Ontario employers failed to pay out $9M in owed wages in 2021, data suggests
Province acknowledges unpaid wages are an issue, says it's introducing measures to counter the problem
Simranjeet Kaur says she was already struggling to make ends meet when her employer allegedly didn't pay her the wages she was owed from her job at an Ontario transportation company.
The Brampton resident says she's owed a little more than $7,000 for four months of work.
That money is just a fraction of the approximately $9 million in owed wages that advocates say employers in Ontario failed to pay out in the 2021-22 fiscal year, according to the latest data from the Ministry of Labour and the Ministry of Finance. It was collected through freedom of information (FOI) requests by two Toronto-based organizations — Downtown Legal Services and Parkdale Community Legal Services.
Experts and those affected by wage theft are concerned that the exploitative practice of not paying employees has become the norm, and they worry it's getting worse.
Ontario's Ministry of Finance says it acknowledges that unpaid wages are an issue and is introducing measures to help counter the problem. Advocates say the provincial response is far from enough and that for some workers the measures come too late.
Kaur said without her wages, she had to resort to asking friends for help.
"For groceries, for rent, for my car instalments and insurance, everything was paid for by my friends," she said. "I asked them to help me out, and now, I am paying them back."
Naujawan Support Network, an Ontario-based group of immigrants fighting wage theft, pushes for stricter enforcement of rules compelling employers to pay workers the wages they're owed. They help people who register complaints about unpaid wages with the province and also those who file complaints at the federal level, such as Kaur.
In the just over two years NSN has been in operation, the migrant collective says it has recovered $323,209 in owed wages for 74 members. The group directly confronts employers accused of wage theft by delivering letters and staging protests, boycotts and social media pressure campaigns.
Growing concern wage theft becoming the norm
Anmol Sanotra, a member of NSN, says newcomers are more vulnerable when it comes to wage theft, but the problem affects everyone
"Interestingly, we have been contacted by everyone — not just international students or work permit holders, but even by citizens," he said.
NSN says the data obtained through FOI requests shows there has been a steep decline in the number prosecutions for non-compliance with the Ontario Ministry of Finance's orders to pay — down from 79 prosecutions in 2017-18 to 12 prosecutions in 2021-22. In 2020-21, prosecutions dipped to a low of two.
In a letter to the Ministry of Labour last month asking for a meeting to discuss wage theft, NSN said one trait that appears to unite these employers is their attitude toward the ministry.
"They regard the ministry as weak and ineffective — an institution that cannot enforce the orders it issues, and that will not prosecute employers who ignore the orders," the letter read.
Claims reached historic low during pandemic: ministry
According to the data interpreted by NSN, the number of investigations into employment standards completed by the ministry dropped by roughly 50 per cent from 2014 to 2021.
According to Sanotra, the group wanted to know why there was such a "shocking" drop. He said that when they eventually met with ministry officals late last month, they were told that the ministry was aware of unpaid wages being an issue, but didn't provide specifics about how it was being addressed.
He says if the ministry knows about wage theft, "it's their job to investigate and plug those loopholes that are being exploited by the employers."
The Ministry of Labour said in an email to CBC News that it has recovered more than $110 million in wages and other money owed to employees over the last five fiscal years.
"Employees are entitled to be paid for the work that they do and we investigate any and every claim for unpaid wages," the email said.
It said one reason for the declining numbers of completed investigations, and subsequently, the number of prosecutions, is that during the COVID-19 pandemic, it received a historically low number of claims.
According to a media statement released earlier this month, the ministry said its inspections have shown that multiple temporary agencies in Ontario are illegally paying people below the minimum wage and denying other basic employment rights to gain an unfair competitive advantage over law-abiding agencies.
As a step to counter this practice, the announcement says roughly 2,300 temporary help agencies and recruiters of temporary employees across the province will require a licence to operate as of Jan. 1, 2024.
While applying for the licence, the agencies will be required to submit $25,000 in the form of an irrevocable letter of credit that can be used to repay wages owed to employees.
More enforcement needed
Leah Vosko, a political science professor at York University who researches labour rights, says more needs to be done to ensure minimum employment standards are followed, especially as the cost of living rises.
"It's shocking to me that employees for whom there are orders to pay wages often don't receive their wages," she said via email.
Often, there aren't enough resources to make sure rules are enforced, Vosko said, adding that when those minimum standards aren't met, it can become something that's seen as normal and acceptable.
In Kaur's case, she says she knew something wasn't right.
She came to Canada from India in 2017 and started at Northedge Logistics, a transportation company in Caledon, Ont., in 2021. She says she worked there for two months before quitting.
Kaur alleges she wasn't paid any of her wages when she left, despite multiple efforts to get in touch with the employer.
"There was a lot of mental stress."
Pretty Grewal, director of Northedge Logistics, said via email that all allegations of wage theft were false.
"We haven't kept a single dollar for anyone, but in this case it's a matter of ethics, integrity, and the trust we put on them when we hire," Grewel's email said. "Now, they have put false allegations on us so we are dealing with the proper authorities."
What happens after a complaint is made
Kaur says her case has been under investigation for more than a year now under the Federal Labour Program.
The Labour Program, administered by Economic and Social Development Canada, said it couldn't comment directly on Kaur's case, citing confidentiality under Canada's Labour Code. However, the program's website explains that once federally regulated employees file a complaint, if it's found admissible, the Labour Program will investigate.
If the complaint is founded, the program contacts the employer and asks it to voluntarily pay wages owed. Failing that, the program can issue a payment order, a legal document filed in the Federal Court of Canada. This means it has the same effect as if it were a judgment obtained in that court.
The government publicly lists the cases where the total amount owed exceeds $5,000. Since 2020, there have been 41 employers with payment orders filed in Federal Court.
In an emailed statement, the Labour Program said it is "taking action against non-compliant employers who are short changing their employees through tactics like wage theft," the email said.
Scott Blodgett, spokesperson for Ontario's Ministry of Finance, said in an email that the ministry makes every effort to recover what's owed to claimants under the Employment Standards Act. If employers don't pay up, he said the ministry "may take legal actions to collect monies owing."
NSN's Sanotra says the government should be doing a better job.
"The ministry has the authority, it has the options," he said. "It's not our job to stand up against the employers."
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