Accounting for Law
Real Estate

Revamped ESA creates more costs for condos, owners

Condominium corporations and unit owners can expect their costs to climb due to the higher minimum wage and other changes to the recently updated Employment Standards Act (ESA), says Toronto condominium lawyer Warren Kleiner.

The minimum wage, which increased to $14 an hour on Jan. 1 and is expected to rise to $15 an hour in 2019, had an immediate impact, says Kleiner, a partner with Shibley Righton LLP in Toronto.

The changes have most likely created a domino effect, with other employees currently earning more than the minimum wage seeking similar increases to reflect their responsibilities, he says.

Kleiner tells AdvocateDaily.com that condo corporations currently under locked service agreements won't face increases until the contracts are renewed but when that happens, “they’re going to get hit.”

“The minimum wage is going to be a direct hit to condominiums," he says. "The other thing that will trickle down is the impact of those other individuals who will be seeking raises in lockstep with the increases in minimum wages."

Part-time and casual workers are required to be paid the same as full-time workers for substantially the same work, except for reasons of merit or seniority, he says.

The corporation's common expenses — which are borne by the unit owners — will absorb the increased costs, Kleiner says.

"It depends how many employees or contractors the corporation has," he says. "Some condominiums have one employee and everything else is independent contracts. They may not see a big impact, but the more staff you have, the higher the costs.

"And it's going to translate into an increase on your assessment because the corporation is going to have to pay for those higher costs," Kleiner says.

Other elements of the ESA that could impact the bottom line include expanded personal emergency leaves, such 10 sick leave days of which two must be paid, unpaid extended leaves for medical reasons, maternity, the death of a child, and for being a victim of a crime. Employees taking a leave may also need to be temporarily replaced.

"All of these added costs will ultimately make their way to what condo corporations pay, therefore trickling down to the common expenses," Kleiner says.

The ESA also requires a poster outlining employee rights and obligations to be posted where staff will see it and a translated poster if the majority language at the worksite is other than English.

"Another big change that will affect condominiums is on-call employees," Kleiner says.

Employees who are on-call are required to be paid three hours' wages, even if they are not called to work, he says. Many condo corporations have people on call for emergencies or weekends.

"Ultimately everything is going to trickle down because if a company has to pay their people more, or pay to cover people who are off, it's going to make its way down to the client," Kleiner says.

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