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The $10,000 Wage Recovery Cap Has Been Lifted

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The $10,000 Wage Recovery Cap Has Been Lifted

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Posted February 20, 2015

One of the key changes brought about by The Stronger Workplaces for a Stronger Economy Act, 2014 comes into effect today. Specifically, if an employer does not pay their employee for their work, the Ontario Ministry of Labour can now award employees for the full amount of their unpaid wages. Previously the Ministry was limited by a $10,000 cap on the amount of wages it could award to an employee for unpaid wages. The period of recovery for those unpaid wages has also been increased to two years.

While one may wonder why an employee would keep working if they were not getting paid, the situation can often be less straightforward. Alternative employment options are not always plentiful. An employer might promise an employee that they will be paid as soon as some funding comes through or payment on a big project is received. An employer may also make partial payments so that the employee is not without any income but, over time, the amounts can add up to well over $10,000 in unpaid wages.

One of the reasons behind these changes are to allow employees to bring a claim for the full amount of any unpaid pages without having to pursue their employers in the Courts.

The Act has brought into other changes with more to come including:

  • On May 20, 2015 employers will be required to provide their employees with copies of the most recent Employment Standards Act poster within 30 days of the day the employee becomes an employee.
  • On October 1 of every year starting in 2015 the minimum wage will be adjusted in accordance with the Consumer Price Index.

We will provide more information about these new changes and what they mean for employees and employers alike in the days and weeks to come.

You can also access the Act by going here.

This blog post was written by Colleen Hoey, a Partner in the Employment team.  She can be reached at 613-369-0366 or at Colleen.Hoey@mannlawyers.com.

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