Ontario Gig Workers: $15 Minimum Wage and Other “Employee-Like” Rules Coming Soon
The Ontario government plans to require “gig economy” companies, which includes on-demand Uber drivers, to pay workers the provincial $15-per-hour minimum wage and comply with other requirements associated with hiring employees. This move is part of a series of worker-friendly legislation which the government in Canada’s largest province has introduced in recent months. It is not yet clear whether other Canadian provincial and territorial rules will adopt comparable rules.
While specifics of the changes have not yet been passed into law, Ontario Premier Doug Ford and Labour Minister Monte McNaughton are advocating what has been described as “foundational” legislation in the form of a Working for Workers Act, 2022 (being the 2022 version of a law of the same name from 2021 which made other worker-friendly changes). This early 2022 legislation would be distinct from Ontario’s current Employment Standards Act (ESA). The new Act would not address employment status, and instead gig workers would be afforded certain rights for performing work on or via a digital platform. In other words, the classification question (employee vs. contractor) is essentially disregarded, and the company has a set of obligations for any worker who is covered by the new rules.
In a marked change from their prior “Open for Business” messaging and a past decision to delay a scheduled minimum wage increase, Minister McNaughton has explained the rationale for the new rules as follows: “My message to companies is simple: If you want to do business here, you need to play by our rules.”
The new protections would entitle workers to the provincial $15-per-hour minimum wage for their “active time”, which is understood to be the time when they are actually performing work. Any time when workers are either on call or waiting to be dispatched would not be covered.
The new rules also include administrative provisions which are comparable to some protections which the ESA provides to employees. This includes a prohibition which would prevent companies from withholding tips from workers, meaning that any fee for work including tips becomes more closely aligned with the legal treatment of wages.
Platform economy companies will also be subject to a new requirement to provide workers with information about how app-based services calculate the amounts paid to workers. This is the sort of transparency which the ESA currently provides for employees through wage statements and employee information obligations.
This round of rules would also force companies to have a “recurring pay period”, which means that a pay cycle and established pay days are required. This invariably means that the working relationship starts to become more normalized and predictable.
There would also be a new due process requirement, which would mandate that workers be provided with written notice, including reasons, if they are being removed from the platform. Workers would also have protections against reprisals which are similar to the current ESA rules. This obviously means that there is at least the potential for contested terminations of “not quite independent” contractors.
Any disputes involving gig workers would also have to be settled in Ontario as opposed to another jurisdiction. This change addresses a specific issue which was the subject of lengthy litigation in a prior case, which attempted to have worker issues dealt with via mandatory arbitration outside of Canada.
The Ontario government has also, in parallel, been working on an arrangement which would provide portable employee benefits to gig economy workers.
Some of the concepts set out in these new rules have been supported by key platform economy companies, including Uber. The government has, however, been clear that its minimum rules are being implemented to ensure that legislated minimums are consistently applied.
Takeaways for Companies
The stated rationale for these changes includes “Ontario’s ambitious plan to attract the best workers from across Canada”. It’s not entirely clear what process the provincial government followed in order to connect this purported ambition with the specific rules which are being introduced. That is especially the case since a previous advisory committee had made recommendations which included mandating the use of the “dependent contractor” status for gig workers. Many commentators have noted that Ontario faces a provincial election this summer. That may, however, be too simplistic of an explanation – Uber have been supportive of legislative changes, including minimum wages and worker payments, and the introduction of benefits for workers. So these changes may not be “straight politics” and could actually involve a genuine effort to resolve a range of issues which have occupied much legal time and resources over the past decade or so.