Ontario’s Employment Standards Act Exempts Certain Business and Information Technology Consultants, if Conditions Are Met

As of January 1, 2023, certain “business consultants” and “information technology consultants” in Ontario have been exempt from the Employment Standards Act, 2000 (ESA). These exemptions are part of the numerous amendments made to the ESA following the enactment of Bill 88, Working for Workers Act, 2022.

Under the ESA, a “business consultant” is “an individual who provides advice or services to a business or organization in respect of its performance, including advice or services in respect of the operations, profitability, management, structure, processes, finances, accounting, procurements, human resources, environmental impacts, marketing, risk management, compliance or strategy of the business or organization.”

An “information technology consultant” is “an individual who provides advice or services to a business or organization in respect of its information technology systems, including advice about or services in respect of planning, designing, analyzing, documenting, configuring, developing, testing and installing the business or organization’s information technology systems.”

A business consultant or information technology consultant will be excluded from the ESA if they meet all four of the conditions below:

1. The consultant provides services through either:
   1. a corporation within the capacity of a director or shareholder who is a party to a unanimous shareholder agreement; or
   2. a sole proprietorship, through which the consultant provides services using a business name registered under the Business Names Act.
2. The consultant’s services are provided through a written agreement that sets out the amount of pay owed to the consultant, and the timing of such payment. The payment itself “must be equal to or greater than $60 per hour, excluding bonuses, commissions, expenses and travelling allowances and benefits, or such other amount as may be prescribed, and must be expressed as an hourly rate.”
3. The consultant is paid in accordance with the terms contained in a written agreement.
4. The consultant meets “[s]uch other requirements as may be prescribed.”

As of January 1, 2023, persons who may have previously been subject to the provisions of the ESA may now be exempt if they meet the definition of “business consultant” or “information technology consultant,” as well as all four requirements prescribed in the ESA.

Ontario employers may want to review the definitions above to determine whether individuals currently treated as subject to the ESA may be exempt. Exempt individuals are not subject to the ESA’s minimum standards and protections with respect to hours of work, overtime, leaves of absence, and termination entitlements, among other provisions.

Ogletree Deakins’ Toronto office will continue to report on developments with respect to the Employment Standards Act, 2000 and will post updates on the Cross-Border blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.