Weaknesses in the Recovery of Unpaid Wages in Ontario and Options for Reform

The recovery of money owed to employees is a central function of the complaints system
established under Ontario’s Employment Standards Act. Yet, the Ministry of Labour continues to experience
difficulties recovering unpaid wages from employers who have engaged in wage theft and
are issued an Order to Pay Wages. Indeed, only a minority of such employers comply with
such orders. The low rate of recovery is deeply problematic because it leaves employees
with little more than unenforceable paper victories, and implicitly suggests to employers
that they will not face consequences if they choose to ignore the Ministry of Labour.
Drawing on an analysis of administrative data, this paper analyses the driving factors
behind low rates of wage recovery from employers who have been issued Orders to Pay
Wages and who are solvent. Based on a scan of recovery mechanisms in place elsewhere,
the paper also explores options that may enhance the recovery of unpaid wages including
the introduction of a government-run wage protection fund, wage liens, business license
revocation and other measures that make non-compliance with orders costly.