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Employer Advice – Ontario’s Minimum Wage Increase in Effect

Update: Ontario’s Minimum Wage Increase is in Effect, as of October 1, 2017

For three consecutive years, there have been increases in Ontario’s minimum wage. This fourth time around is no different. As of October 1, 2017, the general minimum wage is $11.60 per hour. However, a greater increase is coming sooner than expected. Earlier this year, the Ontario government introduced the Fair Workplaces, Better Jobs Act, announcing plans to increase the minimum wage from $11.60 to $15.00 per hour as of January 1, 2019. This means the general minimum wage is intended to increase again to $14.00 per hour on January 1, 2018.

How does the minimum wage increase affect small business owners?

Within the next 18 months, the minimum wage in Ontario will have increased by over 29 percent and this impacts small businesses the most. The reality is that businesses with smaller profit margins will be hit the hardest. Many operating small business owners have expressed concern to keep up with the demands associated with increased pay. For some, such as those in the restaurant industry, this means preparation for job cuts and reduced hours. For other business owners, this means increasing pay for employees currently working at $15.00 an hour, to ensure compensation is fair and competitive.

What can employers do to prepare for the minimum wage increase?

Only time will tell how the minimum wage increase will affect the job market. In the meantime, here are three things employers can do to help make this transition easier.

  1. Reevaluate your organization: Assess your organization, such as the number of employees, weekly hours, average pay, etc. You may be surprised to discover where money is being lost or where funds could be reallocated to supplement the pay increase for existing employees.
  2. Prepare to adapt to this new business climate: This change will impact the way you run your organization. As an employer, you will need to accept this as a new reality and prepare to do what it takes to keep your business running and your employees happy.
  3. Communicate with your staff: Talk to your employees, especially if this means job cuts. Let them know that you will try your best to ensure their job safety and that you plan to move forward in a fair and equitable manner.

Are you prepared to transition your business, as the minimum wage increases? Our team of employment law and HR experts are here to help your business grow. If you have questions about planning ahead, call Peninsula today. Get ready for the changes starting with our 24-hour helpline at 1(833) 247-3652.