications and telephone companies;
  • buses and railways that travel between provinces;
  • First Nations;
  • other federally regulated industries, such as certain mining operations.

 

However, under the Federal Contractors Program, organizations with 100 or more permanent employees who want to bid on a federal government contract, or a standing offer of $1,000,000 or more must first sign the Agreement to Implement Employment Equity.

PROMOTING EQUITY

Whether you fall under the requirements or not, you can promote employment equity by focusing on these key areas:

  • identifying and eliminating barriers to employment, promoting equal access to jobs;
  • promoting an equitable workplace in meetings and daily operations; and
  • instituting positive policies and practices and making reasonable accommodations.

 

In practical terms, this means you should:

  • follow fair recruiting practices, considering ways to increase representation of designated group members where feasible;
  • when interviewing candidates, be sensitive to the importance of asking fair, non-biased and job-related questions, keep an open mind with respect to cultural and other differences, accommodate special needs when necessary; and
  • be consistent and document decisions.

 

Business owners and their managers should also ensure that they:

  • communicate the importance of employment equity to all staff and demonstrate that you value diversity; and
  • adopt and enforce a zero tolerance policy toward ethnic, religious, racial and sexist slurs, jokes and stories.

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CRA reporting and payroll

As an employer, payroll requirements include deducting employee Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax from remuneration or other types of income you pay. After making the deductions, the employer must remit the deductions, plus their share, to the CRA. After deductions, employers must report the income and deductions on the appropriate information returns.

Consequences of not meeting your CRA reporting requirements include:

  • Late or missed payments are subjected to an interest
  • CRA has penalties for failing to deduct the required amount of income tax, CPP, and EI; late or missed payments, or failing to file an information return by the due date.
  • Failure to maintain or provide adequate records may result in prosecution by the CRA.

WHAT DOES THIS MEAN TO YOU?

The following steps will help you to understand your responsibilities as an employer and how payroll works. You should maintain proper record keeping throughout this process.

  • Step 1: Determining your status and whether you are an employertrustee, or payer
  • Step 2: Opening a payroll program account (before the first remittance due date)
  • Step 3: Hiring employees (obtain required information)
  • Step 4: Calculating deductions (CPP, EI, and income tax; for both employee and employer portions)
  • Step 5: Remitting deductions (CPP, EI, and Income tax; both employee and employer portions)
  • Step 6: Completing and filing information returns (report employees’ income and deductions on appropriate T4 or T4a slip)

OPENING A PAYROLL ACCOUNT

As an employer, you must have a payroll program account to remit your deductions:

  • First, you need to register for a Business Number (BN) by internet, by phone, or by mail/fax);
  • Once registered, you will receive a letter from the CRA confirming the following: your Business Number (BN), the accounts registered, and a summary of the information provided by you.

 

You must open a payroll account before the 15th day of the following month after the date on which you start withholding payroll deductions from your employee(s).

WHEN HIRING AN EMPLOYEE

When hiring employees, the following should be obtained.

  • Social Insurance number (SIN)
  • TD1 Personal Tax Credit Return completed by the employee

 

These documents and the relevant information should be kept in your records. It is a serious offence to knowingly accept a TD1 that contains false or deceptive statements. If the employee works for you and you cannot get the above, you are still responsible to start calculating and withholding payroll deductions.

CALCULATING & REMITTING DEDUCTIONS

CRA has developed an online tool, the Payroll Deductions Online Calculator (PDOC) for businesses to calculate their payroll deductions.

As an employer, you must remit the CPP contributions, the EI premiums, and income tax deducted from your employees’ income, along with your share of contribution. Your remittance due date is the 15th day of the following month after the date on which you withheld the payroll deductions.

  • Canada Pension Plan (CPP)– Employers contribute the same amount of CPP that is deducted from the employeeClick here for CPP contribution rates, maximums, and exemptions.
  • Employment Insurance (EI)– You have to deduct EI premium s from your employee(s), and you must pay 4 times the amount of the employees’ premium. There is no age limit for deducting EI premiums. Click here for EI premium rates and maximums. 

 

Note that Quebec employers deduct Quebec Pension Plan (QPP) contributions instead of CPP contributions. For information, see Revenu Québec.

FILING INFORMATION RETURNS

Employer information returns consist of both slip(s) and a summary. Depending on the type of income you pay, you may have to file one or more types of returns (see CRA page for more information).

  • Most employers will need to file a T4 slip for the year during which remuneration was paid.
  • The T4 SummarySummary of Remuneration Paid, reports the totals of the amounts reported on the related T4 slips.

 

All summaries and slips are due on or before the last day of February following the calendar year to which they apply.

Note: If you file more than 50 slips, you must electronically file the information.

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