Minimum Wage – Is Inflation Driving it Up ?

Restaurant Worker Questions Ontario Minimum Wage Impact

Minimum wage is an employment standard that has traditionally been subject to regular, scheduled, increases. Recently, however, we have seen larger increases in minimum wage rates and rates changing with greater frequency – across the country. These changes are being driven by increased pressure on governments to support a living wage and by inflation. There is also an ESG connection for employers – An article in Forbes magazine noted that “…living wage concepts are receiving more attention in the context of economic policy, social responsibility and ESG investing”.

Recent Changes in Minimum Wage

With the exception of Alberta, every jurisdiction in Canada has made recent increases to its minimum wage, and several jurisdictions have further increases planned. Alberta’s minimum wage of $15.00 per hour was introduced on October 1, 2018, making it the first jurisdiction to have a $15.00 minimum wage. Its minimum wage has remained at $15.00 since that time.

The impact of inflation is evident in the recent changes to the minimum wage in Nova Scotia. Nova Scotia recently announced that it is accelerating its increase of the minimum wage. The province had set a plan to reach a $15.00 minimum wage by April 1, 2024, but it accepted the recommendations from the Minimum Wage Review Committee to set the minimum wage at $15.00 on October 1, 2023 – 6 months earlier than initially planned. Beginning on April 1, 2024, the minimum wage will increase based on the Consumer Price Index.

What is the Minimum Wage?

The minimum wage is the minimum amount that an employer must pay an employee. Most jurisdictions have a general minimum wage that is subject to certain exemptions and special rules. For example, in many provinces athletes are exempt from the minimum wage when they are engaged in activities related to their athletic endeavour. Other types of employment that are often subject to a different minimum wage include (the specific rules vary by jurisdiction):

• Students
• Liquor servers
• Domestic employees
• Camp workers
• Agriculture workers
• Fishers
• Construction workers
• Salespeople
• People employed through government support programs

The minimum wage in each jurisdiction, with announced increases, is as follows:

Chart setting out minimum wage in each Canadian jurisdiction

How is Minimum Wage Determined?

The approach to setting the minimum wage varies by jurisdiction. The requirement to pay the minimum wage is set by legislation, but the amount of the minimum wage may be set out in a regulation or an order. This allows the minimum wage to be adjusted quickly, without having to go through the full legislative process. The minimum wage may be determined by the government of the day or by an independent board. And it may be based on inflation, average wage rates or other economic factors.

Several provinces have tied future increases in the minimum wage to the Consumer Price Index or to a specific formula that incorporates that Consumer Price Index. This is the approach taken in Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Saskatchewan.

What Else Do You Need to Know?

In addition to paying the minimum wage, some jurisdictions require you to post information about the minimum wage. For example, in New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Saskatchewan employers must post a copy of the minimum wage regulation or order (as applicable). Some other jurisdictions require employers to post an employment standards poster which may also have reference to minimum wage.

How Compliance Works Helps HR Professionals

Staying on top of compliance deadlines and constantly changing employment laws can be challenging and time consuming. Compliance Works provides timely updates on changes to employment laws across Canada and our Latest Updates ensure that you never miss a change.

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About the author

Gayle Wadden
Gayle Wadden CLO, Compliance Works
Gayle Wadden is a senior lawyer with deep experience in employment and corporate law. She is responsible for overseeing Compliance Works’ legal content.

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