Ontario Employment Lawyer: Differences between Ontario and U.S.

Differences between U.S. and Canadian Employment Law – Ontario Employment Lawyer Perspective

While the U.S. and Ontario share a close economic and cultural relationship, their employment laws differ significantly. Understanding these differences is important for anyone considering conducting business or career opportunities across the border. In the area of employment law, here are some major distinctions to keep in mind whether you are an employer or employee:

1. No “At-Will” Employment in Canada

U.S.: The key principle in most states allows employers to terminate employees at any time “at will” without cause and without providing them with prior notice of termination or severance package, except in cases of discrimination or unlawful reprisal. In fact, notice of termination is generally required only if it was included in the employment contract or is company policy. As such, if a U.S. employer does not properly terminate an employee’s job, it may face a claim of :wrongful termination”.
Ontario: The concept of “at-will” employment in the province (or across Canada, for that matter). Employers can only terminate employees for “just cause” (serious misconduct), or otherwise provide reasonable notice or severance pay for termination without cause under either common law or employment contract. However, as a guaranteed legal minimum under employment standards legislation, an employer must give employees at least the statutory minimum amount of notice of termination or pay in lieu when they are dismissed “without cause”, as well as employee statutory severance pay if certain conditions are met. These amounts cannot be contracted out of and cannot be conditioned on a full and final legal release. As such, if an Ontario employer does not properly terminate an employee’s job, it may face a claim of “wrongful dismissal,” where the employee would seek a severance package, as well as other potential rights to bad faith damages, punitive damages, discrimination, and so on. Generally, most cases in wrongful dismissal litigation settle out of court.

2. Minimum Wage and Overtime Pay

U.S.: The federal minimum wage is $7.25 per hour, but many states have higher minimum wage laws. However, many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages. When it comes to overtime pay, employers must also pay employees time-and-a-half for all work exceeding 40 hours per week.
Ontario: An employee should be paid at least the Canadian federal minimum wage of $16.55. If the minimum wage of the province or territory where the employee usually works is higher than the federal minimum wage, the employer is to pay the higher minimum wage. However, the federal minimum wage applies only to employees working in a federally-regulated workplace (e.g., bank, airline, telecommunications, railway, airport, and so on). Therefore, in practice, since most employees in Canada are governed by provincial employment law, the minimum wage rule is based on a province-by-province basis. For example, the minimum wage in Ontario is currently $16.55 per hour and is subject to regular incremental increases. When it comes to overtime pay, employers must also pay employees time-and-a-half for all work exceeding 44 hours per week.

3. Notice of Termination (or Severance Packages)

U.S.: Generally, employers are not required to provide notice of termination, except in specific situations like plant closures or mass layoffs.
Ontario: The amount of notice of termination or severance package an employee receives depends on their length of service and varies depending on whether termination is with or without cause.

4. Non-Competition Agreements

U.S.: These types of restrictive covenants (whether they exist as stand-alone agreements or as a separate contract in an employment contract) are generally enforceable in most states, restricting employees from working for competitors for a certain period after leaving their jobs.
Ontario: Non-competition agreements are generally not enforceable in Ontario, except in limited circumstances involving the sale of a business or the protection of confidential information (as a result of recent employment law changes).

5. Paid Statutory (Public) Holidays and Vacation Time

U.S.: There is no federal or state statutory minimum paid vacation or paid public holidays. In reality, most U.S. employers provide their employees with some form of leave of absence, which is at their discretion. Generally, most private employers offer paid vacation (typically 10 vacation days after one year of service), as well as an average 8 public holidays per year. In addition, time off is often accrued, which means that US employees will need to be working in their job for 12 months before they’re entitled to ten days of holiday. However, some employers offer no vacation at all.
Ontario: In Ontario, employers must provide employees with at least 2 weeks of vacation time away from work during their first 5 years of service with the company, as well as at least 4% of their total income as vacation pay. Furthermore, after 5 years of service with the company, employees must be provided with at least 3 weeks of vacation time away from work, as well as at least 6% of their total income as vacation pay.

At the end of the day, employers in Canada and the U.S. should know the key differences between employment in respective employment laws before opening an office in the other jurisdiction, as minor differences in U.S. and Canadian employment can pose significant legal and financial risks. If you have questions regarding employment law in Canada, please contact a qualified employment lawyer in Ontario.

If you are an employer or employee wishing to understand your legal rights and obligations working in Canada, please call Bune Law to speak with an experienced Ontario wrongful dismissal lawyer to discuss your options and next steps on how to deal with workplace issues, call Bune Law, employment law firm in Toronto. You will review and get guidance on your severance package before you agree to sign any termination documents, and help ensure that your severance package is fair and reasonable.

Please call today to speak with an employment lawyer in Toronto about your case! Call 647-822-5492, or fill out our contact form to the side.

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Differences between U.S. and Canadian Employment Law – Ontario Employment Lawyer Perspective

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