Wage theft—the failure to pay employees on time or in full—is a pervasive issue in Ontario, affecting thousands of workers annually. Under the Employment Standards Act, 2000 (ESA), employers are legally obligated to pay wages promptly and accurately. Yet, delayed payments, unpaid overtime, and illegal deductions remain widespread. This blog explains your rights, outlines actionable steps to resolve wage theft, and highlights recent enforcement measures to protect workers.

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What Constitutes Wage Theft?

Wage theft occurs when employers violate payment obligations under the ESA. Key violations include:

1. Late or Missing Payments: Employers must pay wages no later than the regular pay day for each pay period. This includes salaries, commissions, overtime, and vacation pay.
2. Unauthorized Deductions: Only three types of deductions are permitted:
   
   • Statutory (e.g., taxes, CPP).
   • Court-ordered (e.g., child support).
   • Written employee authorization (specific to agreed purposes, like union dues).
     Example: Deducting wages for a customer’s “dine and dash” is illegal unless the employee had sole control over the cash.
3. Unpaid Overtime: Employees must receive 1.5× regular pay for hours over 44/week (with exceptions for managers and professionals).
4. Failure to Provide Wage Statements: Employers must issue detailed statements listing hours, rates, deductions, and net pay.

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Employer Obligations Under the ESA

• Pay Periods: Employers must establish regular pay periods (e.g., weekly, biweekly) and adhere to fixed pay dates. “Floating” pay days that delay payments violate the ESA.
• Termination Payouts: Upon termination, all unpaid wages (including vacation pay) must be issued within 7 days or the next regular payday, whichever is later.
• Direct Deposit Rules: As of June 2024, employees must choose their deposit account. Employers cannot mandate specific banks.

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Steps to Resolve Unpaid Wages

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1. Document Everything

• Save pay stubs, schedules, and communications. Track unpaid hours and discrepancies in wage statements.

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2. Confront Your Employer

• Politely request payment in writing.
• Escalate to HR if necessary.

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3. File a Claim with the Ministry of Labour

• Submit a claim online or via PDF form within 2 years of the violation 1.
• The Ministry investigates and can issue:
  
  • Compliance Orders: Requiring employers to pay owed wages.
  • Fines: Up to $500,000 for repeat offenders.
• Note: Federally regulated employees (e.g., banks, airlines) must file with the Federal Labour Program.

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4. Pursue Legal Action

• If the Ministry’s order is ignored, employees can sue for unpaid wages + interest under common law, which often exceeds ESA minimums.
• Class actions are viable for systemic violations.

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Employer Penalties for Wage Theft

The ESA imposes strict penalties to deter violations:

• Fines: Up to 100,000 for individuals and 500,000 for corporations (third offenses).
• Prosecutions: Over 1,825 ESA prosecutions since 2004, with 122 convictions in 2016 alone.
• Licensing Requirements: As of 2024, temp agencies must post $25,000 bonds to operate, ensuring wage recovery.

Despite these measures, Ontario employers owed workers $60 million in unpaid wages as of 2024, highlighting systemic enforcement gaps.

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Recent Government Measures

To combat wage theft, Ontario has:

1. Increased Fines: Maximum fines for individuals doubled to $100,000 in 2023.
2. Enhanced Enforcement: Conducted 1,025 inspections in 2024, targeting high-risk sectors like trucking and hospitality.
3. Licensing for Temp Agencies: Mandatory licenses and bonds for 2,300 agencies to protect vulnerable workers.

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Key Takeaways

• Act Quickly: File a claim within 2 years to avoid losing entitlements.
• Leverage Legal Tools: Ministry orders, lawsuits, and class actions amplify pressure on non-compliant employers.
• Know Your Rights: Even undocumented workers are protected under the ESA

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Free Consultation with London Employment Lawyers

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Ontario’s laws provide critical protections for employees during mass layoffs, ensuring they receive fair notice, severance pay, and support. If you’re affected by a group termination, understanding your rights and seeking professional advice can help you navigate this challenging time and secure the compensation you deserve. Please do not hesitate to contact our experienced Ottawa employment lawyers for a free legal consultation. Randy Ai Law Office can be contacted at (548) 489-2006 or fill out the contact form.