Welcome to our 2023 year in review! This past year there were hundreds of changes to employment laws for HR teams to track and implement. Among all of these legal developments, a few themes emerged. In our 2023 year in review, we take a look at 5 key HR compliance trends – all of which have ongoing implications for employers across Canada.
- Sick Leave – During the pandemic, unions and employee groups argued for expanded sick leave rights. Governments continue to explore this issue and make changes.
- Employer Transparency – Whether it is greater transparency in pay, job postings or employer policies, this is an increasingly popular way for governments to create new employee rights.
- Who is an Employee – As more workers engage in the “gig economy”, governments have turned their attention to the legal rights of workers that have not traditionally been considered employees.
- Remote Work – The genie is out of the bottle – many workers have shown that they can successfully work from home. A remote workforce often means that employers must comply with new laws.
- Artificial Intelligence – AI is probably the most discussed development of 2023. Many employers may be focusing on how they can use AI in day-to-day work, but they should also consider new and emerging laws.
#1 Sick Leave
For the third year in a row – see our 2021 and 2022 reviews – sick leave made it into our year end “top 5”. The pandemic definitely shone a light on workplace sick leave entitlements (or the lack thereof), garnering the attention of governments across Canada.
Prince Edward Island is the latest province to implement a new paid sick leave. In addition to 3 days of unpaid sick leave, employees will be entitled to earn up to 3 days of paid sick leave per year. Employees earn their first day of paid sick leave after 12 months of continuous employment, and earn an additional day each year – earning a maximum of 3 days after 3 years of employment. Note: The government must proclaim this requirement into force.
Last year, the federal government became the first jurisdiction in Canada to establish a robust paid sick leave program. This entitled federally-regulated employees to accrue up to 10 days of paid sick leave a year.
More importantly, the feds also amended the Employment Insurance Act (EI) to increase EI sickness benefits – for all employees – from 15 to 26 weeks. They made corresponding amendments to the Canada Labour Code (the Code), increasing unpaid sick leave for federal workplaces to 27 weeks.
Ontario is the first province to respond to the expansion of EI sick benefits. It recently announced consultations on a new, job-protected leave to match the length of EI sickness benefits. This could potentially increase unpaid sick leave in Ontario from 3 days to 26 weeks.
Key Takeaway: The increase to EI sickness benefits could be the best indicator of what changes to sick leave employers can expect to see in the coming year. A few years ago, the federal government extended the time period for collecting EI parental benefits. Provinces, in turn, amended their employment standards legislation to extend parental leave entitlements. We may see a similar response to EI sickness benefits, with provinces increasing unpaid sick leave entitlements to match the EI program. Given that Ontario has already announced a consultation on this very issue, we may see Ontario take the lead on the expansion of unpaid sick leave. [Note: Currently, Quebec is the only province that requires employers to provide 26 weeks of sick leave.]
#2 Employer Transparency
We have written before about the hot topic of pay transparency. A recent study found that 84% of Canadians would support pay transparency laws. Governments across Canada – including Nova Scotia, Newfoundland and Labrador, Prince Edward Island and British Columbia – have responded by passing legislation in this area.
Generally, pay transparency legislation requires employers to disclose pay information in public job postings, and prohibits them from asking workers about their wage history. Some jurisdictions, like B.C., go a step further and require employers to file pay transparency reports (i.e., disclosing gender-based wage gaps) .
While Ontario appeared to be reluctant to enact pay transparency legislation passed by a previous government, it recently introduced amendments to increase the transparency of the hiring process. In addition to requiring employers to disclose expected compensation in any public job ads, they will have to indicate whether any AI tools were used to screen, assess or select applicants for a position. These changes build on transparency requirements included in previous Ontario Bills, which require employers to disclose their expectations around disconnecting from work and electronic monitoring.
Ontario also announced that they will be launching a consultation on whether it should prohibit the use of Non-Disclosure Agreements to settle cases of workplace sexual harassment, misconduct or violence. This development appears to pick up on the Non-disclosure Agreements Act, which was passed by Prince Edward Island in 2021.
Key Takeaway: Imposing new transparency obligations on employers or preventing employers from concealing certain information seems to be popular. While these laws are relatively uncontroversial and low-risk, they enable governments to communicate pro-employee messaging. We expect to see a continuing emphasis on employer transparency obligations in 2024. In particular, employers with Ontario-based employees should watch for new requirements.
#3 Who is an Employee
With the rise of the gig economy, governments across Canada have focused more attention on regulating the treatment of workers that fall outside of the traditional employer-employee model.
Ontario and B.C. passed legislation aimed at providing certain rights to those who are typically considered gig workers – i.e., workers performing ride-share, delivery, or courier services based on assignments through a digital platform. These new rights include a new minimum wage and greater transparency around pay, work assignments and termination.
While the current legislation only applies to digital platform workers, these developments indicate that provincial governments are starting to consider whether different types of workers should have more entitlements.
The federal government has made changes that apply more broadly. They amended the Code to prohibit employers from misclassifying an employee as an independent contractor in order to deny them their employment standards entitlements. In this year’s budget, the feds announced that they will amend the Code to further strengthen prohibitions against employee misclassification.
Key Takeaway: Increased government scrutiny of the gig economy means that we will probably see further regulation of what (to date) has been a largely unregulated component of Canadian workplaces. Even employers who believe that they do not utilize “gig” workers should keep their eye out for potential amendments that may change who they understand to be (or not to be) an employee.
#4 Remote Work
Remote work has decreased since the pandemic, but a considerable number of workers continue to work from home full-time or in hybrid arrangements. For example, a Canadian Chamber of Commerce survey, conducted in late 2022, reported that 25% of professional services workers are fully remote and 47% work in hybrid positions.
As we noted in an earlier post, a fully remote workforce can create unexpected HR compliance challenges for employers. If employees move and work remotely from other provinces, typically, the employment laws of those other provinces will apply. This means that employers must:
- comply with employment standards that vary from one jurisdiction to the next;
- watch for unique (and possibly unexpected) employment law requirements (e.g., French language laws for Québec-based employees); and
- track changes to many more laws.
The work from home trend has also caught the attention of provincial governments, which have taken steps to ensure that HR laws apply to remote workers. For example, Québec recently amended its Act respecting occupational health and safety to clarify that it applies to workers who telework and their employers. And Ontario amended its employment standards legislation to clarify that when determining whether 50+ employees have been terminated (for purposes of group termination), employers will have to include employees who work from home.
Key Takeaway: Remote and hybrid work is now a significant part of the Canadian workplace. Governments have taken notice and are fine-tuning HR laws to ensure that these employees have the same rights as workers who regularly report to a traditional workplace. Employers with remote workforces must not only consider the laws of the jurisdictions where their employees work, but also potential changes to HR legislation that specifically address this new era of remote work.
#5 AI
Since the launch of ChatGPT last fall, AI has become the hottest topic across all facets of society – and this definitely includes the workplace. AI discussions tend to focus on how organizations can use AI to work more efficiently, and in turn, whether this means that AI will take over jobs across a wide-range of industries.
In a recent post, we discussed some of the risks that employers should consider before relying on AI. Governments have also started to address some of these risks. As we noted above, Ontario’s latest Bill will require employers to disclose whether they use any AI tools to screen, assess or select applicants for a job.
The federal government went further with Bill C-27, which includes provisions dealing with “automated decision systems” or AI-based technology that assists or replaces human decision-makers. If passed, Bill C-27 could impact federally regulated employers that use automated decision systems in their hiring and HR practices (e.g., resume screening or ranking programs, aptitude tests, personality tests etc. that meet the above definition). Specifically, employers would have to comply with the following requirements:
- Plain Language: Organizations would have to publish – in plain language – a general account of their use of any automated decision system to make predictions, recommendations or decisions about individuals that could have a significant impact on them.
- Response to Request for Explanation: If an individual makes a request, the organization would have to provide the individual with an explanation of the prediction, recommendation or decision. And the explanation would have to include the type of personal information that was used, the source of the information and the reasons or principal factors that led to the prediction, recommendation or decision.
Key Takeaway: AI is an incredibly fast-moving technology development. Many governments are racing to keep up with regulation. This means that employers will also need to continually be watching for new laws regulating how they use AI.
2023 Year in Review Made Easy
Compliance with constantly changing employment laws can be challenging and time consuming. Compliance Works software tracks amendments to laws in real-time, ensuring that our subscribers are the first to know about critical HR law changes that will affect their day-to-day business. And our Amendments feature make sure you haven’t missed anything – you can scan amendments from the past 60 days, 6 months or year!
