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Following feedback and discussion with stakeholders, the Ontario Government has announced that it will, at least temporarily, revoke a controversial change to the public holiday pay formula recently introduced by The Fair Workplaces, Better Jobs Act, 2017. The change, set to take effect on July 1, 2018 is welcome news to employers who have voiced concerns about the impact of changes to the public holiday pay calculation on their bottom line.

The Fair Workplaces, Better Jobs Act

On November 27, 2017, the Fair Workplaces, Better Jobs Act, 2017 (“the Act”) was introduced into law, bringing with it significant changes to Ontario’s Employment Standards Act, 2000.

One of the most controversial changes ushered in by the Act was the introduction of a new public holiday pay formula which sought to guarantee a day’s pay to employees on a public holiday so long as they worked within the pay period preceding the holiday. While the change had a positive effect on part-time and casual employees, it was criticized by employers as costly and confusing.

Public Holiday Prior to the Changes

Prior to the change introduced by the Act, public holiday pay was, in most cases, calculated by taking the total amount of regular wages earned and vacation pay payable to an employee in the four work weeks prior to the work week in which the public holiday occurred, divided by 20. Under the Act this formula was altered to taking the total amount of regular wages earned in the pay period immediately preceding the public holiday, divided by the number of days an employee worked in that period.

What is Happening Now?

On May 7, 2018 the Ministry of Labour announced that the province will conduct a review of the new public holiday pay system under the Act following discussions with stakeholders. Until a new formula is enacted the government is enacting Ontario Regulation 375/18.

Under Ontario Regulation 375/18 the law will revert to the prior calculation for public holiday pay in Ontario for provincially regulated employees for an interim period starting on July 1, 2018. It is expected that Ontario Regulation 375/18 will be revoked on December 31, 2019 and replaced with new legislation following the Ontario Government’s review of the public holiday system and discussions with key stakeholders.

While we wait for this review to take place, employers should welcome the temporary change which will likely reduce payroll costs and offset other implications of the Act.

Sultan Lawyers PC will continue to keep its clients informed of any further developments. If you have any questions about the new regulation and its impact on the workplace, please contact Kristine Gorman by here.