Ontario, Canada: Employer Sentenced to 30 Days in Prison for Nonpayment of Wages

The former owner of two defunct businesses has been sentenced to 30 days in prison for nonpayment of more than $125,000 in wages owed to 43 employees. The employer was convicted of failing to comply with an Order to Pay made by the Ministry of Labour in 2015. In addition to the prison term, the employer was fined $20,000 for failure to comply, and assessed a 25% victim fine surcharge under the Provincial Offences Act.

Under the Employment Standards Act, 2000 (“ESA”), a person who fails to comply with an order may be jailed up to 12 months and fined up to $50,000 personally. A corporation can be fined up to $100,000 for a first offence, up to $250,000 for a second offence; and up to $500,000 for a third or subsequent offence.

Prison time for such offences in Ontario is rare, with fewer than 10 sentences imposed on employers in the last 20 years.

This 30-day sentence comes at a time when the Ontario Ministry of Labour has committed to increasing enforcement of the ESA, including the hiring of 175 new employment standards inspectors, double the current number, by the year 2021. Meanwhile, the Toronto Star reports that prosecution of employers for workplace violations has risen by more than 40% since 2015.

In addition, on June 1, 2017, the Ontario Legislature unanimously passed the first reading of Bill 148 (The Fair Workplaces, Better Jobs Act, 2017) amending the ESA and the Labour Relations Act, 1995. The Ministry of Labour plans to launch a significant education campaign and provide compliance assistance on ESA obligations for new employers and small- and medium-sized businesses in particular.

The employer in this case has filed an appeal challenging the conviction.

Stay tuned. 

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.