[Canada] Ontario employers failed to pay $9m wages

According to data from the Ontario Ministry of Finance, the amount of workers’ wages employers failed to pay back in the 2021-22 fiscal year was roughly $9 million, HR Reporter reports.

The data was made public following freedom of information (FOI) requests for the specific data from Toronto-based Downtown Legal Services and Parkdale Community Legal Services, according to a CBC report.

The data reportedly revealed a steep decline in the number of prosecutions for non-compliance with the Ontario Ministry of Finance's orders to pay. 

The total fell from 79 prosecutions in 2017-18 to just 12 prosecutions in 2021-22, according to the report from the Naujawan Support Network (NSN) - an Ontario-based group of immigrants fighting wage theft - and there were only two prosecutions in 2020-21.

Employer non-compliance

In a June letter to the Ministry of Labour from NSN, the group stated that the problem is employers do not believe there will be repercussions for their non-compliance.

The letter read, "They regard the ministry as weak and ineffective - an institution that cannot enforce the orders it issues, and that will not prosecute employers who ignore the orders," according to the CBC report.

In June, the Royal Canadian Mounted Police (RCMP) reportedly searched multiple Southwestern Ontario homes and businesses and found 31 alleged victims of criminal exploitation. 

The workers were recruited from overseas, paid substandard wages and housed in poor conditions.

Anmol Sanotra - an NSN member - claimed that it is not only members of minority groups who are going unpaid.

"Interestingly, we have been contacted by everyone – not just international students or work permit holders, but even by citizens," he said.

The Ontario government recently announced that it will be requiring temporary help agencies (THAs) and recruiters to have a licence to operate in the province from January 1, 2024, with the intention to better protect vulnerable and temporary workers. 

THAs will reportedly be required to pay $25,000 in the form of an irrevocable letter of credit that can be used to repay wages owed to employees.

From 2014 to 2021 the number of investigations into employment standards completed by the ministry dropped by roughly 50 per cent, according to NSN.

In June, the ministry told NSN that it was aware of unpaid wages being an issue, however, it did not offer specifics about how the problem was being addressed, according to Sanotra.

"It's their job to investigate and plug those loopholes that are being exploited by the employers."

The Ministry of Labour has, however, recovered more than $110 million in wages and other money owed to employees over the last five fiscal years, it said in an email to CBC.

"Employees are entitled to be paid for the work that they do and we investigate any and every claim for unpaid wages," the ministry said.

One reason for the declining numbers of completed investigations, and therefore the number of prosecutions, is that it received a historically low number of claims during the pandemic, it reportedly said.

The British Columbia Employment Standards Tribunal recently ruled that an employer was liable for two-and-a-half years of unpaid wages as a result of the improper deduction of business expenses from a worker’s commission rather than overall revenue.

Source: HR Reporter

(Links and quotes via original reporting)

According to data from the Ontario Ministry of Finance, the amount of workers’ wages employers failed to pay back in the 2021-22 fiscal year was roughly $9 million, HR Reporter reports.

The data was made public following freedom of information (FOI) requests for the specific data from Toronto-based Downtown Legal Services and Parkdale Community Legal Services, according to a CBC report.

The data reportedly revealed a steep decline in the number of prosecutions for non-compliance with the Ontario Ministry of Finance's orders to pay. 

The total fell from 79 prosecutions in 2017-18 to just 12 prosecutions in 2021-22, according to the report from the Naujawan Support Network (NSN) - an Ontario-based group of immigrants fighting wage theft - and there were only two prosecutions in 2020-21.

Employer non-compliance

In a June letter to the Ministry of Labour from NSN, the group stated that the problem is employers do not believe there will be repercussions for their non-compliance.

The letter read, "They regard the ministry as weak and ineffective - an institution that cannot enforce the orders it issues, and that will not prosecute employers who ignore the orders," according to the CBC report.

In June, the Royal Canadian Mounted Police (RCMP) reportedly searched multiple Southwestern Ontario homes and businesses and found 31 alleged victims of criminal exploitation. 

The workers were recruited from overseas, paid substandard wages and housed in poor conditions.

Anmol Sanotra - an NSN member - claimed that it is not only members of minority groups who are going unpaid.

"Interestingly, we have been contacted by everyone – not just international students or work permit holders, but even by citizens," he said.

The Ontario government recently announced that it will be requiring temporary help agencies (THAs) and recruiters to have a licence to operate in the province from January 1, 2024, with the intention to better protect vulnerable and temporary workers. 

THAs will reportedly be required to pay $25,000 in the form of an irrevocable letter of credit that can be used to repay wages owed to employees.

From 2014 to 2021 the number of investigations into employment standards completed by the ministry dropped by roughly 50 per cent, according to NSN.

In June, the ministry told NSN that it was aware of unpaid wages being an issue, however, it did not offer specifics about how the problem was being addressed, according to Sanotra.

"It's their job to investigate and plug those loopholes that are being exploited by the employers."

The Ministry of Labour has, however, recovered more than $110 million in wages and other money owed to employees over the last five fiscal years, it said in an email to CBC.

"Employees are entitled to be paid for the work that they do and we investigate any and every claim for unpaid wages," the ministry said.

One reason for the declining numbers of completed investigations, and therefore the number of prosecutions, is that it received a historically low number of claims during the pandemic, it reportedly said.

The British Columbia Employment Standards Tribunal recently ruled that an employer was liable for two-and-a-half years of unpaid wages as a result of the improper deduction of business expenses from a worker’s commission rather than overall revenue.

Source: HR Reporter

(Links and quotes via original reporting)