Nonprofits are experiencing an HR crisis. Repealing Bill 124 can help.
Over the past few months, I’ve been in countless meetings where folks from across the nonprofit ecosystem have been talking about the rapidly intensifying HR crisis in our sector. I’m hearing panic, urgency, and even despair in their voices. Leaders are sharing how they are unable to recruit and retain staff, while workers are talking about burnout and mental health concerns. I also find myself thinking about the repercussions of this crisis on communities – people who need and deserve the best services and supports possible will not all receive it.
ONN has been thinking through how to support the sector through the HR crisis. What can help immediately and isn’t another toolkit? While the issues are not new, something feels different about this moment in time. Perhaps it’s the pandemic, the exponential increase in the cost of living, fatigue of serving communities with limited resources and increased demand, or that we might actually be at a point where parts of the sector might collapse.
I keep circling back to the fact that the real solution to combat the HR crisis is also going to take a long time to achieve. We need to address the devaluation of nonprofit work, which is rooted in gendered and racialized notions of which work is valuable. It results in low wages and benefits, no wage parity for the same jobs across sectors, antiquated funding agreements, lack of long-term labour force strategy and workforce development, and constraining employment standards and regulations. Bill 124 is at the crux of all these issues.
Bill 124 is one of the root causes of the nonprofit HR crisis
Aside from the broader public sector, like hospitals, schools, universities, Bill 124 applies to community-governed nonprofits that received $1 million or more in funding from the Ontario government in fiscal 2018/2019. The Bill came into effect for union employees with any collective bargaining negotiated after June 5, 2019 and for non-union employees on January 1, 2022. Both groups are subject to wage controls for three years. Alongside health care workers, nonprofit workers in shelters, food banks, mental health and addictions, employment and training, and immigrant services are also impacted by the bill’s wage restraints. While the legislation mainly applies to larger nonprofits, and mostly in social services, it affects a large percentage of the nonprofit workforce. The reality is that Ontarians and the economy rely on many of the workers that fall under Bill 124.
With legislation like this on the books, how do we recruit and retain folks in stressful and high-risk jobs that are already low-paid and devalued? It’s not just workers in health care that are leaving in droves because wages are not keeping pace with the 2022 world, but also community-based nonprofit workers whose organizations fall under Bill 124.
Here are the five ways Bill 124 acts as a barrier for nonprofits to recruit and retain staff:
- Uses overall budgets for wage controls: Bill 124 extends beyond provincially funded programs to cover an entire organization’s workforce, even when provincial funding may constitute a small fraction of an organization’s revenue. It interferes with the ability of community nonprofits to manage their own budgets and recruit and retain workers as best as they can within their organizational budgets.
- Enforces wage restraint on top of eroding funding levels: Bill 124 restrains compensation in provincially funded nonprofits that in many cases have already been subject to funding flatlines in the last five to ten years, despite growing demand for services. These flat-lined budgets mean nonprofit workers have already been subject to indirect wage restraint of up to 1.5 per cent per year over the past decade – a desperate game of catch-up. Inflation this year has started off at 4.7 per cent and so a 1 per cent wage freeze will mean a drop in real salaries for front-line workers.
- Creates an unfair playing field for talent recruitment: Many nonprofits compete for talent with for-profit service providers, who are explicitly exempt from Bill 124 wage restraint measures, despite operating in many of the same industries as nonprofits and getting funding from the exact same government program (long-term care, home care, child care, employment and training services, etc.). As such, Bill 124 sets up an unfair playing field for recruitment and retention in these areas.
- Does not example wage increases required by other legislation: Nonprofits have existing obligations to comply with other laws. Nothing in the Act explicitly exempts increases that are required for compliance with the Human Rights Code, the Employment Standards Act, or the Pay Equity Act. Being compliant with Bill 124 can mean not being compliant with other legislation that is set up to reduce labour inequities.
- Freezes wages for low-wage workers in a women-majority sector: Bill 124 essentially freezes the wages of front-line care workers – of whom almost 80 per cent are women. The lowest-paid workers in the nonprofit sector should not be subject to arbitrary wage controls, most of whom are women performing valuable care work, newcomers, Indigenous, Black, other racialized women, and women with disabilities.
Bill 124 hurts Ontarians
Just as Ontarians across the province rely on health care workers, they also rely on workers in home care agencies, long-term care homes, child care centers, shelters, addictions and mental health programs, employment and training supports, youth programming, and immigrant services. These nonprofits in turn rely on a strong and robust labour force. But the labour force is crumbling and Bill 124 is one of the reasons why.
There is a concrete solution: the Ontario government must repeal Bill 124. Communities can’t wait.