Employment Law: Ontario Deductions from Wages and More

Ontario Deductions from Wages

Everything you need to know about your rights to your wages and pay.

The law in Ontario says that your employer can deduct money from your pay for specific reasons and in specific ways. In some cases, your employer may be able to deduct other amounts from your pay if you agree in writing.

What deductions are taken from a pay cheque in Ontario?

In Ontario, the most common types of wage deductions are taxes, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. Your employer is required by law to deduct these amounts from your payment of wages and remit them to the appropriate government agency. Other deductions may be made if there is a court order to do so. All deductions should be clearly outlined on your wage statements.

Other common deductions include:

  • Union dues
  • Health and dental insurance premiums
  • Retirement savings plan contributions
  • Parking or transit passes
  • Childcare expenses
  • Charitable donations
  • Statutory deductions

Employers may also deduct other amounts from an employee’s wages if they’re provided with written authorization. For example, if you owe money to your employer for damage to company property, they may agree to deduct the amount owed from your pay.

If you are unsure about any deductions being taken from your pay, you should speak to your employer.

What percentage is taken off a pay cheque in Ontario?

The percentage of payroll deductions taken from a pay cheque in Ontario will depend on the type of deduction.

For example, CPP contributions are 4.95% of your pay, and EI premiums are 1.66% of your pay. These deductions are mandatory, and your employer is required by law to deduct them from your pay.

Other deductions, such as union dues or parking passes, are not mandatory. The percentage of these types of deductions will depend on your agreement with your employer and any other written authorization.

Can an employer deduct money from my pay if I quit?

In general, no. If you quit your job, your employer cannot deduct any money from your final pay cheque unless you give them written authorization.

However, there are some exceptions. For example, if you owe money to your employer for damage to company property, they may be able to deduct the amount owed from the wages paid on your final paycheque.

What if my employer doesn’t pay me on time?

Your employer must pay you at least once a month and on your regular pay day. You can file a complaint with the Ministry of Labour if they don’t.

Can an employer change the date you receive your pay cheque without notice?

Yes, but only under certain circumstances. For example, if your employer needs to change the day you receive your pay because of a change in their business operations, they can do so as long as they give you at least 2 weeks’ written notice. Other circumstances where an employer can change the date you received your pay are if you change your work schedule or if you take unpaid time off.

Are employers required to provide vacation pay?

In Ontario, all employees are entitled to vacation time and vacation pay. The amount of vacation time you are entitled to depends on how long your employer has employed you.

For example, if you have been employed for 5 years or more, you are entitled to 3 weeks of vacation. If you have been employed for less than 5 years, you are entitled to 2 weeks of vacation. Many employers offer more vacation pay; this information will be found in your employment contract.

What if an unauthorized deduction is taken from my pay cheque?

If an unauthorized deduction is taken from your pay, you have the right to ask for a refund. If your employer refuses to give you a refund, you can file a complaint with the Ministry of Labour.

Can an employer change an employee’s wages without notice?

Yes, but only under certain circumstances. For example, if there is a change in the cost of living, an employer can change an employee’s wages without notice. Other circumstances where an employer can change an employee’s wages without notice are if you change your work schedule or if you take unpaid time off.

Can an employer withhold wages payable to an employee?

An employer can withhold wages payable if the employee owes them money. An employer cannot withhold wages for any other reason. For example, an employer cannot withhold wages because an employee has not yet completed their work. If an employer is withholding wages for no reason, it’s imperitve to contact the Ministry of Labour.

What is the three-hour rule in Ontario?

The three-hour rule in Ontario states that if an employee is scheduled to work for less than 3 hours, they must still be paid for those hours. For example, if an employee is scheduled to work from 9am-12pm but is only needed for 2 hours, the employee must still be paid for the full 3 hours. Exceptions include if the employee is on call, if the work is for training purposes or with the employee’s authorization. An employer must pay an employee for all hours worked.

Can an employer deduct an employee’s wages for errors or cash shortages?

No. An employer cannot deduct money from an employee’s wages for errors or a cash shortage. The only exception is with the employee’s written authorization.

More employment law related to wages and pay

How does employment law protect my rights for wages and pay?

Employment law in Ontario sets out the minimum standards for wages and pay. These standards include how often you must be paid, how much you must be paid, and what deductions can be made from your pay. The Employment Standards Act (ESA) is the law that sets out these minimum standards.

The ESA applies to most employees in Ontario, regardless of whether they are full-time, part-time, temporary, or seasonal. There are a few exceptions, such as employees who are covered by a collective agreement or certain types of Crown employees.

The ESA requires that employers provide employees with certain information in writing, such as their rate of pay and the pay period. This written information can be provided in the form of an employment contract, pay stub, or other document.

The ESA also sets out when and how often employee’s wages must be paid. In general, employees must be paid at least twice per month, on regularly scheduled pay days. However, there are some exceptions, such as if the employee provides written authorization to be paid less often.

Employees must be paid for all hours worked, including overtime hours. Overtime is defined as any hours worked over 44 in a week. For most employees, the overtime rate is 1.5 times their regular rate of pay.

As mentioned prevously, the ESA also sets out what deductions can be made from an employee’s pay. Permitted deductions include things like income tax, Employment Insurance, deductions specified in a court order, and pension deductions. Deductions can also be made for other things, but only if the employee has given their written authorization.

If an employer fails to comply with the ESA, an employee can file a complaint with the Ministry of Labour. The Ministry of Labour can order the employer to pay any unpaid wages, and can also impose a fine.

More about the ESA

The ESA does not cover all employees. For example, the ESA does not cover:

– most federal employees

– some Crown corporations

– members of the armed forces

– police officers

– domestic workers in a private home

– managers and supervisory personnel

– independent contractors

The ESA does not cover the following types of deductions from pay:

– deductions required by law, such as income tax or court-ordered support payments

– union dues

– charitable donations

– overpayments of wages that were previously paid in error to the employee

– payroll errors where the employer has made a good faith attempt to correct the error

– voluntary deductions made at the request of the employee, such as child care or RRSP contributions

– authorized wage assignments, such as those for alimony or child support payments

The ESA does not cover the following types of pay:

– tips and gratuities

– expense reimbursements

– benefits, such as health insurance or pension contributions

– vacation pay

– severance pay

– profit sharing plans

– commissions

– bonuses

– wages in lieu of notice

– stock option plans

If you have questions about whether the ESA applies to you or your situation, contact the Employment Standards Branch.

How does the minimum wage in Ontario compare to other jurisdictions?

The minimum wage in Ontario is currently $15 per hour. This is higher than the minimum wage in most other Canadian provinces and territories, which ranges from $11.35 per hour in Nunavut to $13.60 per hour in Alberta.

The minimum wage in Ontario is also higher than the minimum wage in most US states, which ranges from $7.25 per hour in Wyoming to $12 per hour in Washington state.

Minimum wage rates are typically reviewed and increased on an annual basis. The next scheduled increase in Ontario is October 1, 2022.

Can an employer pay less than minimum wage?

There are a few exceptions where an employer can pay less than minimum wage. These include if the employee is a student, liquor server, hunting or fishing guide, or certain types of Crown employees.

Employers can also apply for a “wage exemption” from the Ministry of Labour. This exemption allows the employer to pay less than minimum wage to certain employees, such as those with a developmental disability.

What are the consequences of not paying employees?

If an employer fails to pay an employee the wages they are owed, the Ministry of Labour can order the employer to pay them. The Ministry of Labour can also impose a fine on the employer.

In addition, the employee can sue the employer for the wages in civil court. If the employee is successful, they may be awarded damages, which could include interest on the unpaid amount and legal costs.

Finally, if the failure to pay wages is part of a pattern of behaviour, the employer may be prosecuted criminally.

What are some common issues that arise with wages and pay?

Some common issues that arise with wages and pay include:

– Employees not being paid the minimum wage

– Employees not being paid for all hours worked

– Unauthorized deductions being made from employee wages

– Employers not providing employees with written information about their rate of pay and pay period

– Employees not being paid on a regular and timely basis

If you have any concerns about your wages or pay, you should speak to your employer. If your employer is not willing to resolve the issue, you can contact the Ministry of Labour.

Overtime pay laws in Ontario

An employer must pay an employee 1.5 times his or her wages for any hours worked over 44 hours a week.

For example, if an employee normally earns $10 per hour and works 50 hours in a week, the employee would be entitled to $10/hour for the first 44 hours and 1.5 times their regular rate of pay for the 6 hours of overtime, totaling $115 for the week.

There are some exceptions to this rule, such as if the employee is working in a managerial or professional capacity.

Can an employer refuse overtime pay?

No. An employer cannot refuse to pay overtime. If an employee works overtime, the employer must pay 1.5 times his or her wages regular for those hours.

Can an employer require an employee to work overtime?

Yes, but only under certain circumstances. For example, if there is a surge in business demand, an employer can require employees to work overtime. An employer cannot require employees to work overtime if it would put the employees’ health or safety at risk.

An employer owes me unpaid wages, what can I do?

If you are owed vacation pay, overtime pay, wages for hours worked, wages for statutory holidays, or any other outstanding wages you can file a complaint with the Ministry of Labour or sue your employer in court.

Laws pertaining to pay periods in Ontario

An employer must establish regular pay periods and must provide employees with written notice of their rate of pay and pay period.

Regular pay periods can be weekly, bi-weekly, semi-monthly, or monthly.

An employer must pay employees no later than 7 days after the end of a pay period.

Can an employer change a pay period without notice?

Yes, but the employer must provide employees with at least 3 days’ notice of the change.

If an employee is fired, do they have to be paid right away?

No. An employer has until the next regular pay period to pay an employee who has been terminated. However, if the employee requests it, the employer must provide the employee with a final pay cheque on the last day of employment.

If an employer goes out of business, do employees still get paid?

It depends. If there is someone to take over the business, that person is responsible for paying employees any wages they are owed. If there is no one to take over the business, the employees may be able to file a claim with the Wage Earner Protection Program.

The Wage Earner Protection Program is a federal program that provides eligible workers with up to $3,500 of their unpaid wages, vacation pay, and severance pay if their employer goes bankrupt or ends business operations.

Severance pay laws in Ontario

If an employee is terminated, the employer may owe the employee severance pay. The amount of severance pay an employer owes an employee depends on a number of factors, including:

– How long the employee was employed

– The size of the company

– Whether the termination was with or without cause

– Whether the employee was given working notice

An employer does not have to provide termination pay if the employee:

– Resigns

– Is fired for just cause

– Works for a small company (fewer than 5 employees)

– Is employed for less than 3 months

– Is employed on a temporary basis

An employer who owes an employee severance pay must provide the employee with a written notice of termination that includes:

– The date of termination

– The amount of severance pay, if any

– Any other terms and conditions of the termination, such as continuing health benefits

If you have been terminated and are owed severance pay, you can sue your employer in court or file a complaint with the Ministry of Labour.

For more information on pay and wages in Ontario and which federal or provincial act governs pay and deductions from wages, please visit the Ministry of Labour’s website.

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