Homeworkers

To Whom Does This Apply?

This document is based on information from the Ministry of Labour's Web site at http://www.labour.gov.on.ca/english/es/factsheets/fs_homeworkers.html (last updated July, 2006).

This Fact Sheet is provided for your information and convenience only.  It is not a legal document.  For further details, consult Employment Standards Act Publications.  For complete information, refer to the Employment Standards Act, 2000 and its regulations.

Before you read this document, please read the How Are You Covered by the ESA? and find out if the ESA applies to you.

Summary

What are homeworkers?
Homeworkers are employees who do paid work out of their own homes for an employer (e.g. online research, preparing food for resale, sewing, telephone soliciting, manufacturing, word processing).

Independent contractors are not homeworkers under the ESA.

Are homeworkers the same as domestic workers?
No, homeworkers are not the same as domestic workers.  Homeworkers do paid work out of their own homes for an employer.  In contrast, domestic workers work in a private home directly for the person who owns or rents the home.  They do things such as housekeeping and cooking, or provide care, supervision or personal assistance to children or people who are elderly, ill or disabled.

Here is an example of the difference between homeworkers and domestic workers: employees who prepare food at home for resale by their employer are homeworkers, but employees who prepare food in a private residence for the people living there to eat are domestic workers.

What rights do homeworkers have under the ESA?
Homeworkers are eligible for:

Regular payment of wages means that there is a recurring pay period and a recurring payday with wages paid out at the workplace or another agreed to location, and written wage statements are provided on or before each payday.

Note: there are rules about qualifying for some of the ESA protections listed above.

This fact sheet provides a brief overview of a homeworker's rights regarding minimum wage, overtime, hours of work and rest/eating periods, public holidays, vacations, written job details and records employers must retain.

For further information:
visit the Web site:
Employment Standards Act Publications
http://www.labour.gov.on.ca/english/es/es_pubs.html

What is the minimum wage rate for homeworkers?
There is a special minimum wage for homeworkers.  A homeworker is entitled to wage that is 110% of the general minimum wage rate. 

Note: This wage applies to all homeworkers whether they are full-time or part-time, or students under 18 years of age.

This extra pay is to cover employees' costs in providing their own workplace (e.g. electricity, heat, space).
Minimum wage is the lowest hourly wage an employer can pay employees.

If homeworkers are paid piece-work rate, how do they know whether they are receiving the equivalent of  minimum wage?
The amount that a homeworker is paid must be at least equal to minimum wage.  Homeworkers who are paid by piece-work rate-a way of calculating pay that is based on the amount of work an employee completes, and not on the hours worked-can calculate whether they are being paid at least minimum wage in the following way:

• Take the total amount earned over a pay period and divide it by the number of hours worked in the same period.

Please see "What written job details must an employer give a homeworker?" below for information on the requirement that homeworkers' wage statements include the amount of the piece-work rate(s).

Do homeworkers get overtime pay?
Most employees, including homeworkers, must receive overtime pay for each hour worked in excess of 44 hours in a work week.  See the chart in the "How are You Covered by the ESA?" Fact Sheet at http://www.labour.gov.on.ca/english/es/factsheets/fs_covered.html for jobs with exceptions to the usual overtime rules.

Overtime pay is at least 1½ times the employee's regular rate of pay (this is often called "time and a half.").  The "regular rate" of an employee who is paid a piece-work rate is calculated by dividing the wages earned in a work week by non-overtime hours worked in that week.

An employee and an employer can agree in writing that the employee will receive paid time off work instead of overtime pay.  In this case, the employee must be given 1½ hours of paid time off work for each hour of overtime worked.  The paid time off must be taken within three months of the work week in which it was earned or, if the employee agrees in writing, within 12 months of that work week.

Overtime pay is calculated on a weekly basis.  An employee and an employer may agree, in writing, to average the employee's hours of work for a period of not more than four weeks, for the purpose of calculating the employee's overtime entitlement.

If an employee's job ends before he or she has taken the paid time off, the employee must receive overtime pay for the overtime hours worked no later than the later of seven days after the date the employment ended, or on what would have been the employee's next payday.

Note: If certain conditions are met, an employer may average hours for overtime purposes before an approval is received from the Director of Employment Standards.

For further information:
visit the Web site:
Hours of Work and Overtime Fact Sheet
http://www.labour.gov.on.ca/english/es/factsheets/fs_hours.html 

What happens with agreements to average hours for overtime purposes that were in place before the law changed on March 1, 2005?
Prior to March 1, 2005, employees and employers could enter into averaging agreements for the purposes of determining overtime entitlements but only agreements to average over periods of four weeks or longer required the approval of the Director of Employment Standards.  Averaging agreements entered into under the law as it read before March 1, 2005 and that have not expired or been revoked continue to be valid agreements on and after March 1, 2005.  However, as of that date, employers with overtime averaging agreements were required to obtain an averaging approval from the Director of Employment Standards.  (Approvals given before March 1, 2005 for averaging agreements for four weeks or longer, were terminated as of February 28, 2005 and a “new” approval is required.)

Can homeworkers agree not to get overtime pay?
No, a homeworker and employer can't agree that the homeworker will give up the right to overtime pay.  Overtime is an entitlement under the ESA, and this legal entitlement can't be given up.

In addition, employers can't reduce a homeworker's regular rate to avoid paying time and a half pay after 44 hours in a work week.  For example, if Josée's regular rate is $12.00 an hour, her employer can't drop her regular rate to $8.00 an hour and then pay her 1.5 times $8.00 an hour for overtime hours worked.

What are the maximum hours of work for homeworkers?
For most employees, including homeworkers, the maximum number of hours they can be required to work is:

• eight hours a day; or
• the number of hours in an employer's established regular work day that is more than eight hours; and
• 48 hours a week.

These hours of work maximums may be exceeded by written agreement between the employee and employer.  However, an agreement to work more than 48 hours a week is not valid unless, prior to making the agreement, the employer gives the employee the Information Sheet About Hours of Work and Overtime Pay prepared by the Ministry of Labour’s Director of Employment Standards that describes the hours of work and overtime rules in the ESA.  Generally, the employer must also obtain an approval from the Director of Employment Standards before employees may work more than 48 hours in a work week.  However, if certain conditions are met, the employee may work those excess hours to a maximum of 60 hours per week before the approval from the Director is actually received.  Generally, an agreement to work excess daily or weekly hours can be cancelled with two weeks' written notice by the employee and reasonable notice by the employer.

For further information:
see the document Hours of Work & Overtime
visit the Web site:
Information Sheet About Hours of Work
http://www.labour.gov.on.ca/english/es/hours/info_hours.html 

What happens with agreements to work excess daily and weekly hours that were in place before the law changed on March 1, 2005?
Prior to March 1, 2005, employees and employers could agree to work excess daily and weekly hours up to 60 hours per week and with the approval of the Director of Employment Standards could agree to work more than 60 hours per week.

Daily excess hours agreements entered into before March 1, 2005 continue to be valid agreements but the employer is required to provide the employee (if he or she is not represented by a union) with the Information Sheet About Hours of Work and Overtime Pay prepared by the Director of Employment Standards no later than June 1, 2005.

All excess weekly hours agreements that were entered into under the law as it applied before March 1, 2005 continue to be valid agreements subject to the requirement that the employer provide the employee (if he or she is not represented by a union) with the Information Sheet About Hours of Work and Overtime Pay prepared by the Director of Employment Standards no later than June 1, 2005.

However, as of March 1, 2005 any Director’s approval obtained for an agreement entered into prior to that date ceases to have any effect.  As a result, an employer who has an agreement to work more than 60 hours per work week with an employee entered into prior to March 1, 2005 is required to obtain a “new” approval from the Director of Employment Standards.

For further information:
see the document Hours of Work & Overtime
visit the Web site:
Information Sheet About Hours of Work
http://www.labour.gov.on.ca/english/es/hours/info_hours.html  

What hours free from work are homeworkers entitled to?
Most employees, including homeworkers, are entitled to a certain number of hours free from having to work.

Daily
An employee must receive at least 11 consecutive hours off work each day.  This employment standard cannot be changed by a written agreement between the employee and employer.  This applies even if:

• the employer and the employee have agreed in writing that the employee will work excess daily hours; or
• the employer has established a regular work day that is longer than eight hours.

An employee must receive 11 consecutive hours off work each day, which means the work day may not exceed 13 hours (12 hours of work with two 30-minute meal breaks: see What eating periods and breaks are homeworkers entitled to?).

Between shifts
Employees must receive at least eight hours off work between shifts.  This doesn't apply if the total time worked on both shifts is not more than 13 hours.  For example, a homeworker working a split shift or back-to-back shifts wouldn't need to receive eight hours off between shifts as long as the total time worked on the two shifts wasn't more than 13 hours.

An employer and employee can also agree in writing that the homeworker will receive less than eight hours off work between shifts.

Weekly or Biweekly
Employees must receive at least:

• 24 consecutive hours off work in each work week; or
• 48 consecutive hours off work in every period of two consecutive work weeks.

This requirement cannot be changed by a written agreement between the employee and the employer.

For further information:
see the document Hours of Work & Overtime
visit the Web site:
Employment Standards Act Publications
http://www.labour.gov.on.ca/english/es/es_pubs.html

What eating periods and breaks are homeworkers entitled to?
An employee must not work for more than five consecutive hours without getting a 30-minute eating period (meal break) free from work.  However, if the employer and employee agree, the meal break may be taken as two shorter breaks within a period of five hours.  Together the two meal breaks must total at least 30 minutes.  This agreement can be verbal or in writing.

Meal breaks are unpaid unless the employee's employment contract requires payment.  Even if the employer pays for meal breaks, the employee must be free from work.

Meal breaks, whether paid or unpaid, aren't considered hours of work, and aren't counted toward overtime.

Are homeworkers entitled to public holidays?
Most employees, including homeworkers (full-time and part-time) are entitled to take public holidays off work and be paid public holiday pay.  It doesn't matter how recently the employees were hired or how many days they worked before the public holiday.

If the employee agrees in writing to work on the holiday, the employer must pay the employee wages at his or her regular rate for the hours worked on the public holiday and give the employee a substitute day off with holiday pay. 

However, if the employer and employee agree in writing, the employee is entitled to public holiday pay for the day, along with premium pay of at least time and a half the employee's regular rate for each hour worked on the public holiday.

Homeworkers qualify for public holiday entitlements unless they:

• fail, without reasonable cause*, to work their entire shift on their last regularly scheduled day of work before or after the public holiday, or
• fail, without reasonable cause, to work their entire shift on the public holiday if they agreed to work that day.

Note: Most employees who don't meet either of these qualifying criteria are entitled to be paid premium pay (time and a half) for every hour they work on the holiday.

*Employees are generally considered to have "reasonable cause" for missing work when something beyond their control--such as illness, for example--prevents them from working.

For further information:
see the document Public Holidays

Do homeworkers get vacations?
Most employees, including homeworkers, are eligible for a minimum of two weeks of vacation with pay after each 12 months of employment, starting from the date they are hired.

If the employer establishes a 12-month vacation entitlement year that does not start on the anniversary date of the employee's hire, the employee is also entitled to a pro-rated amount of vacation with pay for the period (stub period) before the 12-month vacation entitlement year begins.

Vacation pay is calculated as at least four per cent of the employee's "gross" wages (excluding vacation pay and before any deductions) earned in the period for which the vacation is being given.

Employees who do not complete either the stub period or 12-month vacation entitlement year don't qualify for vacation time.  However, employees earn vacation pay for every hour worked, so they will be entitled to at least four per cent of the wages they have earned as vacation pay.

Vacation pay is due before an employee's vacation, except when:

• the employer pays an employee's wages by direct deposit, in which case it is due on or before the pay day for the period in which the vacation falls,
• vacation time is not taken in complete weeks, in which case it is due on or before the pay day for the period in which the vacation falls,
• the employee has agreed in writing to receive vacation pay on his or her paycheque as it is earned, in which case the vacation pay earned in each pay period is due on the pay day for that pay period, or
• the employee has agreed in writing to receive vacation pay at any other time.

For further information:
see the document  Vacation

What written job details must an employer give a homeworker?
Certain requirements apply only to homeworkers.  Employers must advise homeworkers in writing of:

• the type of work they are being employed to perform;
• the amount to be paid for an hour of work in a regular work week when the homeworker is to be paid by the number of hours worked;
• the amount to be paid for each article or thing manufactured in a regular work week when the homeworker is to be paid by the number of articles or things manufactured*;
• an explanation of how pay will be determined when the homeworker is being paid on some other basis;
• the number of articles or things to be completed by a certain date or time when the job requires manufacturing.

*"Manufacture" includes preparation, improvement, repair, alteration, assembly or completion.

Employers must keep detailed records of job hours, wages and deductions.  They must give all employees a written wage statement with each pay that shows the full details of the pay period.

The written wage statement must set out:

• the pay period for which the wages are being paid;
• the wage rate, if there is one;
• the gross amount of wages and, unless the employee is given the information in some other manner, such as in an employment contract, how the gross wages were calculated;
• the amount and purpose of each deduction from the wages;
• the net amount of wages.

For further information:
see the document Vacation

The employee must be able to keep this information separate from his or her cheque.

What kind of information must employers keep?
Employers who employ homeworkers are required to keep a register containing the name address and wage rate(s) of the homeworker.  This must be kept for three years after the homeworker has stopped working for the employer.

In addition, all employers in Ontario, including anyone who employs homeworkers, must keep written records about each person they hire.

Employee records can be retained either by employers or by someone else on their behalf, but must be readily available for inspection.  The period of retention varies depending on the information.  For example, the employee's name, address and starting date must be retained for three years after the employee ceases to be employed by that employer.  The number of hours the employee worked in each day and each week must be retained for three years after the information was provided to the employee.

Each employee's written record must contain:

• the employee's name, address and starting date of employment;
• the date of birth if the employee is a student under 18 years of age;
• hours worked by the employee each day and week (see Exception to the rule: hours of work records).

Note:  It is suggested that homeworkers also keep a record of the hours they work and number of items they complete each day.

• information contained in the employee's wage statements;
• all documents relating to pregnancy, parental or emergency leave;
• the vacation time earned since the date of hire but not taken before the start of the vacation entitlement year;
• the vacation time earned during the vacation entitlement year (or stub period, if the employer establishes an alternative vacation entitlement year);
• the vacation time taken (if any) during the vacation entitlement year (or stub period);
• the balance of vacation time remaining at the end of the vacation entitlement year (or stub period);
• the vacation pay paid during the vacation entitlement year (or stub period) and how that vacation pay was calculated.

Note:  An employee is entitled to information about his or her vacation time and pay entitlement once with respect to each completed vacation entitlement year or stub period, on written request to the employer. 

For further information:
see the document Vacation
Employment Standards Act Publications
http://www.labour.gov.on.ca/english/es/es_pubs.html

Exception to the rule: hours of work records
If an employee receives a fixed salary for each pay period, and the salary doesn't change unless the employee works overtime, the employer is only required to record:

• the employee's hours in excess of those hours in the employee's regular work week, and
• the number of hours in excess of eight per day-or in excess of the hours in the employee's regular work day, if that's more than eight hours.

What if the employer does not follow the ESA?
If an employee thinks the employer is not complying with the ESA, he or she can call the Employment Standards Information Centre at 416-326-7160 or toll free at 1-800-531-5551 for more information about the ESA and how to file a complaint. Complaints are investigated by an employment standards officer who can, if necessary, make orders against an employer—including an order to comply with the ESA. The ministry has a number of other options to enforce the ESA, including requesting voluntary compliance, issuing an order to pay wages, an order to reinstate and/or compensate, a notice of contravention, or issuing a ticket or otherwise prosecuting the employer under the Provincial Offences Act.

• Important Notices
• Vacation
• Public Holidays
• Ontario Minimum Wage
• Termination of Employment & Severance Pay
• Hours of Work & Overtime
• Pregnancy Leave and Parental Leave
• Retail Workers
• Personal Emergency Leave
• Business Guides Available at the COBSC
• List of Fact Sheets
• Employment Regulations Info-Guide

DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Ontario Contact(s):
Employment Standards Information Centre
Ministry of Labour - MOL
Ontario 
Telephone: (416) 326-7160
Fax: (416) 314-8725
Toll-free (information): 1-800-531-5551
E-mail: webes@mol.gov.on.ca
Web site: http://www.gov.on.ca/LAB