Bill 6 2007
An Act to amend the Employment Standards Act, 2000 to provide for an Employee Wage Security Program
Note: This Act amends the Employment Standards Act, 2000. For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History on www.e-Laws.gov.on.ca.
Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
1. The Employment Standards Act, 2000 is amended by adding the following Part:
employee wage Security program
Establishment of Program
67.1 (1) The Employee Wage Security Program is hereby established.
(2) The Lieutenant Governor in Council shall appoint a person to administer the Program.
Delegation of authority
(3) The Program Administrator may delegate any of his or her powers and duties to a person employed at the Ministry.
(4) The Program Administrator, in the name of his or her office, may bring any proceeding he or she considers necessary in relation to the Program and he or she may respond to any proceeding in that name.
Testimony in civil proceedings
(5) The Program Administrator and any person employed at the Ministry to whom his or her powers and duties have been delegated shall not be required to testify in a civil proceeding or in a proceeding before any other tribunal respecting information obtained in the discharge of the Program Administrator's duties under this Act.
Compensation from the Program
67.2 (1) The wages for which an employee may receive compensation from the Program are,
(a) regular wages;
(b) overtime wages, vacation pay and holiday pay;
(c) termination pay and severance pay;
(d) amounts that are deemed to be unpaid wages under subsection 42 (5);
(e) wages that an employment standards officer has found an employer owes the employee;
(f) compensation ordered by an employment standards officer under section 104; and
(g) such additional payments as may be prescribed.
(2) Where the terms of a contractual agreement between an employer and an employee or his or her agent provide for wages or pay of the kinds mentioned in clause (1) (b) in an amount greater than the amount that would be required under this Act and the regulations, the employee may be compensated from the Program for the greater amount.
Eligibility for compensation
67.3 (1) An employee is eligible for compensation from the Program if,
(a) in the case of an employer that is insolvent, the employee has filed a claim for unpaid wages with the employer's trustee in bankruptcy or court-appointed receiver;
(b) an employment standards officer has made an order that the employer is liable for wages owed to an employee;
(c) an employment standards officer has made an order under Part XX that a director of the employer is liable for wages owed to the employee; or
(d) the Board has made, amended or affirmed an order that wages or compensation are owed to the employee.
(2) For purposes of this Act, any claim described in clause (1) (a) that has been verified by the Program Administrator is deemed to be an order.
Limits on Compensation
Compensation for partial wages
67.4 If an employee has been paid wages pursuant to an order and the employee is still owed wages under the order, the employee is eligible for compensation from the Program for the balance of wages owed.
67.5 (1) Employees who are entitled to the protection of a lien under the Construction Lien Act are only eligible for compensation from the Program if they have used their best efforts to preserve their lien claim.
(2) If the Program Administrator is satisfied that such employees could not get sufficient information to preserve their rights, were unable to preserve them or were unaware of their rights, he or she may allow the employees to be compensated from the Program in the same manner as any other employee.
(3) If an employee who is entitled to the protection of a lien is compensated by the Program, the Program Administrator may require the employee to subrogate his or her rights in the lien to the Program Administrator, or may require the employee to assign any judgment arising from the lien claim to the Program Administrator.
Settlement of severance pay
67.6 (1) If a trade union has entered into a settlement agreement with an employer over severance pay under section 6, and the employer has paid the severance pay agreed to, an employee is not eligible for compensation for severance pay from the Program.
(2) Despite subsection (1), an employee is eligible for compensation for severance pay from the Program if an employment standards officer has made an order under clause 103 (1) (b) with respect to the severance pay and it has not been paid and the employer has not applied to have the order reviewed.
Settlement of wages
67.7 (1) An employee who has entered into a settlement under section 112 in respect of wages and who has received the amount agreed upon is not eligible for compensation from the Program for the wages that were the subject of the settlement.
(2) Despite subsection (1), an employee is eligible for compensation from the Program for the wages that were the subject of the settlement if an employment standards officer has made an order under clause 103 (1) (b) with respect to those wages and they have not been paid and the employer has not applied to have the order reviewed.
Administration of the Program
Administrator may approve compensation
67.8 (1) The Program Administrator may, at any time on or after the day wages are due and owing, approve compensation for an eligible employee from the Program in accordance with the entitlements and limitations set out in sections 67.4 to 67.7.
(2) On approving compensation for the employee, the Program Administrator shall apportion the compensation in such manner as may be prescribed among the types of wages described in subsection 67.2 (1).
(3) On approving compensation for the employee, the Program Administrator shall deduct from the compensation such amounts as are required to be deducted by a law of Canada or of Ontario.
No compensation when order under review
67.9 (1) If an employer has applied under section 116 to have an order referred to in clause 67.3 (1) (b) or (c) reviewed by the Board, the Program Administrator may approve compensation in respect of the order only if the Board finds that the employer is liable to pay the wages in question and amends or affirms the order accordingly.
Exception – interim order during review
(2) If, during a review, the Board finds that a specified amount of wages or compensation is owing or there is no dispute that a specified amount of wages or compensation is owing and affirms or issues an interim order to the extent of the specified amount, the Program Administrator may approve compensation from the Program in the amount of the interim order.
Recovery of overpayments
67.10 (1) If the amount for which an employee is compensated from the Program exceeds the wages to which the employee was entitled, the Program Administrator, on the basis of the prescribed criteria, may seek repayment of the excess amount from the employee.
Calculation of excess
(2) For the purposes of this section, the excess amount is the amount the Program has recovered up to the amount owed under the order less the compensation already received by the employee.
Subrogate to Program
67.11 (1) The Program Administrator is subrogated to all the rights of an employee who is compensated by the Program and may bring an action against the employer, or any other person who is liable, for wages and administration costs as determined under subsection 103 (2) or may use the provisions of this Act to collect the amount.
Assignment of judgment
(2) The Program Administrator may accept an assignment of a judgment obtained by an employee in respect of wages as described in subsection 67.2 (1) and the Administrator may exercise the rights of the employee under the judgment.
67.12 Where money may be received by an employee under this Part, or may be collected from a person who is liable to pay, interest may be collected at a rate determined by the Program Administrator.
Agreements with federal government
67.13 The Minister, with the approval of the Lieutenant Governor in Council, may enter into agreements with the Government of Canada related to the payment of compensation under this Part and the administration of compensation if employees are entitled to compensation for wages under an Act of the Parliament of Canada.
Compensation not assignable
67.14 No amount payable as compensation under this Part is capable of being assigned except by order or judgment of a competent tribunal under the Family Law Act or by a domestic contract within the meaning of Part IV of that Act.
67.15 (1) The Program Administrator shall maintain a fund to pay compensation for which employees are eligible under the Program and may charge employers premiums for that purpose.
Sufficiency of fund
(2) The Program Administrator has a duty to maintain the fund so that it is sufficient to make the required payments under the Program.
Direction re sufficiency of fund
(3) If the Lieutenant Governor in Council is of the opinion that the fund is not sufficient to meet the standard described in subsection (2), the Lieutenant Governor in Council may direct the Program Administrator to increase employers' premiums to the extent that the Lieutenant Governor in Council considers necessary to ensure that the fund meets the standard.
Employers and their Obligations
67.16 (1) Every employer shall register with the Program Administrator,
(a) within 10 days of the day this Part comes into force; or
(b) within 10 days of becoming an employer.
Information re wages
(2) When registering, an employer shall give the Program Administrator a statement setting out the total estimated wages that employees are expected to earn during the current year.
(3) When registering and at such other times as the Program Administrator may require, an employer shall give the Administrator such information as he or she may request.
Notice of change of status
67.17 (1) An employer who ceases to be an employer shall notify the Program Administrator of the change within 10 days after it occurs.
Information re wages
(2) The notice from a former employer must be accompanied by a statement of the total wages earned during the year by all employees up to the date of the change.
(3) A former employer shall promptly pay the premiums for which the employer is liable up to the date of the change.
Material change in circumstances
67.18 An employer shall notify the Program Administrator of a material change in circumstances in connection with the employer's obligations under this Part within 10 days after the material change occurs.
67.19 (1) Every year on or before the date specified by the Program Administrator, an employer shall give the Administrator a statement setting out the total wages earned during the preceding year by all employees and such other information as the Administrator may request.
(2) Upon the request of the Administrator, the statement must also set out the total estimated wages that employees are expected to earn during the current year.
(3) The Program Administrator may require an employer to submit a statement at any time setting out the information described in subsection (1) or (2) with respect to such other periods of time as the Administrator may specify.
(4) The Program Administrator may require an employer to submit separate statements with respect to different branches of the employer's business or, if the employer carries on business in more than one class of industry, with respect to the different classes.
Administrator determination of premiums
(5) If an employer does not submit a statement to the Program Administrator, the Administrator may determine the amount of premiums that should have been paid by the employer, and if it is later ascertained that the amount of the premium determined by the Administrator is less than the actual amount of the premium that should have been paid based on the wages of the employer's employees, the employer is liable to pay to the Administrator the difference between the amount fixed by the Administrator and the actual amount owing by the employer.
Effect of non-compliance
(6) The Program Administrator may require an employer who fails to submit a statement, or who fails to do so by the date specified by the Administrator, to pay,
(a) interest at a rate determined by the Administrator on the employer's premiums for the period to which the statement relates; or
(b) an additional percentage as determined by the Administrator of the employer's premiums for that period.
(7) If an employer underestimates the amount of the total wages required to be reported in a statement, the Program Administrator may require the employer to pay interest as described in clause (6) (a) or an additional percentage as described in clause (6) (b).
(8) A payment required under subsection (6) or (7) is in addition to any penalty imposed by a court for,
(a) a contravention of this Act; or
(b) failure to comply with a requirement made by the Program Administrator under this Act.
67.20 The information in a statement given to the Program Administrator under section 67.16, 67.17 or 67.19 must be certified to be accurate by the employer or the manager of the employer's business or, if the employer is a corporation, by an officer of the corporation who has personal knowledge of the matters to which the statement relates.
67.21 (1) An employer shall keep accurate records of all wages paid to the employer's employees and shall keep the records in Ontario.
(2) The employer shall produce the records referred to in subsection (1) when the Program Administrator requires the employer to do so.
Calculating Payments by Employers
Premiums, all employers
67.22 (1) The Program Administrator shall determine the total amount of the premiums to be paid by all employers with respect to each year in order to maintain the Program fund under this Act.
Apportionment among classes, etc.
(2) The Program Administrator shall apportion the total amount of the premiums among the classes, subclasses and groups of employers and shall take into account the extent to which each class, subclass or group is responsible for payments made out of the Program.
(3) The Program Administrator shall establish rates to be used to calculate the premiums to be paid by employers in the classes, subclasses or groups for each year.
(4) The Program Administrator may establish different premium rates for a class, subclass or group of employers in relation to the risk of the class, subclass or group.
Method of determining premiums
(5) The Program Administrator shall establish the method to be used by employers to calculate their premiums.
Bases for calculation
(6) The Program Administrator may establish different payment schedules for different employers for premiums to be paid in a year based on such factors as the Administrator considers appropriate.
Adjustments in premiums for particular employers
67.23 The Program Administrator may increase or decrease the premiums otherwise payable by a particular employer in such circumstances as the Administrator considers appropriate, including but not limited to the following:
1. In the opinion of the Administrator, the past practice of the employer indicates that the employer is unlikely to comply with an order to pay wages under this Act.
2. In the opinion of the Administrator, the employer's record of compliance with this Act and any orders or regulations made under it has been consistently good and indicates that the employer is likely to comply with an order to pay wages under this Act.
3. If the frequency of claims for unpaid wages among the employer's employees is consistently higher than that of the average in the industry in which the employer is engaged.
Notice to employers
67.24 (1) Each year, the Program Administrator shall notify each employer of the method to be used to calculate the employer's premiums, the premium rate and the payment schedule.
Liability if no notice
(2) If for any reason an employer does not receive a notice for a year, the employer is liable to pay the amount that the employer would have been required to pay had the notice been given or received.
Payment Obligations of Employers
Payment of premiums
67.25 (1) Every employer shall calculate and pay premiums to the Program Administrator in accordance with the notice given under section 67.24.
Error in calculation
(2) If the Program Administrator considers that an employer has incorrectly calculated the amount of the premiums payable and, as a result, has paid an insufficient amount, the Administrator may,
(a) require the employer to pay additional premiums in an amount sufficient to rectify the error; and
(b) fix the amount of the additional premiums to be paid.
Penalty for error
(3) If an employer has incorrectly calculated the amount of premiums payable for a year and, as a result, has paid an insufficient amount, the employer shall pay additional premiums in an amount sufficient to rectify the error and, as a penalty, shall pay that amount again to the Program Administrator.
(4) The Program Administrator may relieve the employer from paying all or part of the penalty if the Administrator is satisfied that the incorrect calculation was not intentional and that the employer honestly desired to pay the correct amount.
Default in paying premiums
67.26 An employer who does not pay premiums when they become due shall pay to the Program Administrator such additional percentage on the outstanding balance as the Administrator may require.
67.27 If the Program Administrator recovers or receives amounts other than premiums in connection with the administration of the Program, he or she shall pay those amounts into the Program fund.
Non-application of Statutory Powers Procedure Act
67.28 The Statutory Powers Procedure Act does not apply to the exercise of any power conferred on the Program Administrator under this Part.
2. Section 141 of the Act is amended by adding the following subsection:
Regulations re Part XV.1
(2.5) The Lieutenant Governor in Council may make regulations,
(a) prescribing classes, subclasses or groups of employers for the purposes of the Employee Wage Security Program;
(b) prescribing additional payments under clause 67.2 (1) (g) that are wages for the purposes of section 67.2;
(c) providing for the manner of apportioning compensation under subsection 67.8 (2);
(d) prescribing criteria for seeking repayment for excess compensation for the purposes of section 67.10.
3. Section 142 of the Act is amended by adding the following subsection:
(1.1) For greater certainty, the Employee Wage Security Program established under Part XV.1 only applies with respect to wages that become due and owing on and after the day Part XV.1 comes into force.
4. This Act comes into force six months after the day it receives Royal Assent.
5. The short title of this Act is the Employment Standards Amendment Act (Wage Security), 2007.
The Bill amends the Employment Standards Act, 2000 by adding Part XV.1, which establishes the Employee Wage Security Program and provides for the appointment of a Program Administrator. Under the Program, employees will be eligible for compensation for certain types of unpaid wages.
New sections 67.3 to 67.7 set out the eligibility and limiting criteria for receiving compensation which the Program Administrator must use in approving compensation under section 67.8. The Program Administrator is granted certain powers, such as the right to recover overpayments made to employees and to collect interest on compensation that is payable under the Program. In addition, the Program Administrator assumes the rights to the unpaid wages of an employee who receives compensation under the Program.
A new section 67.15 directs the Program Administrator to establish and maintain a Program fund to pay compensation to eligible employees and empowers him or her to charge employers premiums to maintain the fund.
New sections 67.16 to 67.21 set out the obligations of employers under the Program. Employers must register with the Program Administrator and provide various statements relating to total wages that the employer has paid or estimates it will pay in a given year or other time period specified by the Program Administrator. The accuracy of the statements of wages must be certified by an employer. Employers must maintain accurate records of all wages paid. If an employer does not provide a required statement of wages, the employer may be required to pay a penalty.
Under new sections 67.22 to 67.24, the Program Administrator must determine the amount of premiums that are required to maintain the Program fund and is empowered to establish premium rates, which may vary according to the employer's class, subclass or group, and the method by which employers must calculate their total premiums owed. The Program Administrator may adjust the premiums otherwise payable by a particular employer in certain circumstances.
A new section 67.25 requires employers to pay the proper premium to the Program Administrator. If an employer incorrectly calculates the amount of premiums owed and thus pays an insufficient amount, the employer must pay additional premiums to satisfy the difference and may have to pay a penalty. Under a new section 67.26, an employer who does not pay premiums when they are due may be required to pay a penalty determined by the Program Administrator.
Under a new section 67.27, any amount other than premiums that the Program Administrator recovers or receives must be paid into the Program fund. Under a new section 67.28, the exercise of power conferred on the Program Administrator under Part XV.1 is not subject to the Statutory Powers Procedure Act.
The Lieutenant Governor in Council may make regulations concerning the Program under new subsection 141 (2.5).