With the passage of the Working for Workers Act, 2021 bill just one week ago, Ontario enacted new protections for workers in 2022. As with most legislation, much is left to be desired, but it is an essential step in the right direction. The two most important worker protections, particularly relevant to tech workers, coming into effect under the law in the new year are:
- Ban on non-compete agreements
- Mandatory "disconnect from work" policies
Both of these policies are definitively pro-employee. Rather than seeing this as a zero-sum game, however, employers should embrace these changes to improve their operations and culture.
Setting employees free 🪤
Non-complete agreements for high-skilled workers have been pretty standard in much of North America, locking in employees to companies and risking litigation if they chose to take their relevant skills to a competing firm. While often unenforced in practice for lower-level employees, companies' looming axe over workers has stifled labour movement. According to the US Treasury department, these agreements often lead to individual and societal detriment; concluding that "stricter non-compete enforcement [is] associated with both lower wage growth and lower initial wages".
Under the new law, Ontario eliminates non-competes for employees below the c-suite level. For even greater clarity and protection, the bill even spells out the few positions explicitly exempt (still allowed to be restricted by non-compete agreements):
chief executive officer, president, chief administrative officer, chief operating officer, chief financial officer, chief information officer, chief legal officer, chief human resources officer or chief corporate development officer, or... any other chief executive position
With distributed teams here to stay, it will be interesting to see if the law could attract workers to base themselves in Ontario for additional protections. On the flip side, will employers, especially remote-first tech companies, avoid hiring and operating physically in Ontario to bypass the new law? We're seeing something similar with Colorado getting the cold shoulder for forcing transparent pay scales.
The last real handcuff that start-ups have to employ for keeping employees in place is equity vesting periods. However, even now, they'll have to contend with the emerging industry standard of shortened vesting time horizons or no cliff when attracting new employees in this red-hot labour market. If you're selling golden handcuffs, they will need to be really shiny in order to make potential employees join!
As a result, it will be even more important to keep your high-skilled, high-performing employees happy through positive re-enforcement, truly "competitive" compensation, and a great culture. Employers that operate transparently, fairly, and positively toward employees will have no worries keeping their people in place. If you are still relying on disincentives and political games to keep your employees under heel, the coming decade doesn't look bright.
Some commentators have said that California developed into the innovation centre of the USA, in part, due to the refusal to honour non-competes and allowing employee mobility. We'll see what the same people say in a decade about Ontario.
Disconnecting at the end of a long day 📵
It's no question that as the world moved to distributed teams, people have been working much more. Almost all white-collar workers, including myself, feel the impulse to check emails or Slack messages after work or on the weekends due to no delineation between home and work. For the past two years, many of us have felt "on" all the time.
With the new law, Ontario is mandating that all employers with over 25 employees have a written "disconnecting from work" policy in place by March 1, 2022. The specifics of what policies must include will be revealed in follow-up regulation(s), but companies must start thinking about this now.
Admittedly, there is still a lot unknown about the requirements and what punishment is for employers who write a policy and don't follow it. If we look to Ireland, which passed a similar law this year, three main pillars could include:
- the right of an employee to not have to perform work outside their normal working hours routinely
- the right not to be penalized for refusing to attend to work matters outside of normal working hours
- the duty to respect another person's right to disconnect (e.g., by not routinely emailing or calling outside normal working hours)
Regardless of the pending specifics, the benefit will be that policies and expectations will need to be in writing. I'm sure there will be those companies that "lawyer up" with a vague policy, but employees will be able to see the red flags 🚩 when their management team publishes a one-sentence policy like:
All employees and management will refrain from unnecessary communication after regular working hours, but all employees in critical roles should respond in urgent situations.
To all employers and lawyers who think this is a clever trick, your employees will see right through you. Instead, take the "risk" of being pro-person:
- Define "unnecessary", "critical role", and "urgent".
- What are the time expectations for a response? Does that include 3 am on a Saturday?
- Provide example situations and behaviour. You won't be exhaustive, but even 2 or 3 scenarios will massively increase trust.
Yes, the policies you define may cost you some extra money 😨. For example, you may need to buy company phones for people you want to be in on-call rotation but have been paying for only 35 or 37.5 hours a week on paper. Yes, there will be months when you didn't use them, but think of it as very cheap insurance to keep your business operations afloat. Moreover, the effect on the organization will create a safer, more transparent culture for everyone.
Good time to be a worker in 2022
As the new year rolls around, Ontario's new law only further bolsters the idea that there's never been a better time for tech workers, especially those who want to be based in Canada:
- Tech salaries are finally starting to equalize intra-nationally and between the US and Canada
- Start-ups, including one based outside the US, are finally getting VC attention in a massive way
- Companies are reconsidering short-lived plans to location-adjust salaries as distributed work is here to stay
Canadian employees and companies that seize the unprecedented opportunity in front of them and can thrive amongst global competition will be posed to succeed.