Understanding the Minimum Wage Increases

Hiring manager conducting a job interview with a prospective employee

Understand which territories are increasing their minimum wage so you can pay your employees properly and not get penalized or audited.

Across Canada, provincial and territorial governments have been raising minimum wage. Most jurisdictions plan to continue increasing minimum wage over the next several years. In some instances, the increases are tied to the Consumer Price Index, while in others there is a commitment in place for incremental increases.

Presently, the highest minimum wage is Ontario at $14.00 per hour, with Alberta not far behind at $13.60 per hour. Alberta has committed to move to $15.00 per hour as of October 1, 2018. Ontario will move to $15.00 per hour on January 1, 2019. British Columbia will increase minimum wage annually until it achieves $15.20 per hour on June 1, 2021.

There are exceptions to the required minimum in Employment Standards Legislation. For instance, in British Columbia the minimum wage for a “Liquor Server” is $10.10 per hour. A “Liquor Server” is defined as an individual whose primary duties are to serve food or drink, or both, and who, as a regular part of their employment, serves liquor directly to customers in premises with a liquor license. This definition would apply to most servers in licensed restaurants. In Ontario, Liquor Servers and students have lower minimum wages of $12.20 per hour and $13.15 per hour, respectively. In Quebec, as of May 2018, minimum wage for workers who receive tips is $9.80 per hour and Nova Scotia’s minimum wage is $.50 lower for new/inexperienced workers in the first three months.

Where vacation pay and vacation time stand

Vacation pay is much more uniform. Most jurisdictions provide for 4% vacation pay for the first five years and 6% thereafter. Similarly, vacation time in most jurisdictions is two weeks after the first year of service increasing to three weeks of vacation after five years of service. The Maritimes and the Territories are less generous and don’t advance employees to three weeks of vacation until after six to eight years.

What this means for employers

Wages and benefits are significant expenses that affect business profitability. Making adjustments to compensate for higher labour costs will ultimately be passed on to consumers. Failing to pay minimum wage as required and/or failing to provide vacation pay and time off as required by Employment Standards Legislation can result in significant penalties to employers.

An employer cannot avoid the minimum standards established by Employment Standards Legislation. Any contract that purports to provide for compensation or vacation time that does not meet the legislated, mandatory minimums is unenforceable. Further, Employment Standards Officers will assess both back pay and penalties in circumstances where complaints are made and may audit businesses where violations come to their attention.

It is vital to be current with this information so as to not run afoul of the Employment Standards Legislation. Information is readily available online and most provinces refer to their government legislation as “Employment Standards.”