Monday, May 16, 2011

Wage theft from precarious workers

Ontario's Workers' Action Centre has documented wage theft among precarious workers. The survey of 520 people in low-wage or precarious work found:

• 22% earned less than minimum wage. An additional 22% worked at minimum wage – that is 10% below the poverty line in 2011.
• 39% of those that worked overtime failed to receive overtime pay.
• 36 % of workers were fired or laid off without termination pay or notice.
• 34% had problems getting their vacation pay.
• 33% of workers reported being owed wages from their employer, and 77% of these workers were unsuccessful in obtaining the wages owing to them.

The short version is that minimum employment standards are often not met for the most vulnerable workers in Ontario.

Like Alberta, Ontario relies upon complaints to trigger enforcement action. This means ignorance of the rules among workers or fear of employer retaliation can be significant barriers to having even the most minimal terms and conditions of employment enforced.

One of the strategies for increasing compliance that the Workers' Action Centre suggests is tripling any "monies owed" when an investigation is launched. This would cause employers to think twice about shorting workers' wages because there would be a meaningful penalty attached to such behaviour (i.e., paying triple what was withheld).

At present in Alberta, the only risk employers run by failing to provide statutory minimum pay is having to pay any unpaid money. While they can be prosecuted, the only example of successful employment standards prosecution since 2000 is Domo Gasoline. In 2002, it pled guilty to some of the charges laid against it in 2001 related to illegal employee deductions (the remaining charges being dropped) and received a $5750 fine (the maximum corporate fine was $100,000).

Interestingly, Domo was charged again in 2003 for the similar offenses and pled guilty to some of the charges (the remainder being dropped). The fine was $23,000. This suggests actual fine levels are not necessarily a significant deterrent, particularly since the province is prepared to negotiate partially dropping charges as well as the fine level.

-- Bob Barnetson

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