Skip to content

Change to Ontario Employment Standards: IT consultants and business consultants excluded from ESA

Mark Tector and Ben Currie

Effective January 1, 2023, amendments to Ontario’s Employment Standards Act, 2000 (“ESA”) took effect, excluding “business consultants” and “information technology consultants” from the application of the ESA.

This is a significant change, and one which may assist some employers with adapting to changing work arrangements, including dealing with consultants and the legal risks associated with dependent contractors. Based on the recent changes to the ESA, if the following conditions are met, certain “business” or “IT” consultants are exempt from the application of the ESA (i.e. no statutory vacation, no statutory overtime, no statutory notice or severance pay).

The conditions are as follows:

  1. Definition of Position: The consultant must meet the definition of either “business consultant” or “information technology consultant”, which are as follows:

“Business consultant” is broadly defined as:

an individual who provides advice or services to a business or organization in respect of its performance, including advice or services in respect of the operations, profitability, management, structure, processes, finances, accounting, procurements, human resources, environmental impacts, marketing, risk management, compliance or strategy of the business or organization.

“Information technology consultant” is similarly broadly defined as:

an individual who provides advice or services to a business or organization in respect of its information technology systems, including advice about or services in respect of planning, designing, analyzing, documenting, configuring, developing, testing and installing the business or organization’s information technology systems.

  1. Provide Services Through a Business: The business or IT consultant must provide services either through a corporation (of which the consultant is either a director or a shareholder subject to a unanimous shareholder agreement), or a sole proprietorship (of which the consultant is the sole proprietor and provides services under a sole proprietorship registered under the Business Names Act);
  2. Agreement: There is an agreement in place for the consultant’s services that sets out what the consultant will be paid, which must be expressed as an hourly rate and at least $60 per hour excluding bonus, commission, expenses, allowances, and benefits; and
  3. Payment: The consultant is actually paid the amount set out in the agreement, i.e. at least $60/hr.

There may also be additional requirements prescribed by regulation in the future. Given this change only took effect at the beginning of this month, we await caselaw interpreting the new exclusions.  We will also be monitoring whether other provinces follow Ontario’s lead.

Fitting within the new exclusions will require carefully drafted agreements. Contact a Stewart McKelvey employment lawyer for assistance in drafting an agreement, or with any questions related to these or other workplace related legal issues.


This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Labour & Employment group.

Click here to subscribe to Stewart McKelvey Thought Leadership.

SHARE

Archive

Search Archive


 
 

Preparing for Canada’s “Modern Slavery Act”: considerations and guidance for businesses

November 30, 2023

By Christine Pound, ICD.D, Rebecca Saturley, & Daniel Roth Canada’s anti-modern slavery legislation comes into force on January 1, 2024. To prepare for the first reporting deadline on May 31, 2024, organizations need to determine…

Read More

Replace-me-not: Bill C-58 proposes ban on replacement workers in federal strikes and lockouts

November 29, 2023

By Brian Johnston, K.C. and Richard Jordan On November 9, 2023, Minister of Labour, Seamus O’Regan, introduced Bill C-58 in the House of Commons to amend the Canada Labour Code to prohibit the use of…

Read More

Final retail payment activities regulations released

November 28, 2023

By Kevin Landry & Eryka Gregory The Retail Payment Activities Regulations (“Regulations”) under the Retail Payment Activities Act (“RPAA”) were finalized and published in the Canada Gazette Part II on November 23, 2023. The RPAA was…

Read More

Bill C-365 calls for plan for implementation of open banking in Canada

November 17, 2023

By Kevin Landry On November 9 2023, Bill C-365, An Act respecting the implementation of a consumer-led banking system for Canadians (“C-365”), short titled as the ‘Consumer-led Banking Act’ was read in the House of…

Read More

More limits: NSCA tightens the test for disallowing a limitations defence

November 15, 2023

By Jennifer Taylor The Nova Scotia Court of Appeal (“NSCA”) has issued an important decision clarifying the test to disallow a limitations defence. The decision, Halifax (Regional Municipality) v Carvery (“Carvery”), has real implications for personal…

Read More

Anticipating changes to the Competition Act: what businesses need to know

November 1, 2023

By Deanne MacLeod, K.C., Burtley Francis & David Slipp On September 21, 2023, the Federal Government introduced Bill C-56: An Act to amend the Excise Tax Act and the Competition Act (“Bill C-56”), with the…

Read More

Powering the future: Green choice program regulations

September 22, 2023

By Nancy Rubin, K.C. and Lauren Agnew The long-awaited Green Choice Program Regulations (N.S. Reg. 155/2023) were released by the provincial government on September 8, 2023, offering some clarity into the practical implementation of Nova…

Read More

Privilege protected: Court of Appeal rules NL’s Information and Privacy Commissioner barred from reviewing solicitor-client privileged information

September 20, 2023

By Koren Thomson, John Samms, and Matthew Raske The Newfoundland and Labrador Court of Appeal has held that the Information and Privacy Commissioner for this province (the “Commissioner”) does not have the authority to order…

Read More

Amendments required for Prince Edward Island code of conduct bylaws

September 18, 2023

By Perlene Morrison, K.C. Municipalities are required to pass code of conduct bylaws in accordance with section 107 of the Municipal Government Act (the “MGA”). Subsection 107(1) of the MGA specifically states that a municipality’s…

Read More

Professionally speaking: Ontario Superior Court upholds professional regulators’ right to moderate speech

September 14, 2023

By Sheila Mecking and Kathleen Starke On August 23, 2023, the Ontario Superior Court (“ONSC”) upheld a complaints decision which ordered a psychologist to complete a continuing education or remedial program regarding professionalism in public…

Read More

Search Archive


Scroll To Top