Unpaid Wages — Ontario Employment Law
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About Unpaid Wages
Receiving your earned wages in full and on time is one of the most fundamental rights of any employee in Ontario. When an employer fails to pay what is owed, it's not just an inconvenience—it's a violation of the law. The term 'unpaid wages' covers more than just your regular salary or hourly pay. Under Ontario's Employment Standards Act, 2000 (ESA), 'wages' include salary, hourly earnings, overtime pay, vacation pay, public holiday pay, commissions, and certain types of bonuses that are non-discretionary.
If you find yourself in this situation, Ontario law provides two primary pathways for recovery. The first is filing a claim with the Ministry of Labour (MOL). This is an administrative process designed to be accessible without a lawyer, ideal for straightforward claims. An Employment Standards Officer will investigate and can order the employer to pay. However, be aware that the MOL can only order recovery of wages due within the two years prior to your claim, and there is a monetary cap on the amount an officer can order (currently $35,000).
The second option is to commence a civil lawsuit. This path is typically taken for more complex situations, especially when unpaid wages are part of a larger issue like a wrongful or constructive dismissal. For instance, a persistent failure to pay a significant portion of your wages could be grounds for a constructive dismissal claim. While a lawsuit is more complex and costly, there is no monetary cap on recovery, and you can claim for other damages simultaneously. In unique cases, such as when a company becomes insolvent, the Ontario Business Corporations Act (OBCA) may even allow employees to pursue company directors personally for certain unpaid wages. Choosing the right path depends heavily on the amount owed and the specific circumstances of your employment termination, making an assessment of your unique situation critical.
Frequently Asked Questions
What legally counts as 'unpaid wages' in Ontario?
Under the Employment Standards Act (ESA), 'wages' are defined broadly. They include your regular salary or hourly rate, overtime pay, vacation pay, public holiday pay, commissions, and non-discretionary bonuses that are tied to your hours of work or production.
My employer didn't give me my last paycheque after I quit. When do they have to pay me?
According to the ESA, your employer must pay all outstanding wages, including vacation pay, no later than seven days after your employment ends or on what would have been your next regular payday, whichever is later.
How long do I have to file a claim for unpaid wages in Ontario?
You have two key deadlines. You have two years from the date the wages were due to file a claim with the Ministry of Labour. Alternatively, you generally have two years from the date you discovered the loss to start a civil lawsuit in court.
Can my employer deduct money from my pay for a mistake I made?
Generally, no. The ESA prohibits employers from deducting wages for things like faulty work or cash shortages unless you have provided a specific, written authorization to repay that exact amount after the loss occurred. A blanket clause in your employment contract is usually not sufficient.
What's the difference between filing with the Ministry of Labour and suing in court for unpaid wages?
A Ministry of Labour claim is a faster, government-run process with no legal fees, but it's capped at $35,000 in recovery. Suing in court has no monetary cap and can address more complex issues like constructive dismissal, but it is a more formal, lengthy, and potentially expensive process.
Can I sue the company's directors personally if the business can't pay my wages?
In certain circumstances, yes. The Ontario Business Corporations Act (OBCA) makes directors personally liable for up to six months of unpaid wages and up to 12 months of unpaid vacation pay if the corporation is unable to pay. Certain conditions must be met to pursue this.
When should I consult an employment lawyer about my unpaid wages?
You should consider consulting a lawyer if the unpaid amount is substantial, if non-payment is part of a larger pattern of mistreatment, or if you have been terminated. A lawyer can help you decide whether a Ministry claim or a civil lawsuit is the better strategy for your specific case.
Common Scenarios
- A sales representative is terminated and their employer refuses to pay out a large commission that was earned before the termination date, claiming it's only payable if they are still employed.
- A construction worker's employer is consistently two to three weeks late with payroll, causing the worker significant financial stress and late fees on personal bills.
- Upon quitting, a graphic designer receives a final pay stub that is missing payment for 10 days of accrued but unused vacation time.
- A restaurant manager is told their annual performance bonus won't be paid because the business is 'having a tough year,' even though the bonus is a formula-based part of their written compensation package.
- An employee on a fixed-term contract is let go three months early, and the company only pays them up to their last day of work, not for the remainder of the contract as stipulated.
What You Should Know
- Keep meticulous records of your hours worked, pay stubs, and your employment contract. If you communicate with your employer about missing pay, do so in writing (like email) to create a paper trail.
- Be aware of the two-year limitation period. Whether you plan to file a Ministry of Labour claim or a civil lawsuit, you must act within two years of when the wages were owed.
- Understand that you must choose one path. Under Ontario law, you cannot file a claim with the Ministry of Labour and also sue your employer in court for the same unpaid wages.
- Before accepting a final payment, ensure it includes all entitlements. This includes regular pay, overtime, banked time, vacation pay, and any other earned compensation.
- If the non-payment of wages is significant and forces you to consider quitting, speak with an employment lawyer first. You may have a claim for constructive dismissal, but resigning without legal guidance can be risky.
Featured Cases
Seepersaud-Singh v. Pet Social
2023 ONSC 4174 (CanLII) · 2023-07-18Unpaid Wages, Overtime, and Vacation Pay: Seepersaud-Singh v. Pet Social
A case where a plaintiff claimed she was an employee of Pet Social Inc. and sought unpaid wages, overtime, and vacation pay. The court awarded damages for unpaid wages, overtime, and vacation pay, dismissed claims for unjust enrichment and constructive trust, and denied requests for aggravated and punitive damages.
Osmani v. Universal Structural Restorations Ltd.
2022 ONSC 6979 (CanLII) · 2022-12-09Constructive Dismissal and Workplace Harassment: Damages Awarded
A constructive dismissal case where an employee resigned due to an abusive workplace environment, including harassment and unsafe conditions. The court found the employer failed to address these issues, leading to damages for wrongful dismissal, including aggravated and punitive damages. The case also involved battery and assault claims, human rights violations, and unpaid wages. The human trafficking claim was dismissed.
. Corbo v Cura-Can Health Corp.
2022 ONSC 3279 (CanLII) · 2022-05-31Wrongful Dismissal: Unpaid Wages and Vacation Pay Under ESA
A wrongful dismissal case involving unpaid wages and vacation pay, with a focus on the limitation period under the Employment Standards Act, 2000. The court will determine the applicable limitation period for claims related to unpaid wages and vacation pay.
Ricci v. Chippingham Financial Group Ltd., et al
2017 ONSC 6958 (CanLII) · 2017-11-23Wrongful Dismissal: Unpaid Wages and Directors' Liability Under ESA
A wrongful dismissal case where the plaintiff sought damages for unpaid wages under the Employment Standards Act, 2000 (ESA) and Ontario Business Corporations Act (OBCA). The court upheld the Master’s decision on the relevance of financial documents and interpreted statutory provisions regarding directors' liability for unpaid wages. The plaintiff was awarded $15,000 in costs.
El Ashiri v. Pembroke Residence Ltd.
2015 ONSC 1172 (CanLII) · 2015-02-23Constructive Dismissal: Summary Judgment for Unpaid Wages and Damages
A constructive dismissal case where hotel managers sought summary judgment for unpaid wages and related damages. The court granted summary judgment due to non-payment of wages over extended periods, but denied punitive damages for the defendants' conduct.
Gill v. CPNI Inc.
2014 ONSC 6500 (CanLII) · 2014-11-10Unpaid Wages and Vacation Pay: Court Awards Compensation
A case involving unpaid wages and vacation pay, where the court accepted the plaintiffs' calculations and rejected the defendants' deductions under the Employment Standards Act (ESA). The court also ruled that a director could not be held personally liable for unpaid wages and that a counterclaim did not justify a stay of enforcement of the wage judgment.
Loat v. Howarth
2011 ONSC 460 (CanLII) · 2011-01-25Employment Standards Act: Unpaid Wages and Summary Judgment
A civil procedure case involving a motion for partial summary judgment for unpaid wages under the Service Agreement and a motion for a stay of proceedings based on an exclusive jurisdiction clause in the Shareholders' Agreement. The court must determine if the Employment Standards Act applies, whether the claims should be severed, and if the proceedings should be stayed.
Rejdak v. Fight Network Inc.
2008 CanLII 37909 (ON SC) · 2008-07-29Wrongful Dismissal: Employee Awarded 4 Months Notice After 3-Month Employment
A wrongful dismissal case where the plaintiff was dismissed after less than three months of employment. The court awarded four months’ notice based on the Bardal factors, and also ruled on issues of mitigation of damages, entitlement to benefits during the notice period, and unpaid wages for the first week of employment.
Bagrianski v. Aero Surveys Inc.
2004 CanLII 26914 (ON SC) · 2004-04-22Employee vs. Contractor: Unpaid Wages and Director Liability Case
A labour and employment case addressing whether the plaintiff was classified as an employee or independent contractor under their contract with Aero Surveys Inc. The case also examines unpaid wages, director liability under the OBCA, and the application of limitation periods. The court analyzed the nature of the relationship using the Sagaz test and considered evidence regarding the resignation date and credibility of testimony.
Stoody v. Kennedy
2003 CanLII 18765 (ON SC) · 2003-11-05Employment Relationship and Commission Entitlement Case
A case involving the employment relationship between a plaintiff and a subsidiary, where the parent company was found to be a common employer. The plaintiff also disputed commission entitlement and sought unpaid wages, with directors held liable under the Manitoba Corporations Act. The court ruled on issues of common control, commission interpretation, and liability for unpaid wages.
Re Grottoli v. Lock & Son Ltd.
1963 CanLII 142 (ON SC) · 1963-03-27Vacation Pay Dispute: Employee Sues for Unpaid Wages Under Collective Agreement
A merits decision involving a dispute over unpaid vacation pay under a collective agreement. The employee claimed unpaid vacation pay, while the employer argued that s. 34(1) of the Labour Relations Act barred court action. The court held that the common law employer-employee relationship was not abrogated by the collective agreement and that employees may sue for unpaid wages in court.
Rogers v. Wood
1912 CanLII 1157 (ON SC) · 1912-05-08Unpaid Wages Case: Employment Status and Section 94 of the Companies Act
A case involving a dispute over unpaid wages under section 94 of the Companies Act, where the plaintiff obtained a default judgment against a company and sought to enforce it against the directors. The case also addresses whether the plaintiff was classified as a 'labourer, servant, or apprentice' or a foreman/contractor, and whether affidavit evidence without direct knowledge can support a motion for summary judgment.