Bill 32 reduces workers' overtime choice and pay

This blog previous appeared on the Canadian Law of Work Forum.

Alberta is proposing changes to its Employment Standard Code that would permit employers to evade paying overtime (OT) premiums to workers by stripping workers of their right to refuse to participate in overtime averaging agreements. This has the potential to move hundreds of millions of dollars in OT pay from workers’ pockets to employers’ profits.

Background

Like all Canadian jurisdictions, Alberta has set limits on hours of work. In most cases, Alberta restricts work to a 12-hour window (ESC, s.16(1)). Alberta also normally requires that employers pay an overtime premium (1.5 times wage rate) if workers work for more than 8 hours in a day or 44 hour in a week (ESC, s.21). The policy rationale for limiting hours of work and requiring OT premiums centre on ensuring workers’ quality of life, reducing the safety risks associated with worker fatigue, and incentivizing additional hiring.

Alberta also allows employers and workers to enter into overtime averaging agreement (ESA, s.23.1(1)). Averaging agreements allow an employer to average the hours worked by a worker over a period of time when calculating whether the worker has met the weekly OT threshold and is entitled to the OT wage premium. Presently, overtime agreements can specify averaging over a period ranging from one to twelve weeks. Averaging agreements allow for workers and employers to agree to compressed work weeks (e.g., four ten-hour days instead of five eight-hour days) without triggering the OT premiums.

Any overtime paid out at the end of the averaging period is paid at a rate of 1.5 times normal wages. Although the legislation is slightly unclear on this, government policy asserts that time off taken in lieu of OT is paid at straight time. Here is the government’s existing summary of the average agreement device.

Proposed OT Changes in Bill 32

Bill 32 (Restoring Balance in Alberta’s Workplaces Act) was introduced in the legislature in early July. If passed, this bill will make a large number of changes to both the Employment Standards Code and the Labour Relations Code. Relevant to this post, Bill 32 will allow employers to impose OT averaging agreements on workers with two weeks notice (Bill 32, s.1(11)) unless there is a collective agreement in effect. Presently, workers must agree to overtime averaging.

Bill 32 will also increase the period of time over which OT can be averaged from 12 weeks to 52 weeks and do away with the two-year limit to such agreement and loosen the rules around changes in work schedules (which otherwise require 24-hours of notice).

These changes provide employers with oppportunities to evade paying OT premiums. For example, the weekly overtime threshold is 44 hours. If a worker works a 60-hour week (say six 10-hour days), they would normally be eligible for 16 hours of pay at over-time rates. Under an overtime averaging agreement, those 16 hours could be averaged (i.e., spread across) up to 52 weeks (roughly 20 minutes per week). This would spread the OT far enough not to engage the 44-hour weekly OT threshold (the daily OT threshold can be evaded under averaging agreement).

Under such an agreement, a worker could work up to 208 OT hours a year (i.e., more than five extra weeks) and the employer would never have to pay any OT premiums. The changes effectively guarantee that very few, if any, non-union Alberta workers will ever receive overtime pay, unless the employer agrees to pay it as an act of altruism or a job perk. Further, when a worker is entitled to be paid OT under an averaging agreement, that pay may be delayed until the end of the averaging period (now as long as 52 weeks).

Bill 32 also compounds 2019 changes to how banked OT is paid out. Under those changes, a worker who enters into an OT banking arrangement (which is notionally voluntary, but practically up to the employer) and wishes to take banked time as time off with pay (instead of being paid out), does so at straight time.

Analysis

The amendments proposed in Bill 32 will enhance employers’ opportunities to avoid paying OT premiums. When the government makes it easier for to require over-time work without paying workers the over-time premium (as it is with Bill 32), the government is effectively transferring money from workers’ pockets to employers’ profits. Statistics Canada data from 2018suggests that there is roughly $3.3 billion in over-time premiums annually.

Rationally, every employer should enter into an OT averaging agreement. Not every employer will be able to do so. Unionized employers will remain subject to whatever their collective agreement says (this covers about 20% of the workforce in Alberta). Other employer may not be sophisticated enough to operate an agreement. There is no credible way to estimate the value of the transfer from workers to employers, but the annual amount is likely to be in the hundreds of millions of dollars.

Minister Copping framed these changes as “expanding choice for workers”in a Calgary Herald op-ed, noting:

…some workers may prefer to work four 10-hour days, instead of five eight-hour days. Then, they could receive three-day weekends. But changes made by the previous NDP government effectively made it difficult for employers to set up these schedules… .

This is the precise spin that conservative governments across the country have used to justify legal rules that permit employers to avoid overtime pay. In this framing, Copping fails to note that (1) under the present system, workers (as a group) have the opportunity to choose (or refuse) flexible schedule, and (2) Bill 32 takes away that choice by vesting decision-making with the employer. He also ignores that employers can manipulate this system to evade paying overtime premiums and that that long shifts increase the risk of injury to workers.

-- Bob Barnetson

OHS inspections show high levels of noncompliance

A few years back, some colleagues and I surveyed 2000 Alberta workers about injury and safety. One of our findings was that only about half of employers complied with basic OHS requirements, such as performing a hazard assessment.

A hazard assessment is a written document that identifies hazards in the workplace and how the employer intends to control those hazards. It is required by law. It is important because employers can only control those hazard that they identify.

The study found only 50% of employers had a hazard assessment. This is a pretty shocking level of non-compliance. Not surprisingly, there was some eye rolling and quiet suggestions that we were out to lunch. The politest criticism was that “how would workers know if there was a hazard assessment?”

Questioning the validity of studies is part of a well-known set of employer strategies to delay dealing with OHS issues. It comes after denying there is an issue and before employers buy their own study to show there is no problem.

So, a couple of years go by and then I ran across this graphic in the August 2020 issue of Alberta’s OHS e-news.

The crux of it is that OHS inspections of new employers during 2018-19 found pretty high levels of non-compliance around hazard assessments (50-59% in the four worst-offender industries). It is important to note that these findings were for new employers in industries where OHS visited 10+ times and these were the worst-performing industries. This means we shouldn’t carelessly generalize from these findings to every employer.

That said, I have three thoughts. First, these findings provide some support for our 2016 findings of 50% noncompliance with hazard assessments. Since these findings reflect inspections (where employers either were or weren’t able to produce a hazard assessment), one can’t argue them away as simply worker (mis)perceptions.

Second, that these inspection results generated similar results to worker surveys, suggests that worker surveys may actually generate valid and reliable data about employer practices. That is to say, workers do actually know what is going on in the workplace in terms of safety.

Third, the worst industries for not having met the most basic OHS requirement—beauty parlours and school, restaurants and catering, food and convenience stores, and hotels—are many of the same industries that will benefit from Alberta looseningits child labour laws.

Specifically, Alberta is loosening the rules for 13- and 14-year-olds to allow them to do more restaurant work and light janitorial work. (The exact details on this as still sketchy, but 13-year-old janitors sounds pretty dumb no matter what the details.) So, basically, the UCP is sending vulnerable kids into workplaces that we have good evidence to indicate they don’t abide by OHS rules.

-- Bob Barnetson

Alberta WCB review foreshadows worse compensation for injured workers

Alberta is consulting about changes to the Workers’ Compensation Act, putatively in response to stakeholder concerns about 2018 changes made by the NDs. The UCP government is examining worker benefits, return to work, how to distribute any surplus in the accident fund, and a significant number of issues related to governance and processes.

The survey foreshadows some changes:

• Maximum insurable earnings: In 2018, the maximum insurable earnings cap was removed. Previously, injured workers would get 90% of their lost wages up to a cap of about $100k. The UCP seems to be looking at the return of a cap, which will negatively affect injured workers with high incomes.
• Inflation: Presently, benefits are indexed to Alberta’s consumer price index to offset the erosive effect for inflation. The UCP appears to be suggesting CPI minus 0.5% is appropriate to account for “measurement error” in CPI. Under-adjusting benefits for inflation will particularly harm workers with long-term or permanent wage loss.
• Presumptive status for psychological injuries: Presently psychological injuries that occurred at work due to traumatic events are presumed to be compensable unless proven otherwise. Presumptive status exists because proving causation is often difficult with non-acute physical injuries resulting in work-related injuries going uncompensated. I expect we’ll see traumatic psychological injuries no longer being deemed as compensable.
• Maintaining health benefits: Employers are required to maintain workers’ health benefits for up to a year if the worker is on WCB. Since this requirement as implemented, eight employers have found to have violated the requirement. The UCP seems to be flirting with allowing employers to cut workers and their families off from things like dental and vision and drug care when workers are injured (and experiencing an income drop). This seems terribly cold hearted.
• Interim relief: Workers can presently apply for interim relief to avoid financial hardship while the appeal a decision (generally to cut off their benefits). The UCP is asking if this is really necessary. Such relief is necessary to avoid injured workers being unable to make rent or feed their kids. Jesus Christ, already.
• Reinstatement: Workers have a right to reinstatement to this job at time of injury for 12 months after an injury. Employers refusing to reinstate or terminating a worker without reason is presumed to be retaliatory and penalized. This 2018 change was made because employers would often refuse to reinstate and efforts to pursue duty to accommodate cases through human rights was an ineffective remedy. The UCP appear to be considering returning things to 2018, where employers could basically dump injured workers with no consequences, although this exception may be limited to small employers (who comprise the vast majority of employers in Alberta).
• Termination on modified work: Presently, injured workers who get fired while on modified work, are returned to compensation (since they still have an injury-related wage loss). “Stakeholders” (i.e., employers) want these workers cut off WCB benefits, likely to reduce employer claims costs (which drive premiums). The courts say such a proposal is not cool, so why is Alberta exploring this?
• Accident fund surplus distribution: The WCB needs to maintain an accident fund with enough dosh to cover the current and future costs of current injuries. The accident fund is funded by employer premiums as well as returns on investments made by the WCB (since the fund has a lot of cash sitting in it). Sometimes, the fund is in surplus. When the fund is at 114% of estimated total liabilities, it is considered to be fully funded (this gives some slippage to cover injuries that occur today but are not yet recognized, such as diseases). When the accident fund is at 128% funded, the excess is used to fund safety and disability management work. Some of it can also be distributed to employers (although there have not been any distributions since 2017 since the find has not been in surplus). The UCP seems to be considering ways to restart employer distributions by lowering the thresholds for fully funded and/or for distributions. This has the potential to allow today’s employers to foist injury (specifically disease) costs onto tomorrow’s employers.
• Shorter appeal timelines: Presently, worker have two years to file an appeal of a decision. This two-year period reflects that may appellants are not sophisticated and may also be dealing with the effects of an injury. The UCP appears to be looking at shortening the timeline to one year. There is no indication that extending the timeline to two years (in 2018) resulted in any negative effects. Solving a non-problem in a way that will reduce worker access to appeals seems dumb.
• Benefit of the doubt: Where the evidence in a WCB matter is approximately equal, the Act gives workers the benefit for the doubt (i.e., is applied in the workers’ favour). This reflects that the point of workers’ compensation is to compensate workers, not to split hairs and screw them when the facts are a bit uncertain. The UCP is soliciting ideas about how to change this; the resulting suggestions are almost certain to result in worse outcomes for injured workers.
• Occupational disease review committee: The Regulation sets out certain occupational disease that are granted presumptive status (i.e., if you worked in the industry and get the disease, you get compensation). Prior to 2018, the list of diseases had basically been left unreviewed for 35 years (excepting some additions around firefighter cancers). In 2018, a periodic review process was established. The UCP is now asking if that is necessary.
• Physician choice: If the WCB requires a worker to undergo an independent medical exam, the worker chooses a doctor from a list of specialists maintained by the WCB. The UCP is proposing eliminating the workers’ option to choose in order to speed things up. Oddly, the WCB reports that 93% of workers choose a doc as soon as the decision is put to them and, for the rest, the 1-3 days they take to make a choice does not delay the assessment (because of how booking occur). So, again, we have the UCP trying to solve a non-problem at the expense of workers.
• Lost-time claims: Some employers are seeking the option of paying the first 2 or 3 days of a workers lost time (instead of it being paid through the WCB) in order to avoid a lost-time claim that will affect their ability to bid on projects. Changing the legislation to accommodate bad screening practices in private-sector bidding is crazy and opens up more room for employers to suppress injury claims than already exists. This change would also disproportionately benefit employers with the worst lost-time claims records by effectively allowing them to hide these injuries through direct pay and then moving them to modified work (whether real or bogus).
• WCB Board members: In 2018, the WCA was changed to require the government to appoint members of the workers’ compensation board from separate lists of people nominated by unions, employers, and the public. The UCP is suggesting this is unduly restrictive. About the only thing this requirement restricts is patronage appointments of unqualified or partisan members.
• WCB Reviews: In 2018, a legislative requirement for periodic reviews by committees comprising stakeholder representatives were enacted. The UCP appears to be considering eliminating the need for commissioners to be nominated by stakeholder communities. This is a terrible idea and will lead to stacked panels. How would the UCP have reacted if the previous WCB review was staffed entirely by union types?

Overall, this consultation looks designed to rollback important changes to the WCB that the NDs made. The foreshadowed changes will benefits employers and harm workers. This consultation is open until August 10.

-- Bob Barnetson

Alberta OHS consultation foreshadows weaker safety rules

Alberta is undertaking another consultation about its Occupational Health and Safety (OHS) laws. The OHS Act was last overhauled in 2017, more than 40 years after it was first enacted. According to the government website, the topics under review are how to:

• strengthen the Internal Responsibility System
• enable innovation
• clarify accountabilities

The rationale for the review is:

…some stakeholders raised concerns that the changes made the OHS requirements more prescriptive and burdensome, and introduced new processes that affect how OHS is addressed in Alberta workplaces and how government services and enforcement are delivered.

It is unclear who these concerned stakeholders were.

Narrator: It was employers.

The consultation document discusses reducing the regulatory. Based on the changes outlined in Bill 32 (affecting employment standards and labour relations), this most likely means loosening the rules, which will shift costs from employers to workers in the form of less safe workplaces and more injuries and deaths.

The survey touches on several topics and foreshadows changes. These include:

• Joint health and safety committees: These were introduced in Alberta in 2018. The questions hint at loosening the rules (which will make it easier for employers to subvert and ignore them) and eliminating the requirement for them in so-called low-risk workplaces.
• Right to refuse: There is discussion of limiting the right to refuse unsafe work if the refusal might endanger others (so good-bye right to refuse in healthcare). There is also discussion about reducing delays associated with addressing refusals. At a guess, I’d say we’re going to see refusals no longer continuing until an OHS officer investigates (if an employer fails to make the work safe).
• Enforcement: There is discussion of “increasing flexibility” in how to deal with noncompliance with the law. Since enforcement of OHS remains completely ineffective due to a lack of political will and resources, I’m not sure what case exists for increasing flexibility around noncompliance (which presumably would further reduce the incentive employers have to comply).
• Less prescriptive: There are questions that suggest making the Act less prescriptive. This undermines the whole logic of having OHS laws. We have prescriptive laws because, absent such laws, employers operate unsafely in order to reduce labour costs (usually to increase profits). Why on earth would you make a law less prescriptive if the result will be more workers will get injured and die?
• Advisory bodies: The consultation suggests the government would prefer to have fewer stipulated expert advisory bodies (e.g., the mining expert panel) and more flexibility to appoint panels and establish their scope of work. The absence of a clear problem that this problem would solve is concerning. This sounds like a way to further politicize advisory panels (i.e., stack them in favour of employer interests).
• Potentially serious incidents (PSIs): The 2017 changes to the Act required reporting of potentially serious incidents (i.e., near misses). The consultation suggests the definition of a PSI is unclear (it isn’t) and employers don't like the work extra reporting entails. The reason for PSI reporting is that they identify unsafe workplaces and industries that require greater enforcement attention before injuries and fatalities happen.

Overall, my expectation is that this consultation is simply window dressing for a weakening of Alberta’s injury prevention laws. A 2016 study found that 1 in 5 Alberta workers is injured on the job each year and 1 in every 10.5 is seriously injured. There is also widespread employer non-compliance with even the most rudimentary OHS obligations. If the United conservative government was keen on improving safety, they would enhance enforcement rather than weakening the law.

This review is open until August 12.

-- Bob Barnetson

Shaming OHS violators reduces violations and injuries

An interesting article out of the US suggests shaming employers for egregiously violating occupational health and safety laws increases compliance. More specifically, a single press release about a severe OHS violation has the same impact as performing an additional 210 inspections. The underlying dynamic appears to be employers move to comply to avoid action by employees.

Earlier research suggested that a press release results in 73% fewer violations among nearby peer firms. The compliance effect of this shaming is stronger than the effect of actually inspecting these workplaces! A part of this effect may be that the risk to a firm of fines (which are low value and rare) is relatively low, whereas the risk of financial consequences caused by bad publicity is relatively high. Shaming also appears to lead to fewer (reported) workplace injuries.

Firms may also respond to shaming because they wish to avoid their workers taking action upon learning about injury risks (e.g., quitting, demanding higher wages). This effect appears to occur when workers have more bargaining power (i.e., where unionization rates are higher). By contrast, where workers have little bargaining power, shaming has little or no effect. This makes sense: information is unlikely to affect worker behaviour if they have no real means of putting it to use.

This research suggests that shaming Alberta employers who are egregious OHS violators would hugely amplify the effect of existing inspections and, therefore, drive down the number of Albertans who are injured on the job each year. Alberta presently has a legislative framework that allows the government to shame employers who are egregious OHS violators. To date, no government (Conservative, New Democrat, or UCP) has pursued this approach.

-- Bob Barnetson

Labour & Pop Culture: Superstore Season 5

This year, the comedy Superstore once again canvassed a bunch of labour-related issues. At the end of the fourth season, Cloud9 was being unionized and the corporate offices collaborated with ICE to raid the store for undocumented workers and, thereby putting a chill the organizing drive.

The fifth season opened with the introduction of a cleaning robot, which raised (ultimately unfounded) fears about job loss due to automation. The employer also introduces a game-based app that allows the corporation to track the location of its workers.



The use of ICE to intimidate the union drive forms the basis for getting an undocumented worker out of jail. The worker then gets re-hired but, when his new employer finds out about his status, the worker is blackmailed into doing a bunch of extra work. Some of the workers use a gig-economy app to subcontract out some of their work to a very vulnerable worker.

The store’s union drive is successful. Bargaining goes well, but only because the store has been secretly sold and the agreement becomes null and void. The key organizer then becomes involved with the Raise the Wage movement.

An employee with a mental health issue returns to the store and stalks another employer. She is suspended. Upon return, no one wants to work with her. She’s eventually injured by the cleaning machine and rushed to the hospital.



For a light-weight comedy, Superstore does a reasonable job of staying topical and addressing real world dynamics in workplaces.

-- Bob Barnetson

Labour & Pop Culture: The English Game

Earlier this spring, I watched a mini-series on Netflix called The English Game. The story is set mainly in northern England in 1879 and (loosely) follows the first British working-class soccer team to win the FA Cup. Previously, the game was mostly the preserve of upper-class amateurs. Factory Owner James Walsh breaks the rules by hiring two Scottish ringers to play for his Darwen team and mayhem ensues.

The storyline is interesting because it foregrounds class differences, conflict and blindness. The organization that controls the FA Cup is very upper crust and is largely (and perhaps intentionally) blind to the advantages that the rules grant to those who are wealthy (mostly leisure time).

The factory owners (many of whom also run soccer teams on the side) are a mixed bag and continually grind the wages of the factory workers. This leads to a strike and violence (which is quickly repressed by the police and judiciary). The social services available for “fallen” women was also starkly depicted.

Soccer is presented as one of the few positive things in the lives of factory workers. The notion of soccer as bridging the class divide (without in any way upsetting it) was a bit heavy handed and galling. This gets papered over a bit with a story of the moral redemption of (eventual soccer big wheel) Arthur Kinnaird.

While period dramas are not my thing, this was an interesting (and short!) foray into the lives of upper- and lower-class people during the industrial revolution.

-- Bob Barnetson