10 employment standards tips for Ontario employers, from an employment lawyer

Employment standards compliance can look straightforward on paper. But according to Ontario employment lawyer Alex Treiber, founder of Treiber Law PC, some of the most expensive mistakes employers make aren’t the obvious ones — they’re the details that quietly create liability over time.

Here are 10 practical tips for Ontario employers looking to reduce their employment law risk.

Watch the full interview with Alex Treiber

1. Treat the ESA as the starting point – not the finish line

Meeting the minimum requirements of Ontario’s Employment Standards Act (ESA) doesn’t necessarily mean you’ve met all of your legal obligations.

This is particularly important when terminating an employee. While the ESA sets minimum notice, termination pay, and statutory severance requirements, an employee may be entitled to considerably more under common law if their employment agreement doesn’t include an enforceable termination provision.

Tip: Don’t assume “ESA compliant” automatically means “legally covered”. Consider whether common law, human rights, occupational health and safety or other legal obligations also apply.

2. Check what you’re including in vacation pay calculations

One of the most expensive payroll mistakes comes from treating an employee’s base salary or hourly rate as their only “wages” when calculating vacation pay.

Depending on the compensation, wages can include other earnings such as commissions or performance bonuses. A small underpayment can become a serious liability when the same calculation is used across several employees for several years.

Tip: Audit how your payroll system calculates vacation and public holiday pay, particularly for employees receiving variable compensation.

Employment Hero Managed Payroll gives you expert payroll support to help you pay your people accurately and stay on top of compliance. 

3. Keep employment and payroll records organized  (including former employees)

An employment standards issue doesn’t necessarily disappear when an employee leaves. Treiber notes that employees generally have up to two years to file a Ministry of Labour complaint about issues like unpaid wages, vacation pay, overtime or protected leaves. That makes accurate historical records vital when responding to a complaint.

Tip: Make sure payroll records, employment agreements, policies and other employment documentation can be easily retrieved after someone leaves the business.

4. Give employees somewhere to raise concerns internally

Many ESA complaints can potentially be prevented before they reach the Ministry of Labour. Clear communication and an open-door approach can give employees an opportunity to voice concerns about pay, leave or other workplace issues internally. Employers can then investigate and, where appropriate, correct mistakes before they start to spiral.

Tip: Make sure employees know who they can approach with an employment standards concern, and ensure managers know how to respond when one is raised.

5. Don’t change remote or hybrid arrangements without checking the contract

Where someone works can become an important term of their employment. Treiber warns that requiring an employee who has been working remotely to return to the office could create a constructive dismissal risk where the employer doesn’t have the legal right to change the employee’s work location.

Tip: If flexibility over work location matters to your business, make sure your employment agreements address it before making any changes to existing arrangements.

6. Build flexibility into employment agreements from the beginning

A strong employment agreement should reflect how your business actually operates, and how it might need to operate in future. For example, an agreement can reserve appropriate flexibility around work location or other aspects of an employee’s role. Well-thought-out agreements can reduce the risk of future workplace changes.

Tip: Review employment agreements before you need to rely on them, not when a dispute has already started.

7. Provide fresh consideration when introducing a new employment agreement

You generally can’t hand an existing employee a new employment agreement, ask them to sign it and assume the new terms are enforceable. Treiber explains that employers seeking to change an existing employee’s contract need to provide “fresh consideration”; something new that the employee didn’t previously have, such as an additional benefit, signing bonus or extra vacation day.

Tip: Get advice before rolling out new employment agreements to existing employees, especially if you’re changing important terms.

8. Don’t assume calling someone a contractor makes them one

The label on the agreement doesn’t necessarily determine whether someone is an independent contractor or an employee. Courts can look at the reality of the working relationship, including factors such as control over the worker’s schedule and location, exclusivity, tools and equipment and how integrated the person is into the business.

Tip: Regularly review long-term contractor relationships. If someone works like an employee, is managed like an employee and is integrated into your organization like an employee, the contract alone may not protect you from misclassification risk.

9. Review your Ontario recruitment practices

Ontario’s evolving recruitment requirements are giving employers another reason to review how they advertise and fill roles. Treiber highlights requirements such as disclosing the use of AI during recruitment, providing appropriate pay ranges and identifying whether a posting relates to an existing vacancy.

Tip: Don’t treat these requirements as a simple job-posting checkbox. Review your wider recruitment process, including how you use AI and how you determine pay ranges.

10. Put employment compliance on the calendar

Employment law changes, and the risks facing a business can grow as its workforce grows and employees accumulate service. Treiber recommends employers have someone knowledgeable in the loop, whether that’s an HR adviser or employment lawyer, and conduct regular compliance check-ins instead of waiting until something goes wrong.

Tip: Consider an annual employment compliance review covering contracts, payroll practices, policies, contractor arrangements and recent legislative changes.

The takeaway

The biggest employment standards risks aren’t always dramatic compliance failures. They can be small gaps — an incorrect vacation pay calculation, an outdated contract or a contractor relationship that has gradually changed — that build quietly over time.

For Ontario employers, a proactive approach to compliance is much easier than fixing the problem once a complaint, investigation or claim is already underway.

Get compliant with confidence

If you want to get across your obligations under Ontario’s Employment Standards Act properly, Employment Hero’s HR Advisory team can help you get compliant with confidence.