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What to Expect When You are Expecting… an Employment Standards Audit


Dentists who employ staff of any number, from 1 to 100 or more, must follow the rules of the Employment Standards Act (ESA) for each province. Knowing the rules that employers must follow as well as the rights and obligations of the employees will help to protect the dentist from unnecessary liability if you need to terminate an employee. If termination is done incorrectly, or an employee’s rights are violated, the employer could end up paying out thousands of dollars to the employee and perhaps face significant fines payable to the provincial government.

The Employment Standards Act is a that law establishes minimum employer obligations and employee rights with respect to rates of pay, hours of work and overtime, vacations, public holidays, leaves of absence and more. Every province has similar laws in place to protect employees. The ESA applies to all employees and employers and compliance with this law is mandatory.

The ESA is enforced by employment standards officers who visit businesses to help educate employers on their obligations and ensure that employees’ rights are being protected.
Employment standards officers proactively visit businesses even if no complaint has been filed by an employee. These officers will help you correct areas where your business is not complying with the ESA.

Employment standards officers usually provide advance notice of a visit. They will review your records and speak to you and your employees. If there are issues of non-compliance, they will discuss these with you and depending on the nature of the violation, they may provide an opportunity to correct them before taking enforcement action.

Each year, hundreds of prosecutions are brought against employers for violating the ESA.
Some prosecutions have resulted in fines and/or court orders of tens of thousands of dollars or more. Where the employer is an individual, rather than a corporation, he or she can also face jail time. In addition, directors of corporations can be held personally liable for their company’s violations and can also face monetary penalties and jail sentences. In the long run, these penalties cost businesses much more money than compliance. Some names of convicted employers and directors are posted on the Ministry of Labour’s website.

The role of an Employment Standards Officer is to conduct inspections and investigations.
Employment Standards Officers travel all over the province to inspect workplaces. These inspections make sure employers are complying with their responsibilities under the Provincial Employment Standards Act. Officers focus on standards such as:

Posting the Employment Standards poster in the workplace and distributing it to employees
• Ensuring that wage statements are timely and accurate with no unauthorized deductions
• Accurate record keeping
• Proper hours of work and eating periods

• Accurate overtime pay

• Adherence to minimum wage

• Public Holidays and Vacation Pay standards

• Restricting Temporary Help Agencies from charging fees to employees.

The inspectors will typically give an employer 10 days written notice when that inspection will take place. This gives the employer an opportunity to make their records available. It also gives the Ministry of Labour time to do their preparation. They will check the legal name of the business, whether it is still active, and look at their claims and inspections history. They will also check to see if the workplace is unionized.
Workplaces are selected through a variety of methods. These may include third party information, local intelligence, or just through random selection as part of a sector-specific enforcement blitz. In some cases they may also re-inspect a workplace to ensure that past violations have been corrected.

What should you have prepared?

During an inspection the Employment Standards Officer will take a look at a number of records which may include; schedules, time sheets, payroll ledgers and wage statements. The notice that they send out to employers also indicates important information about the Employment Standards poster.

What to expect during the inspection

The procedure is that they arrive at the workplace and meet the employer or their authorized representative. They review a variety of documents that relate to the Employment Standards Act. Beginning with an employer interview to determine compliance with the ESA. The inspector will take time to answer any questions an employer may have about their responsibilities.

During the inspection, they will ask the employer to show them where in the workplace they have posted the Employment Standards poster to make sure the poster is correct and it’s in a conspicuous place for the employees to see.

Employee Interviews

The inspector will also interview employees selected at random. If the inspector has reason to believe that there is not going to be adequate privacy to properly interview employees, he/she will make that known to the employer and let the employer know that they require a place that is comfortable, and that is isolated from the rest of the workforce or work environment.

Documents needed

During the inspection some documents are going to be required from the employer to prove the various standards are being complied with. The inspector will then use the documents provided by the employer to perform a test audit. The test audit involves the selection and review of payroll and other records. They randomly select employees to determine that at least the minimum standards are being met.

When the test audit is finished, if they find there is compliance with all standards that were inspected, they will then issue an inspection report which outlines the steps that they took and the findings they have made. The file is then closed.

What if problems are discovered?

If problems are found at the inspection and if it’s been found that an employer has contravened the Employment Standards Act, a full-audit or self-audit may be conducted for a set period of time. If it is determined that the employer has contravened the ESA they may take enforcement actions such as: issuing a ticket, issuing a Notice of Contravention or in some cases recommending a Part Three prosecution under the Provincial Offences Act.
When the audit is completed, the employer is asked to voluntarily comply and correct any of the issues that were identified during the inspection. If wages are owed to employees they will ask the employer to pay those wages. If the employer does not comply voluntarily, they will issue an order to pay for the amounts that are outstanding.
When the inspection is completed, the officer will provide the employer with an inspection report which is required to be posted. The employer is asked to complete a Notification of Compliance indicating the dates upon which compliance has been achieved. When the notification of compliance form is returned to the officer the inspection is closed; however, the employer can be identified for a re-inspection at a later date to still ensure compliance.

For information on how we can help your dental office become compliant with the Employment Standards Act for your province, please send an email to sandiedocs@gmail.com with the subject line “ESA info” or call DOCS at 905-336-7624 ext. 200.

source: Ministry of Labour website
Sandie Baillargeon

About author
Sandie Baillargeon is a leading authority on how to increase the effectiveness of medical and dental business systems. Ms. Baillargeon is author of two text books, Dental Office Administration and The Canadian Dental Office Administrator, published by ITP Nelson Canada. Sandie is the owner and operator of Dental Office Consulting Services, which specializes in dental business planning, staff development, consulting and continuing education seminars. Visit her website at www.dentalofficeconsulting.com or contact her directly at (905) 336-7624.
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