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Is Your Worker Exempt from Employment Requirements Laws?


On January 1, 2023, an modification to the Ontario Employment Requirements Act, 2000 (“ESA”) got here into power that creates a brand new exemption for enterprise and knowledge expertise (IT) consultants.[1] Which means if a person meets the standards for a “enterprise guide” or “data expertise guide” below the ESA, then the guide is excluded from the appliance of the ESA. If that’s the case, then the employer doesn’t should adjust to the minimal employment requirements set out within the ESA with respect to the guide.

Employers ought to think about whether or not this new exemption applies to any people of their Ontario workforce. As well as, it is usually an excellent reminder for employers to think about whether or not they’re updated on key exemptions from employment requirements laws in all the provinces and territories wherein their enterprise operates, because the exemptions do range by province and territory.

What’s the “Enterprise Marketing consultant” or “Data Know-how Marketing consultant” Exemption?

These two phrases are actually outlined within the ESA as follows:

  • “Enterprise guide” means “a person who gives recommendation or companies to a enterprise or group in respect of its efficiency, together with recommendation or companies in respect of the operations, profitability, administration, construction, processes, funds, accounting, procurements, human sources, environmental impacts, advertising, threat administration, compliance or technique of the enterprise or group.”

  • Data expertise guide” means “a person who gives recommendation or companies to a enterprise or group in respect of its data expertise techniques, together with recommendation about or companies in respect of planning, designing, analyzing, documenting, configuring, growing, testing and putting in the enterprise’s or group’s data expertise techniques.”

To ensure that a enterprise or IT guide to be exempt from the ESA, all the following standards have to be met:

1. the guide have to be offering their companies by a enterprise. Particularly, by both of the next:

    1. a company of which the person is both a director or a shareholder who’s celebration to a unanimous shareholder settlement; or
    2. a sole proprietorship of which the person is the only proprietor, if the companies are supplied below a enterprise identify of the only proprietorship that’s registered below the Enterprise Names Act;

2. the events will need to have entered right into a written settlement that addresses when, and the way a lot, the guide will probably be paid. The pay have to be set out as an hourly charge and be no less than $60 per hour (excluding bonuses, commissions, bills, travelling allowances, and advantages); and

3. the guide have to be paid on the time, and for the quantity, specified within the written settlement.

In gentle of this definition, this exemption goes to be most related for companies who rent most of these staff as consultants or unbiased contractors.[2]

The employment requirements exemptions that Ontario employers are accustomed to are a lot narrower exemptions that exempt sure professions or classes of workers from restricted elements of the ESA solely (e.g. hours of labor and time beyond regulation).[3] Compared, this new exemption is way broader. If it applies, the guide is fully exempt from the ESA, together with minimal requirements regarding hours of labor and time beyond regulation, trip and public vacation pay, statutory leaves of absence, and statutory termination pay and statutory severance pay. Word that whereas the statutory termination provisions within the ESA is not going to apply, the person should be entitled to frequent regulation affordable discover of termination. Consequently, it is very important be sure that agreements with enterprise and IT consultants are fastidiously drafted and tackle key phrases like termination of employment.

What About Different Provinces and Territories?

To date, Ontario is the one province in Canada with this enterprise or IT guide exemption.

IT professionals are already exempt from elements of employment requirements laws in Ontario and different Canadian provinces. For instance, “data expertise professionals” in Ontario are exempt from the hours of labor, consuming interval and time beyond regulation pay provisions within the ESA.[4] In British Columbia, a “excessive expertise skilled” is exempt from virtually all the minimal requirements regarding hours of labor and time beyond regulation, in addition to from these regarding statutory holidays.[5] In Alberta, an “data techniques skilled” is exempt from minimal requirements regarding hours of labor and time beyond regulation.[6] In Nova Scotia, “data expertise professionals” are exempt from time beyond regulation pay necessities.[7] Whereas the definitions of IT professionals are comparable within the employment requirements laws in these provinces, they aren’t an identical.

Key Takeaways

Past the class of IT professionals, the occupations and classes of workers which can be exempt from employment requirements laws (both fully or partly) additionally range by province and territory. Simply because an worker is exempt from employment requirements laws in a single province or territory doesn’t imply that would be the case in one other Canadian province or territory. In some provinces and territories, sure professions are excluded from the laws fully whereas in different provinces and territories they’re solely excluded from sure provisions within the laws.[8] For companies with workers in a number of jurisdictions, this reinforces the significance of contemplating these statutory exemptions in every relevant province or territory.

When you’ve got any questions regarding the modification to the Ontario Employment Requirements Act or  another side of employment laws, please contact a member of our Labour, Employment & Human Rights Group

[1] Employment Requirements Act, 2000, s. 3(5), (7)-(8).

[2] A reminder that the ESA has an categorical prohibition on misclassifying workers as unbiased contractors: ON Employment Requirements Act, 2000, s. 5.1.

[3] For instance, managers are exempt from the time beyond regulation pay provisions within the ESA, and sure professionals are exempt from the hours of labor, minimal wage, public vacation and trip provisions within the ESA (When Work Deemed to be Carried out, Exemptions and Particular Guidelines, ss. 2, 8(b))

[4] When Work Deemed to be Carried out, Exemptions and Particular Guidelines, ss. 4(3)(b), 8(l)

[5] BC Employment Requirements Regulation, s. 37.8(2).

[6] AB Employment Requirements Regulation, s. 2(2)(o)

[7] NS Common Labour Requirements Code Rules, s. 2(2C)

[8] For instance, in BC sure professions and occupations, reminiscent of architects, accountants, attorneys, {and professional} engineers are fully excluded from the BC Employment Requirements Act (Employment Requirements Regulation, s. 31). Compared, in Ontario, these similar professionals are solely excluded from the elements of the ESA regarding hours of labor, consuming durations, the three hour rule, minimal wage, public holidays and holidays (When Work Deemed to be Carried out, Exemptions and Particular Guidelines, s. 2).

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