Broader Public Sector Executive Compensation Act:  How the government’s most recent initiative to control broader public sector spending affects health care organizations

On March 16, 2015, the Broader Public Sector Executive Compensation Act, 2014 (“BPSECA”) came into force. BPSECA authorizes the government to control public sector executive compensation by establishing sector specific hard caps and enforcement measures to ensure compliance.

DDO’s September 2014 blog discussed the details of the executive compensation restraint measures in the BPSECA. Generally, the BPSECA permits the government to establish “compensation frameworks” for senior public sector executives who make more than $100,000 in compensation per year (or could potentially reach that level).

These compensation frameworks, if imposed on an employer, will replace the existing executive compensation restraints imposed by the Broader Public Sector Accountability Act, 2010 (“BPSAA”).

 The BPSECA applies to the same broader public sector employers as the BPSAA, including hospitals, universities and colleges of applied arts and technology.

 The BPSECA also applies to “designated employers” such as community care access corporations, local health integration networks, Ornge, and “everybody prescribed as a public body under the Public Service of Ontario Act, 2006 that is not also prescribed as a Commission public body under the Act”. This includes Cancer Care Ontario, eHealth Ontario, Metrolinx and Trillium Gift of Life Network. Please note this is not an exhaustive list of public bodies covered by the BPSECA. Please contact us if you are uncertain as to whether your organization is covered by this legislation.  For now, other health care organizations including family health teams, community health centres and long term care homes are not impacted.

On April 1, 2015, the Ontario government released the Broader Public Sector Compensation Information Directive. The purpose of the Directive is to require every designated employer to provide information relating to executive compensation to the government. This information will be used to create a benchmarking system for the management of executive compensation in the broader public sector.

Hospitals, community care access corporations and other designated health care employers can expect to receive a written request from the government requesting compensation information. Responses to that request within the time line specified in the request are mandatory.

Designated employers will be required to complete a standardized form (Appendix B of the Directive) which requests disclosure of  executive compensation elements such as salary, paid annual incentive pay, signing bonus, retention bonus, paid leave, benefits, loans, pension arrangements, salary ranges, maximum  annual incentive amounts, annual incentive targets  and severance pay.

The standardized form also requests information about the compensation structure of the highest paid non-executive managerial level, band or classification which directly reports to an executive position. This information may be used to solve an ongoing issue whereby executives were making the same or even less than their direct reports because of the wage freeze.

Finally, employers may also have to provide actual documentation for the following:  employment agreements, compensation plans and compensation studies.

Bottom line: Hospitals, community care access corporations and certain other health care organizations should notify their finance and/or human resources personnel to expect receipt of a formal written request for disclosure of compensation information and to comply within the timelines indicated.

Please contact Maria McDonald, Senior Human Resources Counsel, if you have any questions about the BPSECA.

416.967.7100 ext.228

mmcdonald@ddohealthlaw.com

 

 

BILL 78: An opposition bill pushing for accountability in the funding of Ontario’s health care services

On March 11, 2015, France Gélinas, the NDP’s health critic, introduced Bill 78, the Transparent and Accountable Health Care Act, 2015. Bill 78 has since passed second reading in the Ontario legislature and was referred to the Standing Committee on Social Policy on March 26, 2015.

The Bill proposes to promote transparency and accountability in the funding of health care services in Ontario by:

  • ensuring that certain persons and entities that receive public funds directly or indirectly are covered by legislative requirements relating to accountabi¬lity and transparency; and
  • requiring annual reporting on payments made by the Ontario Health Insurance Plan (OHIP) to certain persons and entities.

Both physicians and major suppliers to Ontario’s public health sector would be particularly impacted by this proposed legislation.

Broadening the Reach of the BPSAA, PSSDA, Ombudsman and Auditor General

Bill 78 proposes to broaden the reach of Part II.1 of the Broader Public Sector Accountability Act, 2010 (BPSAA) and the Public Sector Salary Disclosure Act, 1996 (PSSDA) to major health sector organizations and publicly-funded suppliers – in other words, to all health-sector entities receiving more than $1 million in public funding annually, whether directly or indirectly.

Subject to limited exceptions, Part II.1 of the BPSAA prohibits compensation increases for designated executives and restricts performance pay for designated employers. Currently, the only health-sector entities subject to these prohibitions are public hospitals. The Bill expands the reach of the PSSDA, which established Ontario’s “Sunshine List”, to all major health sector organizations, requiring the publication of the salaries of all employees earning over $100,000 per year.

Additionally, the mandate of the Auditor General is broadened by authorizing its audits of major health organizations and publicly-funded suppliers. Such health-sector entities would also be subject to oversight by the Ontario Ombudsman.

OHIP Payments Publication

Bill 78 would also require the Ministry of Health and Long-Term Care to annually publish a disclosure statement of the total amount paid to a person or entity receiving at least $100,000 through OHIP billings. The disclosure statement would also include “cautionary language”, explaining that the figures do not represent a physician’s net income. The cautionary language proposed by the Bill is as follows: “Readers of this disclosure statement should understand that it provides only a record of gross payments. In some instances, the recorded figure is a payment for the services of a number of physicians. Physicians must pay the expenses of their practice out of this gross amount. No calculation of a physician’s net income can be made from such figures. Conclusions cannot be drawn from these figures about the relative net income of any physician since overhead varies greatly from physician to physician.”

Bill 18 – Changes to workplace laws and what those changes mean for health care organizations

Bill 18, Stronger Workplaces for Stronger Economy Act, 2014 received Royal Assent on November 20, 2014. It amends many workplace laws including the Employment Standards Act (“ESA”), the Occupational Health and Safety Act (”OHSA”) and the Workplace Safety and Insurance Act, 1997 (“WSIA”).

These changes become effective on various dates as set out below.

 Minimum Wage

  1. The minimum wage will increase annually based on the Ontario Consumer Price Index. Notice of the increase will be announced each year on April 1; effective on October 1 of the same year. The first increase from $11.00 to $11.25 is effective October 1, 2015.

TO DO: If you have staff who are paid at the minimum wage or whose wages are tied to the minimum wage, notify your human resource personnel to monitor the changes annually and let your accounting department know.

 

Claims for Unpaid Wages

  1. Effective February 20, 2015, the $10,000 limit on unpaid wage claims is eliminated.  Employees can now claim for any amount. Employees also have 2 years to make a claim; an increase over the prior 6 month time frame.

TO DO: No action necessary.

 

ESA Poster

  1. Employers must provide a copy of the ESA poster to:
  • current employees by June 30, 2015
  • new employees within 30 days of becoming an employee (after May 30, 2015).

Effective May 20, 2015, an employer must inquire whether the Ministry has prepared a translation of the poster into another language if an employee makes a request.

TO DO: Notify your human resource personnel to download and save the ESA Poster, which can be found at http://www.labour.gov.on.ca/english/es/pdf/poster.pdf .  Add to your orientation package for new employees and make sure to distribute to all existing employees before June 30th.

 

ESA Self-Audit

  1. Effective May 20, 2015, employers may be required by an Employment Standards Officer to conduct a self-audit to ensure compliance with the ESA. Employers will be required to correct any deficiencies uncovered by the audit.

TO DO: Consider doing a proactive self-audit of your ESA compliance. Contact Maria McDonald for assistance.

 

Temporary Agency Employees

  1. Effective November 20, 2015, employers who use temporary agencies may be held responsible for temporary employees’ unpaid wages, overtime pay or public holiday pay if the temporary agency fails to pay. Employers must also keep records of the hours worked by any temporary employee for 3 years.

TO DO: If you use temporary agency staff, notify your human resource personnel of this change.

 

Unpaid interns

  1. Effective November 20, 2015, unpaid workers or interns (specifically high school students under an approved work experience program, college/university interns or co-op students on an approved college/university program and other unpaid trainees) who provide work or perform services are considered workers under the OHSA.   As such, these unpaid workers must receive mandatory violence/harassment program instruction and basic awareness health and safety training. It is unclear whether this applies to volunteers.

TO DO: If you use unpaid workers or interns, notify your human resource personnel of this change. Initiate a plan to ensure your     unpaid workers and interns receive the necessary training.

 

Future Possible Changes to WSIA

  1. Bill 18 allows the government to make future changes to hold employers responsible for accidents to temporary employees.  The accident costs could be attributed to the employer instead of the temporary agency; thereby increasing the employer client’s premium costs.  This provision is not in effect at this point as the government is further considering the issue.

TO DO: No action necessary.

 

Employment Protection for Foreign Nationals Act (Live-in Caregivers and Others), 2009 (“EPFNA)

  1. Effective November 20, 2015, the EPFNA will apply to all foreign nationals working in Ontario pursuant to an immigration or foreign temporary employee program and not just to “Live-in Caregivers and Others”.

TO DO: If you employ foreign nationals as staff, notify your human resource personnel to review these provisions carefully.

 

Open Periods for Decertification under the Labour Relations Act

  1. Effective May 30, 2015, the open period for decertification or a displacement application in the Construction sector has been decreased from 3 months to 2 months.

TO DO: No action necessary.

 

Please contact Maria McDonald, Senior Human Resources Counsel, if you have any questions about how these changes will impact your organization.

416.967.7100 ext.228

mmcdonald@ddohealthlaw.com