Running a business in Ontario is already a balancing act: payroll deadlines, staffing shortages, customer demands. Add in the steady stream of Ontario employment law changes, and even the most organized small business owner can feel overwhelmed.
The truth is, ignoring compliance is risky. The Ministry of Labour conducts regular inspections, and penalties for non-compliance range from costly fines to reputational damage. But here’s the good news: staying on top of these changes doesn’t have to drain your time. With the right systems in place, compliance can happen automatically in the background.
Below, we’ve broken down the most important Ontario employment law changes for 2025–2026, what’s already in force, what’s coming next, and practical steps to keep your business compliant.
Why These Changes Matter For Small Businesses
Ontario employment law changes aren’t just “legal fine print.” They directly affect how you:
- Hire new employees (from what you post in a job ad to how you onboard)
- Pay staff correctly (ensuring compliance with new minimum wage rates or gig work rules)
- Manage policies (like sick leave, disconnecting-from-work, or vacation pay)
- Handle terminations (remote workers now count toward mass termination thresholds)
For small businesses, missing even one of these updates can be costly. For example:
- Paying staff below the new minimum wage, even by mistake, can trigger fines and back-pay orders.
- Using an unlicensed recruiter can result in penalties for both the recruiter and the business.
- Asking for a doctor’s note for ESA sick days (now prohibited) could expose you to a Ministry complaint.
Staying compliant isn’t just about avoiding penalties, it also builds trust with employees, showing them you run a fair and transparent workplace.
The Ontario Employment Law Changes Already in Effect
1. No More Doctor’s Notes for ESA Sick Days
Since October 28, 2024, Ontario employers cannot ask for a doctor’s note to prove entitlement to the ESA’s three unpaid sick days. Instead, you may request “evidence reasonable in the circumstances.”
For example:
- A self-attestation signed by the employee
- A receipt for over-the-counter medication
- A pharmacy note confirming a prescription was filled
Why it matters for SMBs: Medical notes often caused friction between staff and managers. By removing this requirement, Ontario aims to reduce the burden on both workers and healthcare providers. For you, it means updating leave policies and ensuring frontline managers know the new rule.
2. Recruiter & Temp Agency Licensing (Client Liability)
Ontario now requires temporary help agencies (THAs) and recruiters to be licensed. Employers who knowingly or unknowingly hire through an unlicensed agency can face penalties.
Practical steps:
- Ask for the recruiter/agency’s license number before signing a contract
- Verify their license status online through Ontario’s registry
- Document the check in your records
Why it matters for SMBs: Many small businesses lean on staffing agencies during peak seasons. Failing to check a license could create unexpected liability for your business.
3. Remote Workers Now Count Toward Mass Termination
Previously, mass termination rules only applied to employees working at the same physical location. Now, employees who work exclusively from home also count toward the 50-employee threshold for mass terminations.
Scenario: If your business employs 20 in-office staff and 35 remote workers, you now cross the 50-employee threshold. This means enhanced notice requirements apply if terminations occur.
Why it matters for SMBs: Remote work is here to stay. For businesses with a distributed workforce, this law ensures remote staff receive the same protections as on-site employees.
4. Annual Minimum Wage Updates
The general minimum wage in Ontario rose to $17.20/hr on October 1, 2024 and will increase again to $17.60/hr on October 1, 2025.
Why it matters for SMBs: Payroll errors, like paying the old minimum wage, are one of the top reasons businesses face Ministry of Labour audits. Even a $0.40 shortfall per hour, if applied to multiple staff over weeks, can become a significant liability.
5. Digital Platform Workers’ Rights Act (Gig Workers)
Come into force July 1, 2025, this law applies to workers using digital platforms for ridesharing, food delivery, and similar services. Key rights include:
- Minimum wage for each assignment (not just average earnings)
- Regular pay periods
- Protection of tips and gratuities
- Advance notice before deactivation
Why it matters for SMBs: Even if you don’t run a delivery or ride-hailing app, your vendors might. If your business partners with gig platforms, these changes could impact costs and contracts.
Additionally in Ontario, effective July 1, 2025, employers with 25 or more employees must provide new hires with a written employment information statement before their first day of work. This statement must include the employer’s legal and operating names, contact information, a general description of the work location and initial hours, the starting wage or commission, the pay period and payday, and information about overtime and break.
Ontario Employment Law Changes Coming Up
Hiring in Ontario is about to change in a very real way. New requirements will come into effect January 1, 2026, and while that sounds far away, the truth is that updating your job postings, processes, and systems takes time. Employers who start preparing now for these Ontario employment law changes will avoid last-minute headaches (and possibly fines) later.
Here’s what you need to know:
1. Salary Range Transparency in Job Postings
Under the new rules, all publicly advertised job postings must include a salary range. This applies whether you’re posting on LinkedIn, Indeed, your company website, or even a printed ad.
Why it matters:
- Fairness and equity: This change is designed to reduce wage gaps, particularly for women, newcomers, and equity-seeking groups who often face pay disparities.
- Candidate trust: Salary transparency has become a key factor in job seeker decisions. According to LinkedIn, job posts with salary ranges see up to 30% more engagement.
- Employer brand: Businesses that post ranges early will position themselves as progressive and trustworthy employers.
Example for SMBs:
If you run a Toronto café hiring a barista, your job ad can no longer just say “Competitive wage.” It will need to say something like: “$17.60 – $20.00 per hour, based on experience.”
Tip: If you’re nervous about “boxing yourself in,” remember that the law requires a range, not a fixed number. You can still leave room to negotiate based on skills and experience.
2. AI Disclosure in Hiring
If you use artificial intelligence (AI) tools during your hiring process, you’ll need to disclose this in the job posting.
What counts as AI?
- Resume-screening software that automatically filters candidates
- Chatbots that interact with applicants
- Video interview tools that use algorithms to assess responses
Why it matters:
AI in hiring is controversial. While it saves time, critics argue it can unintentionally screen out qualified candidates (for example, those with non-traditional resumes or accents). By requiring disclosure, Ontario aims to give applicants transparency about how their application is being assessed.
Example for SMBs:
If you use an AI-powered resume screener that filters out candidates without a certain credential, you’ll need to state in your posting something like:
“Please note: This job posting uses AI screening tools as part of the recruitment process.”
Tip: Even if your system uses AI indirectly (e.g., your ATS partners with an AI vendor), you’ll still need to disclose it. Now is the time to audit your tools and confirm how they function.
3. Ban on “Canadian Experience” Requirements
Starting in 2026, job postings and hiring processes cannot require “Canadian experience.”
Why it matters:
- Ontario is addressing barriers for internationally trained workers, especially in fields like healthcare, tech, and skilled trades.
- By removing “Canadian experience” as a blanket requirement, employers must evaluate skills and experience more fairly.
Example for SMBs:
If you’re hiring an accountant and your posting currently says “Must have 3 years Canadian experience,” you’ll need to remove or reframe it to focus on the actual job skills:
“Must have 3 years professional accounting experience (experience in Canada or internationally).”
Tip: You can still ask for knowledge of Ontario or Canadian regulations where it’s relevant (e.g., Ontario employment standards or Canadian tax law), but this must be a skills requirement, not a requirement for ‘Canadian experience’ in itself.
4. Trial Shifts and Training Time Must Be Paid
Although already in force, this change is worth repeating because it ties closely to hiring. Employers sometimes ask candidates to work a “trial shift” to prove their skills before offering employment. Ontario has clarified that all trial shifts must be paid at least minimum wage.
Example for SMBs:
If you’re hiring a server and want them to shadow during a busy dinner service, you must pay them at least the applicable minimum wage for those hours, plus any earned tips.
What Employers Should Do Now
Even though these major Ontario employment law changes don’t kick in until 2026, proactive employers are preparing in 2025. Here’s how:
- Audit your job postings: Look at your last 10 postings. Do they include vague pay references (“competitive salary”) or a Canadian experience requirement? Start rewriting them now.
- Update your templates: If you use a template library for postings, add fields for salary range and AI disclosure.
- Train hiring managers and recruiters: Make sure they understand how to frame requirements without using prohibited language.
- Audit your tools: If your applicant tracking system or HR software uses AI, confirm how it works and whether disclosure is required.
- Align with payroll data: Use payroll software (like PaymentEvolution) to pull real compensation data into job postings, ensuring ranges are accurate and consistent.
Don’t Overlook Compliance in Offboarding (Especially in Mass Terminations)
Employment law doesn’t just shape how you hire, it also governs how you part ways with employees. Terminations, resignations, and contract completions are all legally sensitive, and Ontario’s rules become even stricter in mass termination scenarios.
Under the Employment Standards Act, if 50 or more employees are let go within a four-week period, employers must meet special obligations. This includes giving advanced notice to the Ministry of Labour, delivering termination pay and severance correctly, and providing all required documentation on time. For small and mid-sized businesses, the complexity and risk in these moments can be overwhelming.
That’s where PaymentEvolution’s Offboarding Assistant makes a difference. The tool helps businesses:
- Automate final pay calculations (including vacation, severance, and other entitlements), whether for one employee or hundreds.
- Generate compliant documentation and track benefits adjustments, reducing the chance of errors.
- Stay on schedule with reporting requirements, ensuring ministries, payroll records, and employees all receive accurate information.
- Protect both compliance and reputation during high-pressure exits.
Whether it’s a single resignation or a large-scale layoff, PaymentEvolution’s platform helps you handle offboarding with confidence. By simplifying these critical processes, businesses can reduce legal exposure, maintain employee trust, and focus on moving forward instead of worrying about costly compliance missteps.
Conclusion: Staying Ahead of Change With Confidence
Ontario’s evolving employment laws aren’t just legal fine print, they shape how businesses recruit, retain, and support their people. With new rules around job postings, wage transparency, AI disclosure, and potential future changes to benefits and remote work, employers must stay proactive to remain compliant and competitive.
The challenge? Most small and mid-sized businesses don’t have the luxury of a dedicated compliance team. That’s why the right payroll and HR technology, backed by expert support, is no longer optional, it’s essential.
At PaymentEvolution, we make it simple to navigate these changes. From ensuring your payroll deductions stay accurate under shifting legislation to supporting transparent benefits administration, we’re here to help you not only comply but also thrive in this new landscape.
The takeaway is clear: employment law will continue to evolve. Businesses that get ahead of these updates will not only avoid penalties but also build trust with employees, attract stronger talent, and protect their long-term growth.
If you’re ready to simplify compliance and focus on running your business, connect with us
