Ontario already has the highest minimum wage in the country. But on October 1, 2016, this rate will again increase for the tenth time since 2003. The new rates will affect the majority of employees who are eligible for minimum wage, including casual employees, full-time and part-time employees, and those paid an hourly rate, piece rate, flat rate, salary, or commission. The most common sectors employing minimum wage earners are agriculture, retail, accommodation, and food. Only a few industries and jobs are exempt from these provisions under the Employment Standards Act.
It’s no surprise that that the minimum wage is getting a boost, considering the government amended the ESA in 2014 to tie in any future minimum wage increases to the Consumer Price Index of Ontario, which was recommended by the Minimum Wage Advisory Panel. This new legislature was passed to ensure a fair, transparent, and consistent approach to setting Ontario’s lowest wages in a way that keeps up with inflation and allows for predictability for businesses to prepare for the increases. The new legislature for minimum pay increases is also part of Ontario’s economic plan to build the province and grow its economy and create jobs. This plan also includes helping people get and create jobs by expanding access to education and investing in skills and talent.
History of Increases
Between the years 1996 and 2003, the lowest wage that could be paid by employers was frozen at $6.85 per hour. But it then increased every year between 2004 and 2010 and again in 2014 and last year in 2015. The most recent boost went from $11 an hour to $11.25 an hour as a result of the Stronger Workplaces for a Stronger Economy Act passed in 2014.
The New Rates
The lowest-paid workers in Ontario will get a raise of 15 cents per hour on October 1, 2016. The new wage will be $11.40 an hour.
Student workers under the age of 18 will also see their minimum pay jump from $10.55 to $10.70 an hour. This rate applies to students who work 28 hours or less during the school year or who work during breaks and summer holidays.
Workers who do paid work for an employer in their own homes will also get 15 cents more per hour—that pay will go from $12.40 an hour to $12.55 an hour. Examples of homeworkers include those who answer inbound calls for call centres, those who sew clothes at home for clothing manufacturers, or those who write articles at home for marketing companies. Even students who are homeworkers must be paid this minimum pay.
In addition, licensed-restaurant and bar services who rely on tips will see their pay go up a dime, from $9.80 to $9.90. This new rate applies to employees who serve liquor to customers for businesses that have a license or permit to do so on their premises.
Hunting and fishing guides will also see an increase of 65 cents for working less than five consecutive hours in a day, changing the minimum pay from $56.30 to 56.95. These wages are based on blocks of time, rather than a rate per hour.
Coming into Effect
Though new minimum rates are published on or before April 1, they only come into effect on October 1 in order to give businesses time to prepare. Employers should know that if the changes to pay come into effect halfway through a pay period, the pay period should be treated as though it were two separate periods. Employees are entitled to the new rates that apply to each of those periods.
Is keeping up with minimum pay increases a headache for your business? Contact Liberty Staffing.