Deadbeat Boss

CHELSEA PHELAN-TRAN STILL HOPES TO GET PAID. She’s got the law on her side. But, it hasn’t helped much.

Chelsea got cheated out of $3,500 in pay in late 2012. It was the pay she didn’t ask for while working two months for free for troubled Toronto-based book publisher McArthur & Company. She wanted to help her boss Kim McArthur turn things around. McArthur couldn’t. Chelsea had to move on. McArthur did not give Chelsea what she owed her.

Chelsea sent polite emails to appeal to McArthur to do the right thing. She wrote:  “I have three months of bills with interest piling up. It also doesn’t help that Christmas is around the corner and taking every extra penny I have.”

Chelsea ended the message with a smiley face, sending her best wishes to the woman who owed her $3,500 in wages. She never heard back.

In June 2015 she was still waiting. It didn’t matter that the Ministry of Labour ruled she was legally owed the money. It didn’t matter that Kim McArthur had started a new business. The ministry was done. 

They did rule Chelsea was owed $3,500 and ordered McArthur to pay. But by the time they acted McArthur & Company was out of business. The ministry passed the case on to a private collection agency. After a year the agency returned the file to the ministry. 

There are no time limits on collections, and employers remain liable for unpaid wages. However, in reality files returned from the collection agency are essentially dead in the water.

The ministry could use the courts to pursue McArthur. There is no sign they have, or intend to, do anything like that. Its only action was to add a $350 fine to the uncollected wages.

Meanwhile, the woman selected as the 2001 Canadian Women Entrepreneur of the Year carries on. A June 2014 Facebook post shows Kim McArthur has a new publishing outfit called McArthur McKim. 

“It’s a criminal act that she committed. She broke the law,” says Chelsea Phelan-Tran. “She could just do it again and get away with it...again.”

Possible Solutions

Here’s how the province could ensure more workers get the wages they’re owed.

Establish a wage protection fund

The province used to maintain a $175-million wage protection fund. Employees could apply to receive up to $5,000 in unpaid wages when their bosses went bankrupt. That was scrapped by former premier Mike Harris’s Conservative government. Such a fund would provide at least one additional protection for workers, who are too often forced to “eat the loss.”

Better inspections

The Ontario Ministry of Labour should focus on deterring wage theft through more unannounced inspections and heftier penalties for violations. Something that could help finance a wage protection fund.