Self-Audit Requirement under Ontario’s Employment Standards Act
Did you know? As of May 20, 2015, Ontario employers could be required to self-audit their Employment Standards Act compliance.
The amendments allow Employment Standards Officers to require an employer to:
- conduct a self-audit of its records, practices or both to determine whether it is in compliance with one or more provisions of the ESA and regulations; and
- report the findings of such self-audit to the Officer, including any incriminating evidence of an ESA violation.
The Employment Standards Officer must provide the employer with written notice of the audit. The notice will identify information to be provided in the employer’s report regarding ESA compliance and may require the employer to describe the measures that will be taken in order to become compliant. The amendments specifically target wage violations, permitting the written notice to direct the employer to:
- include in its report to the Employment Standards Officer an assessment of whether one or more employees are owed wages; and
- pay wages owed if the employer assesses that one or more employees are owed wages.
An employer who provides a report to an Employment Standards Officer may still be subject to inspections, investigations and enforcement measures.
While the practical application of this new provision is untested, it raises significant issues for employers; namely, it puts the employer in the inspector’s role and may ultimately result in the employer having to disclose incriminating evidence to the government.
Proactive employers may want to conduct a confidential and privileged audit of their workplace practices before receiving a written notice from the Ontario Ministry of Labour’s Employment Standards Branch. McCarthy Tétrault has developed an innovative HR Compliance & Risk Management Diagnostic that helps employers achieve compliance with employment regulations, reduce the risk of individual employee claims and multi-employee class actions, and mitigate reputational damage related to workplace issues. Please contact me if you wish to discuss this diagnostic solution in more detail.
Employment Standards Act compliance HR Compliance & Diagnostic risk management