Are you affected by Ontario ESA changes to business/IT consultants?

If you’re a business or IT consultant, or hire business or IT consultants, you should know that as of January 1, 2023, the Employment Standards Act in Ontario has changed.  

What is the change? 
If certain conditions are met, business or IT consultants are no longer covered under the ESA. 

What is a “business consultant”? 
Under the ESA, a “business consultant” is defined as someone who provides advice or services to a business or organization on its performance, including:

  • operations
  • profitability
  • management
  • structure
  • processes
  • finances
  • accounting
  • procurement
  • human resources
  • environmental impacts
  • marketing
  • risk management
  • compliance
  • strategy 

What is an “information technology consultant”? 
Under the ESA, an “information technology consultant” is defined as someone who provides advice or services to a business or organization on its information technology systems, including:

  • planning
  • designing
  • analyzing
  • documenting
  • configuring
  • developing
  • testing
  • installing

Does the ESA exclusion for business/IT consultants apply to both the employer and the employer’s clients? 
Yes. It doesn’t matter whether the business or organization the consultant provides advice or services to is the consultant’s employer, or a client of the consultant’s employer.

What conditions must be met for the ESA exception to apply? 
For a business or IT consultant to be excluded from the ESA, all four of the following conditions must be met:

  1. The individual meets the definition of “business consultant” or “information technology consultant” under the ESA.
  2. The consultant must be providing their services through either:
    •    a corporation of which they are a director or a shareholder party to a unanimous shareholder agreement
    •    a sole proprietorship if the services are provided under a business name of the sole proprietorship that is registered under the Business Names Act
  3. The employer and consultant must have an agreement in writing that sets out when and how much the consultant will be paid. The agreement should express the consultant’s pay as an hourly rate that must be at least $60 per hour. The hourly rate must not include:
    •    bonuses
    •    commissions
    •    expense
    •    travelling allowances
    •    benefits
  4. The consultant must be paid at the time and the amount specified in the agreement.

Can the ESA exclusion for business/IT consultants change? 
If any of the four conditions stops being met, the exception no longer applies, and the individual may have rights under the ESA.

For further information, please contact CFIB's Business Resource Advisors at 1-833-568-2342.