A Ministry of Labour (“Ministry”) inspection is never a pleasant experience for employers. Ministry inspectors have very broad powers to enter the workplace and inspect company documents to ensure compliance with the Employment Standards Act, 2000 (“ESA”) or the Occupational Health and Safety Act (“OHSA”). Sometimes these inspections are random. Sometimes they are initiated by an employee/union complaint. Most of the time, an employer is not aware or ready for an inspection.
Even though the Ministry has these powers, sometimes even a management lawyer has to give them credit. I say this because recently the Ministry of Labour has been quite transparent about its compliance/enforcement activities and the types of issues and sectors of the economy to be targeted for inspection. The Ministry calls these targeted inspections “blitzes” and publishes inspection activities on its website.
From October 2013 to December 2013 the Ministry targeted the retail sector. That “blitz” was discussed in this post in which I pointed out 5 common ESA violations (usually unknowingly) committed by retailers. The results of the Ministry retail “blitz” have recently been published here. Retailers, and indeed all employers, should take note of the findings:
- 118 inspections were completed by the Ministry.
- Only 24 employers were fully compliant.
- 256 Ministry orders were made.
- The Ministry “recovered” $240,000 from retail employers on behalf of employees.
- Public holiday pay was the most common monetary violation (note: I am sorry to say that this validates my previous post listing holiday pay as a difficult compliance issue for retailers).
- Record keeping and failing to have certain agreements with employees (e.g. vacation pay on each cheque and excess hours of work) was the most common non-monetary violation.
The results of the “blitz” are important. Approximately 80% of retailers were found to have violated the ESA and almost a quarter million was recovered.
The Government and the Ministry have been focused recently on younger workers and part-time labour (and many young and part-time workers are employed in the retail sector). The Ministry has been transparent with its activities by, essentially, warning industry that it will be targeted and even disclosing what employment standards will be audited. Accordingly, the Ministry may have less sympathy for employers who are not fully compliant.
Accordingly, ESA compliance needs to be something that is top of mind for retail employers.
As many retailers have head operations in the U.S. – with HR and senior management also in the U.S. – there is the potential for ESA issues to be overlooked. Someone from human resources or senior management should have specific responsibility for ESA compliance and consistent policies should be applied at all stores. Retailers should also consider a human resources audit to determine risk. These issues should not be left to individual store managers. It is important to be proactive.
Taking these steps will ensure that when the Ministry comes knocking, it won’t find anything!