HR Compliance doesn’t need to be a daunting task that leaves you overwhelmed. If the mere thought of labour laws and policies makes you feel light-headed, take a moment to relax, grab a cup of coffee, and let us guide you through the process of understanding and complying with HR regulations as a nonprofit.
Before we dive in, prepare yourself for an incredible offer! Gain lifetime access to our Document Library, featuring over 1500 of the most up-to-date HR policies in both French and English. And the best part? It’s completely free for life for the first 100 Charity Village members who sign up! This means you can finally bid farewell to endless internet searches and costly legal consultations for HR policies. Access and download fully compliant HR policy templates whenever you need them, on any device – all for free!
As always, we’re throwing in a set of valuable resources straight from this article:
- Compliance Assessment Checklist
- Human Rights Commitment Policy
- Hiring Policy
- WHMIS Policy
- Emergency Response Plan
- Workplace Harassment Policy
- Hours of Work and Overtime Policy
What is HR compliance?
Now, let’s delve into the heart of the matter – what is HR compliance? At its core, it involves understanding the federal or provincial laws and regulations that govern your organization and ensuring that your HR policies and practices align with these. To put it simply, it’s about knowing the rules of the game and playing by them. Once you’ve grasped this concept, the next step is to develop policies, practices, and training programs that ensure every employee is well-versed in these guidelines and adheres to them diligently. For nonprofits, HR compliance is especially crucial, as you often rely on the trust of donors, volunteers, and the public.
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Key areas of HR compliance for nonprofits in Canada
Here are some key compliance areas that nonprofits should be aware of:
1. Employment Standards Legislation:
Nonprofit organizations in Canada must comply with employment standards legislation, which varies by jurisdiction. Employment standards legislation sets out the minimum requirements and entitlements for employees in areas such as:
- Minimum Wage: The lowest hourly wage rate that employers can pay employees.
- Working Hours: Regulations on daily and weekly working hours, rest breaks, and meal periods.
- Overtime Pay: Rules for paying employees who work beyond standard hours.
- Vacation Entitlements: Guidelines on the amount of paid vacation time employees are entitled to.
- Public Holidays: Regulations for paying employees for statutory holidays.
- Leaves of Absence: Provisions for maternity, parental, family medical, sick, and other types of leaves.
- Hiring: Nonprofits must comply with employment, human rights, and accessibility regulations regarding hiring practices, including equal treatment and discrimination prevention.
- Termination: Nonprofits must also comply with regulations regarding termination notice and pay.
Employment standards legislation may also require nonprofits to display specific information within their workplaces or convey this information to their workers in other ways. For instance, in Ontario, employers subject to the Employment Standards Act, 2000 (ESA) are obligated to provide all employees with an employment standards poster.
Voluntary Employment Agreements (VEAs)
Nonprofits are generally exempt from the application of provincial employment standards legislation, with the exception of BC and Quebec. To qualify for this exemption, a nonprofit must have a voluntary employment agreement with its employees. A VEA is an agreement between an employer and employee which, when signed by both parties, indicates their willingness to waive their rights to employment standards under provincial legislation. By signing a VEA, both parties are agreeing that they will essentially be governed by different rules (typically governed by common law rather than employment standards).
2. Human Rights Legislation
Human rights are protected by legislation in each of Canada’s jurisdictions by the applicable Human Rights Act or Code. In general, provincial and territorial human rights legislation are similar, but do vary slightly. For example, the prohibited grounds of discrimination in Ontario per the Ontario Human Rights Code are:
- Age
- Ancestry, colour, race
- Citizenship
- Ethnic origin
- Place of origin
- Creed
- Disability
- Family status
- Marital status (including single status)
- Gender identity, gender expression
- Record of offences (in employment only)
- Sex (including pregnancy and breastfeeding)
- Sexual orientation
Nonprofits must ensure that their hiring, wages/benefits, promotion, day-to-day operation, and termination practices are free from discrimination and adhere to human rights laws. Nonprofits must also ensure that this right to equal treatment is upheld in the areas of rate of pay, overtime, hours of work, holidays, benefits, shift work, discipline, and performance evaluations. Accommodations for individuals with disabilities must also be provided as required by law.
3. Occupational Health and Safety (OHS) Legislation
Every workplace is prone to hazards, and nonprofits are no exception. Nonprofits are responsible for providing a safe and healthy work environment for their employees and volunteers. Each province and territory has its own health and safety regulations that nonprofits must comply with. This includes addressing workplace hazards, providing training, and maintaining proper records.
- Workplace Safety: Nonprofits must provide a safe and healthy work environment for employees and volunteers.
- Training: Proper training and orientation must be provided to employees and volunteers to ensure they understand workplace hazards and safety procedures and on topics such as Violence and Harassment.
- Reporting: Nonprofits must report workplace accidents, injuries, and hazardous occurrences to the relevant authorities.
- WHMIS: Workplace Hazardous Materials Information System (WHMIS) is a hazard communication standard designed to ensure that workers have the information they need to safely handle hazardous materials in the workplace. Nonprofit organizations must have a WHMIS program in place to ensure employees are trained on the safe handling of hazardous materials.
- Workplace Committees or Representatives: Depending on size, some organizations require the establishment of health and safety committees or the appointment of a health and safety representative. The committee or representative holds several duties including identifying potential hazards including chemical, ergonomic, physical or psychosocial.
- Employee Rights: Employees also have rights about their safety in the workplace:
- The right to know about health and safety matters.
- The right to participate in decisions that could affect their health and safety.
- The right to refuse work that could affect their health and safety, and that of others.
Accidents can happen in the blink of an eye, and you can’t be researching how to handle the situation in the spur of the moment. If you have over 20 employees, you need an Emergency Response Plan, that includes accessibility considerations (in Ontario), to save lives and minimize damage during an emergency.
4. Privacy legislation
Nonprofits that collect and use personal information from employees, volunteers, and donors must comply with privacy legislation. The Personal Information Protection and Electronic Documents Act (PIPEDA) is the federal law governing the collection, use, and disclosure of personal information. PIPEDA outlines how organizations must collect, use, and disclose personal information; however, many jurisdictions have their own legislation in place. [Please note: healthcare agencies follow the Healthcare Privacy Act, PHIPA, and public sector organizations follow FIPPA]
5. Employment contracts and policies
Developing clear and comprehensive employment agreements and HR policies is essential for nonprofits. These documents outline the terms of employment, expectations, benefits, and procedures for addressing issues such as harassment, grievances, and discipline. Having written policies in place helps prevent misunderstandings and conflicts.
Nonprofits should have clear employment contracts and written policies covering areas such as:
- Harassment and Discrimination: Policies outlining zero tolerance for harassment and discrimination.
- Accommodation: Guidelines for accommodating disabilities and other special needs.
- Code of Conduct: Expectations for employee behaviour and professionalism.
- Termination: Procedures for handling employee terminations and severance.
6. Compensation
While nonprofits may operate with limited resources, it’s important to provide reasonable compensation that reflects the skills and responsibilities of the employees, but it’s mandatory that employment standards minimums are adhered to.
Overtime Pay and Exemptions:
If an employee works more hours than the legislated overtime threshold in their province (for example, 44 hours in a week in Ontario), employers are required to pay overtime for the additional time worked. However, certain categories of employees are exempt from overtime requirements in certain jurisdictions, including managers (those who direct and control the work of others) or professionals. To learn which of your employees, if any, are exempt from overtime, please refer to your provincial employment standards legislation or the Hours of Work and Overtime Policy (Ontario) from HR Covered.
Pay Equity:
Existing Human Rights Acts or Codes provide for the elimination of job discrimination based on gender. Certain jurisdictions take this one step further by legislating that gender-based pay comparison methods be put into policy. For example, the Pay Equity Act in Ontario sets out guidelines for employers with 10 or more employees. The Ontario Pay Equity Commission is one government agency that can provide assistance to Ontario nonprofits with the implementation of pay equity strategies. For more information on other provincial agencies that require, please refer to the Canadian Payroll Association or book a free consultation with our HR advisor.
7. Volunteer management
Many nonprofits rely on volunteers to support their operations. While volunteers may not be classified as employees within not-for-profit settings, it’s still important to have proper volunteer management practices in place. This includes setting clear expectations, providing necessary and legislated training, and ensuring a safe environment for volunteers.
8. Reporting
Nonprofits in Canada must adhere to reporting requirements set by the Canada Revenue Agency (CRA) to maintain their charitable status. This includes providing financial information, activities, and compensation details. Transparency and accurate reporting are vital for maintaining public trust.
9. Accessibility and accommodations
Accessibility legislation exists in some provinces to promote equality for individuals with disabilities. Ontario led the way for this with its Accessibility for Ontarians with Disabilities Act, 2005 (AODA), and other jurisdictions such as Manitoba have followed suit.Much of this legislation involves ensuring that your business provides persons with disabilities with similar access to your products and services, as other individuals. Some pieces of legislation also involve employees.
Ensuring accessibility and accommodations for all employees is a fundamental aspect of HR compliance that nonprofit organizations in Canada should prioritize. If an employee possesses a protected characteristic that hinders their ability to fulfil a workplace standard or obligation, it is the responsibility of the employer to provide accommodation. Accommodation entails adjusting the employee’s work conditions or job responsibilities to enable them to carry out their job effectively on a daily basis. It’s not just a legal requirement; it’s also a matter of promoting inclusivity and diversity within the workplace.
How to be compliant
Achieving HR compliance can be a complex task, but nonprofit organizations can follow legislation and best practices to stay out of trouble:
- Policy Documentation: Create and maintain HR policies and procedures that align with legal requirements and keep records of employee understanding of those policies. A comprehensive compliance checklist can streamline your compliance assessment process and ease the struggle.
- Stay Current with New Regulations: Regularly monitor changes in employment laws and regulations within the jurisdiction(s) you operate in. Subscribing to the newsletters of government organizations, nonprofit associations, legal firms, and HR consulting firms can solve the monitoring problem to a certain extent, as most of them notify you as soon as a significant change happens.
- Employee Training: Train employees and managers on HR policies, workplace violence, harassment and discrimination, workplace safety, and accessibility (as applicable). Employee training on HR policies and procedures should be an ongoing process to keep everyone informed and aware, and is mandated by law for certain topics.
- Be Transparent with Employees: Maintain open communication with employees about HR policies, benefits, and any changes that may affect them.
- Compliance Audits: Conduct regular compliance audits to identify and rectify issues before they escalate.
HR compliance is an ongoing commitment that requires diligent effort. To maintain compliance, organizations must continuously review and update their HR policies and procedures, ensuring they align with current legal requirements.
Also read: Ontario Nonprofit HR: All policies you would need in 2023 to be compliant
Common HR compliance issues
Human resources (HR) compliance violations in Canada can vary by province and territory. It’s essential for nonprofits to be aware of and adhere to the employment laws that apply to the jurisdiction(s) they operate within to avoid compliance issues. Here are some common HR compliance violations you should be aware of:
Employment Standards Violations:
- Minimum wage violations: Failing to pay employees the minimum wage set by the province or territory.
- Overtime pay: Not paying eligible employees overtime rates for hours worked beyond the standard workweek.
- Vacation pay: Not providing the mandatory vacation pay or not allowing employees to take their entitled vacation time.
Termination and Severance:
- Inadequate notice: Not providing the required notice period or pay as per employment standards.
Discrimination and Harassment:
- Workplace discrimination: Failing to address or prevent discrimination based on protected grounds such as race, gender, age, or disability.
- Workplace harassment: Not having policies and procedures in place to prevent and address workplace harassment and bullying.
Health and Safety Violations:
- Inadequate workplace safety measures: Not implementing proper health and safety measures, including failing to conduct required safety training and risk assessments.
- Ignoring workers’ safety concerns: Not addressing employee concerns related to workplace safety.
Privacy Violations:
- Mishandling employee data: Not properly securing and protecting sensitive employee information, including personal and health-related data.
Leaves and Accommodations:
- Failure to provide required leaves: Not allowing eligible employees to take leaves of absence as mandated by law (e.g., maternity leave, sick leave, or family medical leave).
- Failure to accommodate: Not providing reasonable accommodations for employees with disabilities as required by human rights legislation.
Record-Keeping and Documentation:
Inadequate record-keeping: Failing to maintain accurate and complete HR records, including payroll, time records, and employee contracts.
Job Posting and Interview:
- Posting discriminatory job listings: Creating job advertisements that discriminate against individuals based on protected characteristics such as age, gender, race, religion, disability, or other grounds prohibited by human rights legislation. This includes using language or requirements that unfairly exclude certain groups from applying for positions.
- Noncompliant Interview Questions: During the hiring process, posing questions that violate human rights legislation by inquiring about an applicant’s protected characteristics, such as their age, gender, marital status, religion, disability, or family status. Such questions can result in discrimination claims and legal repercussions.
Employee Misclassification:
Misclassifying employees as independent contractors: Incorrectly categorizing workers as independent contractors rather than employees, which can result in violations related to payroll taxes, employment standards, and benefits entitlement. Canada has strict rules governing the classification of workers, and misclassification can lead to legal and financial penalties.
It’s important for nonprofits to stay informed about changes in employment laws and regulations in their specific province or territory and seek legal advice or HR expertise when necessary to ensure compliance and avoid these common violations.
Consequences for non-compliance
Noncompliance with HR regulations can have serious consequences for nonprofit organizations, including:
- Compliance orders to rectify violations.
- Orders to reinstate or compensate affected employees.
- Fines, notices of contravention, or other penalties.
The severity of the penalty imposed on the employer typically hinges on factors such as the nature, circumstances, extent, and seriousness of the specific violation. Additionally, whether the violation was deliberate and whether the nonprofit organization has a history of prior infringements can also influence the penalty. Repeated or persistent violations generally incur more stringent penalties.
Most nonprofit organizations find themselves overwhelmed when it comes to staying up-to-date with the constantly evolving employment laws. With limited time and a multitude of tasks to juggle, including the monitoring of compliance regulations, the introduction of new policies and procedures, the revision of existing ones for compliance, and the need for periodic reviews, this can indeed pose a formidable challenge. That’s why we encourage you to leverage our Free Document Library, where you may download HR policies that align with compliance standards, and take advantage of our Free Compliance Audit to spot potential violations and gain valuable insights.
About HR Covered: At HR Covered, we have a deep understanding of the critical organisational needs and processes specific to Canadian nonprofits. We ‘get’ your culture, your goals, and what drives you, too. Our unparalleled responsiveness and impeccable service have helped more than 200 nonprofits in Canada to focus on their core activities. We provide a plethora of services including HR Compliance, Legislative Training, HR Documentation, Health & Safety Compliance, HR Legal, HR Consulting and Outsourcing. For more info visit our website: www.hrcovered.com or call us at +1 866-606-0149.
