We’ve previously blogged about how employees can recover unpaid wages from employers. This issue is now back in the news as Ontario’s Ministry of Labour announced this week that it has “intensified [its] focus on additional enforcement tools, including prosecutions” of employers that owe outstanding wages.
According to the Toronto Star, over the past year there has been a 40% increase in employers facing prosecutions, with more fines than ever before for employers who have failed to pay their workers. There were 122 convictions in the past year for failures to meet employment standards, including for the refusal to comply with government orders to pay workers. In comparison, in 2015, there were only 70 such convictions, and in 2014, only 8.
An investigation undertaken by the Star earlier this year revealed that victims of wage theft have lost over $28 million over the last six years due to failure by the Ministry of Labour to collect wages owing. A study by two Ontario university professors indicated that employers in the accommodation and food services industries were the most likely to break the law.
Last July, the Ministry published its interim report on the Changing Workplaces Review, which found that Ontario faces “serious” and extensive problems with enforcement of basic employment rights.
Workers right advocates are pleased that the Ministry is moving in a new direction, but say that the ministry has a “lot of catching up to do” . Advocates are hoping that there will be very strong recommendations coming out of the final Changing Workplaces report.
We will continue to follow developments on this issue, and will provide updates as they become available. In the interim, it is helpful to consider the serious consequences that do attach to employers who fail to meet their legal obligations.
Consequences for Employers Who Owe Unpaid Wages
Consequences for employers who violate employment standards are significant.
An employer who has committed an offense under the Employment Standards Act, including failure to follow an order from the Ministry of Labour (such as an order to pay wages owing) can be prosecuted under the Provincial Offences Act.
If convicted, the employer could be fined up to $50,000, imprisoned for up to 12 months, or both. A convicted corporation can be fined up to $100,000 for a first conviction, $250,000 for a second conviction, and up to $500,000 for a third or subsequent conviction. This is in addition to paying any outstanding money owing to workers.
The Ministry can also issue tickets of $295 to employers who fail to meet their legal obligations. In 2015/2016, employers were fined more than 950 times for withholding wages from workers, again, the highest number to date.
Before you pursue any action against an employer who may owe you money, it is important to speak with a knowledgeable employment lawyer, who can clearly and thoroughly explain your options, and help you decide which may be best for you.