Paper Tigers: Why is the Ministry of Labour Ignoring Wage Theft?

Wage theft is an ongoing problem in the across Ontario's labour market. This is a major issue that has been ignored by the Ministry of Labour for far too long. This post is going to analyze three concrete examples of wage theft in the lower end of the labour market and what's not being done to stop it.

Example One: Gas and Dash Deaths

Victim: Jayesh Prajapati

This is perhaps the highest profile example of wage theft in recent memory. Shell gas station attendant Jayesh Prajapati was killed after being dragged by a car driven by a thief who had stolen $112.85 worth of gas. Now why would an employee put themselves in harms way over that amount? Well, it's a common practice in the industry to charge employees directly after a theft. This is a direct violation of Ontario's Employment Standards Act, 2000 ("the ESA") which prohibit deductions of this nature.

Now, there's a simple solution that can virtually eliminate the problem of gas and dash: pre-paying for your gas. British Columbia implemented this type of legislation in the wake of the tragic death of Grant De Patie and it has been working; however, the oil and gas industry doesn't like laws of this nature because it cuts down on impulse purchases by consumers. 

Curiously, Minister of Labour Linda Jeffrey seemed to parrot the oil and gas industry's line when she said: "What we learned from that was there are significant concerns from stakeholders about the feasibility of the pay-at-the-pump laws. Other jurisdictions have not seen the expected results or uptake after passing the legislation." But how did she know the position of the oil and gas industry? Well, last year Atifeh Rad, a gas station attendant in Mississauga, died after being dragged by a car driven by a thief who stole gas.

There was an explicit decision within the Ministry of Labour not to pursue implementing preventative legislation after the first death, but now that decision has been removed from their purview after MPP Mike Colle put forward a high-profile private member's bill aimed at eliminating gas and dash deaths and doing exactly what Linda Jeffrey scoffed at. Frankly I don't understand why the industry's concerns were taken seriously given the sky high gas prices and the fact that this is a problem that the industry created itself through systemic violations of the provisions in the ESA banning deductions for theft. Is the death of a worker acceptable when there's a fool-proof, low-cost solution available?

Example Two: Tip Theft in the Restaurant Industry

Linda Jeffrey: Soft on theft, soft on death.

I have a lot of friends who work in the restaurant industry and they're frequently subjected to all manner of abuse, assault, and other arbitrary punishment in the course of their employment. A particularly insidious (and commonplace) practice is management taking a cut of their employee's tips out of pure greed. This problem disproportionately impacts young people who often take serving jobs to pay for school or as a second job to make ends meet (at a reduced minimum wage too, i.e. $8.90 vs. $10.25, which may violate the Charter, but I digress).

MPP Michael Prue put forward a private member's bill earlier this year to address the practice of tip dipping earlier this year. At first Linda Jeffrey didn't like the proposed legislation and indicated that she had no concerns with the practice of tip dipping stating that "I think that they need to have that relationship clear at the very beginning of the employment history. We want employers to treat their employees fairly and if they are not treated fairly they should speak to the Ministry of Labour. When you are a good server, it's a very competitive environment. You can go where you get the best deal." Is anyone else detecting a trend here?

This story had a happy ending though when Premier Dalton McGuinty realized the blunder his junior minister had made and then proceeded to hang her out to dry stating that: "I think the NDP has put their finger on an important issue. I've given that advice to the minister." Michael Prue's bill remains on the order paper at Queen's Park and will be moving forward this fall, but it remains to be seen whether the Ministry of Labour is beginning to realize the seriousness of this issue.

Example Three: Misclassification of Interns

Unpaid internships represent a massive source of wage theft in the youth labour market (I'm not talking about internships part of an academic program either, that's a different can of worms). The wage theft in this area operates a bit differently than the previous two examples insofar the wage theft occurs via misclassification rather than directly stealing wages from the employee, but it's far more insidious and damaging to the labour market overall. 

Employers looking for cheap labour have stumbled upon a vicious loop-hole in unpaid internships whereby they simply assert (falsely, of course) that the person is an intern rather than an employee and then proceed to deny them entitlements flowing from the ESA. Voila: no need to pay wages; no deductions for payroll taxes; and, you can fire the intern with immunity (i.e. at-will employment). Unpaid internships literally take some the worst aspects of employment law developed over the last five hundred years and roll them into a neat employer friendly package.

Much like the previous two examples it's clear that the Ministry of Labour has no interest in taking any sort of action in addressing this issue, but they should. Here's why: employers are getting free labour and not hiring actual employees thereby increasing unemployment; the Federal and Provincial government are losing out on contributions for CPP, EI, income tax, and WSIB; young people are losing out on wages thereby depressing the overall economy; and, it's denying many young people from lower socio-economic backgrounds access to white collar industries that require people to engage in unpaid work as a prerequisite for paid employment (i.e. journalism, fashion, public relations, dietitians).

The problem with unpaid internships is that the misclassification that inevitably occurs contributes to a stubbornly high youth unemployment rate in Ontario and strikes at the heart of intergenerational equity. Unless ameliorative measures are undertaken by the Ministry of Labour to address this issue the problem will continue to spiral out of control as the misclassification grows more pervasive within the labour market.

Further Reading: Low-End Theory

If you want to learn more about wage theft and precarious work in Ontario's labour market take a look at these resources: Toronto's Workers' Action Centre's reports about wage theft (see: here and here); the Law Commission of Ontario's vulnerable workers interim report; and, this article about wage theft against nannies in Toronto. Finally, check out this fascinating video about wage theft, see: