Friday, January 31, 2014

Chinese Workers Claim Restaurant Chain Paid Them Less Than Minimum Wage

With all the discussion about the minimum wage - I'll comment about that shortly - a news story in the Star caught my eye about a group of 48 Chinese immigrants, employed by a GTA restaurant chain, making claims against the employer, in the aggregate amount of about $300,000.

Two of them claim that they haven't been paid since August at all, and most of them say that they worked at or below the minimum wage, often for more than 50 hours per week without overtime pay.

This is sadly common, particularly (though not exclusively) in certain immigrant communities.  Quite often, the employers themselves are less-than-familiar with Ontario's employment standards regime, and recent immigrant employees are very often unaware of their rights.  Even if they're aware of the minimum wage, they may not know how to pursue their rights.  They may not even realize that they're entitled to such protection.

Let's be clear on one thing:  While there are certain exemptions, and different treatments for different types of employees, basically all employees in Ontario are entitled to some sort of employment standards protections (minimum wage, overtime, hours of work, breaks, vacation pay, holiday pay...not everybody is entitled to all of it, but especially among low-wage employees, many of these protections are nearly universal).  So do not assume that you have no rights.

Fortunately, there are resources available for employees.  Some low-income employees may be eligible for assistance from a Legal Aid Clinic.  For a full listing of Community Legal Clinics in Ontario, click here.  As well, there are specialty clinics, including various clinics directed to assisting specific cultural groups.  (It appears that these employees are represented by one such specialty clinic.)

As well, the Ministry of Labour makes a lot of information, and even the complaint mechanisms, available on their web site.

Beyond that, I would encourage anyone - employers or employees - who needs help understanding their rights to contact me.

Here are a few of the oft-ignored elements of the ESA - rights which employees cannot waive:

(1)  Minimum Wage

This is the simplest one, though still not all that simple.  Right now (though it's changing), the 'general' minimum wage is $10.25 per hour.  There are certain exemptions, and certain conditions under which employees get a different minimum wage.

The exemptions to the minimum wage are, by and large, people who would reasonably expect more than minimum wage anyways.  Most professionals (such as lawyers and medical practitioners) are exempt, and the exemptions other than that are very few.

However, there are people with a different minimum wage.  For part-time students under 18 years old, it's currently $9.60.  For servers (who serve alcohol), it's $8.90.  And there are a couple of other different treatments as well, and an accounting for when 'room and board' may be included in minimum wage, how much can be assessed for room and board, and the requirements in order to be able to do so.

For the vast majority of employees, the minimum wage is $10.25.  If you're getting paid less than $10.25 (before deductions) for each hour worked, I'd generally suggest making inquiries about your rights.

NB:  Unpaid Internships:  While there are some circumstances in which unpaid internships are legal, those are very restricted.  I would go so far to say that a significant majority of unpaid internships in Ontario are unlawful, and that the interns are, in fact, employees entitled to be paid at least minimum wage.  If you are an unpaid intern, or are an employer concerned about whether or not your unpaid internships are ESA compliant, contact me.

(2)  Overtime

Again, there are exemptions, but the general rule is that if you're working more than 44 hours in a week (or, in some circumstances, more than 88 hours in two weeks), you're entitled to be paid at "time and a half".  It is also possible, under some circumstances, for an employee to get 'time off in lieu' instead of overtime pay.  But the key principle is that, over 44 hours in a week, each hour is worth an hour and a half.

Many small employers ignore this, and pay overtime at 'straight time'.

As well, it should be noted that "We didn't approve the overtime" is not an excuse to not pay the overtime pay.  If the employee works the time, he or she is entitled to be paid fully for it, approved or not.  If you have a policy prohibiting unapproved overtime, then the right answer is to pay out the unapproved overtime, and to properly discipline the employee for violating the policy.  If you don't have such a policy, get one.  I can assist with that.

(3)  Hours of Work

There are a few nuances to hours of work.  The first thing to know is that, with non-exempt employees, if you want to be able to ask an employee to stay late periodically, you need a written contract permitting you to do so.  Without a written agreement contemplating the employee putting in additional hours of work, it is unlawful to require or permit an employee to work more than the greater of 8 hours in a day or the 'regular work day'.

In addition, in order to have a non-exempt employee work more than 48 hours in a week, you need both a written agreement and Ministry approval.

So it isn't always illegal to have an employee work 50+ hours per week, but unless there's an agreement and the employer has jumped through the appropriate hoops, it usually will be.

In addition, an employee must get at least 11 consecutive hours of free time each day, and at least 8 hours free between shifts - unless the combined shifts total less than 13 hours.  (It's complicated.  See why we need lawyers?)  And also at least a full 24 hours off once a week, or a full 48 hours off once every two weeks.

(4)  Break Times

In general, it is illegal for an employee to work more than 5 consecutive hours without a half hour break.  The break may be unpaid, and under certain circumstances may be broken into two 15 minute breaks.

This one is often ignored by small businesses - it is not uncommon to see a business with a single employee staffing the desk for the whole business day, without a break, expected to eat lunch at the desk and still take customers while doing so.  This is generally unlawful.

It is also not uncommon for an employee to say, "Can I skip my lunch and go home early instead?"  Again, it's unlawful, even if it's at the employee's request.  Break time policies should make it very clear that this is not permissible.

(5)  Public Holiday Pay

There are a number of nuanced treatments of public holiday pay, and a few different ways of handling it.

But the biggest compliance problems I've seen relate to employers ignoring it altogether.  Public holidays basically mean, under most circumstances, either paid time off or extra cash in your pocket.  That perhaps oversimplifies the point too much, but it should be enough for employees to realize if they may have rights that are being ignored, in which case they should inquire into their rights.  Likewise, I would encourage employers to contact me for additional details in how to comply with your obligations.

Side Notes:

I can't emphasize enough that there are exemptions to all these rules.  However, the best way to understand how the employment standards regime applies to your situation specifically is to make inquiries of a qualified professional.

I should note that Federally-regulated employees have a different employment standards regime, but that's a relatively small class of employers, most of them being larger employers with established policies (not to say that all of them are necessarily legally compliant, as the bank overtime actions illustrate).

It also bears noting that these are minimum standards, which cannot be waived, but greater benefits can be contracted for:  In other words, if your contract says you get time and a half after 40 hours, then that's what's required - the ESA doesn't override that language.

The Bottom Line For Employees

If you aren't sure if you're getting your due from your employer, contact a lawyer about it.

The Bottom Line for Employers

ESA compliance is a bigger deal than you might realize.  It can end up leading you through expensive legal processes, hefty orders to pay, with additional administrative fees to the Ministry, etc.  It is important for all employers to ensure that they understand their obligations under the ESA, and to implement policies and practices to comply with their legal obligations.

There's a cost to it, of course, but the cost of failing to do so can be much more substantial.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.


  1. I think this post is evidence of a huge problem with employment standards legislation in Ontario: lack of clarity and certainty. (I should be clear that the problem is in the legislation, not in your post per se, which explains things nicely.) Employment Standards legislation is MINIMUM standards legislation. Such legislation ideally should be as simple as possible not only to promote understanding of right and responsibilities but also to make a firm statement that there are certain minumum standards of work that permit no exception. If the legislation were more straightforward, your average worker would be more aware of his or her rights. If minimum wage is $11.00 an hour, then make it $11.00 an hour for everyone. Is an extra dollar or two an hour for a server going to drive restaurants out of business? Realistically, no. If the standards are truly minimum, don't exempt any employees. We expect lawyers and doctors will make more anyway? Great, then compliance will be easy.

    1. Thanks for the comment, Chris.

      I'll grant that there's some complexity to the ESA framework, and that it's far too easily misunderstood - I've seen plenty of occasions where a manager or HR professional or non-employment lawyer (and even a judge now) have looked at the ESA and said "Well, I guess that sets out the full obligations of the employer." But the truth is that there are plenty of resources abound that anyone who knows how to use Google can find out otherwise.

      ( there's an idea, actually. I can cite case law until I'm blue in the face to try to explain to an employer why their position is wrong as a matter of trite law, but suggesting that they Google it...I digress.)

      However, I'm not overly concerned about the differential minimum wage. The outright exemptions for minimum wage are pretty trivial: Even in this market, it's hard to imagine a lawyer working for less than minimum wage. (Though compliance may be more difficult for commissioned salespeople, as it happens.)

      The reduced rates...I don't think they really cause much confusion, in general - the differential rate is well-known in the restaurant industry, and for young people as well (and, in any event, if an employer doesn't realize that it can pay its young students less, that's the employer's own loss). It makes it more difficult for people like us to talk in broad generalities - it would be much easier to say "Every employee in Ontario is entitled to x", as opposed to "With certain exemptions, most employees are entitled to x, unless you're in this other category, in which you're entitled to y, or..." But the truth is that, for most people who need to ask about a minimum wage, it's $10.25.

      I might be persuaded that the reduced minimum wage for servers is bad policy for other reasons, but I think the reduced minimum wage for young people is good policy, and I'm surprised the difference remains so small. As much as the arguments about a 'living wage' make a certain amount of sense, that sense largely dissolves when talking about high school students working part time and living with their parents.