The Public Sector Compensation Restraint to Protect Public Services Act, 2010

December 15, 2010

Introduced under Bill 16, which is discussed in further detail below, the Public Sector Compensation Restraint to Protect Public Services Act, 2010, more commonly referred to as the ‘wage restraint legislation’, came into force as of May 18, 2010.

In short, the wage restraint legislation places a ‘freeze’ on compensation and benefits for non-union employees in the broader public sector for the period of March 24, 2010 to March 31, 2012.  This includes hospitals under the Public Hospitals Act, and every employer that received at least $1,000,000 in funding from the Government of Ontario in 2009 and does not carry on its activities for the purpose of gain or profit to its members or shareholders.

Union employees are not covered by this legislation, however the provincial government has publicly stated that it expects that unions and union employees to also agree to a period of wage restraint.

The wage restraint legislation does not impose a complete freeze on compensation.  Under the legislation it is still possible to increase an employee’s rate of pay within an established pay range, but only where the increase is in recognition of either the employee’s length of service or job performance, or is provided in recognition of the completion of a professional or technical education program or course.

Employers that are subject to the wage restraint legislation will be required to file reports aimed at demonstrating compliance.  The content and structure of the reporting forms has not yet been established.

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