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CEO-Worker Pay Ratios: CEO – Worker Pay Gap Resources

CEO-Worker Pay Ratios: CEO – Worker Pay Gap Resources

Since 2018, U.S. publicly held corporations have had to annually report the ratio between their CEO and median worker compensation. Corporate lobby groups and allied Republicans fought hard to repeal, delay, or water down this disclosure mandate, a measure initially enacted as part of the 2010 Dodd-Frank financial reform legislation. But institutional investors weighed in […]

Ontario Court Rules Severance Pay Is Based on Global Payroll

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Ontario Court Rules Severance Pay Is Based on Global Payroll

​Ontario’s Divisional Court—a branch of the Superior Court of Justice in Canada’s largest province—unanimously ruled in June that more employers in Ontario will now have to take their global payroll into account in determining an employee’s entitlement to severance pay.According to the Ontario Employment Standards Act 2000 (ESA), employers in the province with a payroll of more than $2.5 million must compensate an employee for the loss of a job with five or more years of service to the company upon termination, explained Hilary Page, a lawyer with SpringLaw in Toronto. In the Hawkes v. Max Aicher (North America) Ltd. case, the Divisional Court overturned an earlier Ontario Labor Relations Board decision that the Can$2.5 million (approximately 1.98 million USD) threshold was limited to an employer’s Ontario payroll.”Prior to the Hawkes decision, employers could take the position that the payroll criteria only applied to payroll within the province of Ontario,” said Darren Avery, an attorney with Filion Wakely Thorup Angeletti LLP in London, Ontario. “This meant an employer could avoid paying severance pay if they only had a small operation in Ontario—and thus a payroll of less than $2.5 million.” The Hawkes decision changed that stance, Avery continued. “The court gave a clear signal it will consider an employer’s global payroll—whether it be from a different province or even a different country—in determining whether the statutory $2.5 million threshold is met.”Under the ESA, a notice of termination caps out at eight weeks, while severance pay can be issued up to 26 weeks, Page said. “Most employees are entitled to more than the amounts in the Employment Standards Act,” said Stephen Wolpert, an attorney with Whitten & Lublin in Toronto.Employers now need to reconsider their obligations when firing employees, Wolpert stated. The court decision will also increase termination and severance costs for many employers in Ontario.”As a result, some larger companies who had small operations and small payrolls in Ontario may have previously thought they were exempt from paying statutory severance pay,” Wolpert added. “Now it is clear that they will not be exempt.”Case BackgroundThe plaintiff worked for a Hamilton, Ontario-based subsidiary of European steel company Max Aicher until 2015 when his employment was terminated without cause.Fired employees have long been entitled to various protections under Ontario’s ESA, Wolpert stated.The plaintiff then filed a complaint with Ontario’s Ministry of Labor, claiming he was entitled to termination pay, vacation pay and severance pay based on Max Aicher’s global payroll. The Germany-based manufacturer’s global payroll far exceeds $2.5 million, Page noted.  Initially, an employment standards officer reviewed the claim in 2017, granting the employee termination and vacation pay. The officer also determined the plaintiff was not entitled to severance pay because his former employer did not have a payroll of at least $2.5 million in Ontario. The Ontario Labor Relations Board agreed with the employment standards officer’s decision in 2018, reiterating that payroll for the purposes of severance pay under the ESA was limited to an employer’s Ontario payroll. The plaintiff then appealed this decision.”The road to this decision was long,” Page said. …

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