cross-posted from: https://sh.itjust.works/post/48217272

Archive link: https://archive.ph/jCEl2 Link to report: https://www.justice4workers.org/new_report_on_wage_theft

In the past decade, nearly $200 million in unpaid wages have been formally assessed as owed to workers, according to a new report from the Workers’ Action Centre, an organization advocating for workers’ rights, based on freedom-of-information data.

When employers fail to comply with a Ministry of Labour order to pay within 30 days, the case is referred to Ontario’s Ministry of Finance, which was only able to recover less than a quarter of the $102.4 million sent for collections between 2013 and 2023, leaving workers still owed $79.9 million in stolen wages, according to the government data. … Ontario’s wage recovery flaws Ojeda’s case highlights the limits of Ontario’s wage recovery system, which advocates say has struggled to keep pace with modern employment practices as fines, workplace inspections and enforcement have declined over the past decade. “When there is a low likelihood of detection and the penalties for noncompliance are minimal, the incentive to commit wage theft is high,” the Wokers’ Action Centre report says. Employer prosecutions have plummeted in recent years, according to government data.

In 2024, the Ministry of Labour initiated only 12 Part III Prosecutions — a type of penalty with the most potential to deter employers from violating employment standards because it can result in a hefty fine or even jail time — down 85 per cent from 2017 despite widespread non-compliance with orders to pay.

Meanwhile, proactive enforcement has also declined.

When Premier Doug Ford took office in 2018, the Labour Ministry instructed staff not to initiate any new proactive inspections aimed at preventing wage theft and other employment standards violations.

Employment standards inspections deal with basic workplace issues such as unpaid wages and overtime. Proactive inspections, which are initiated at the behest of the ministry, are far more effective at recovering unpaid wages, including public holiday pay and overtime, than when individual workers file complaints, according to the ministry’s own data. Workplace inspections started to plummet before the pandemic and are 77 per cent lower than they were around seven years ago, government data shows.

At the same time, the number of permanent employment standards officers has decreased. In 2023, only 115 officers were working across the province, down from 209 in 2018, even as Ontario’s workforce grew by 16 per cent since 2014.

The Ministry of Labour declined to respond to inquiries on why enforcement has eroded in recent years and what is being done to hold employers accountable and prevent increasing incidents of wage theft. Questions instead were referred to the Ministry of Finance, which did not get back to the Star before publication.

There is also a deeper structural problem contributing to rampant wage theft in the province, according to Bedard: Ontario’s labour laws have not kept pace with changing business practices and the rise of multi-party employment relationships. Rather than the traditional direct employer-to-employee relationship, today’s companies are increasingly adopting business structures that limit their liability for the employees who make their products or provide their services, relying on strategies such as subcontracting, franchising, third-party management or misclassification of employees.

These structures can obscure who is legally liable for unpaid wages.

“Employers try to hide behind the corporate veil to avoid responsibility,” Bedard said.