On November 4, 2021, the Ontario government released the 2021 Ontario Economic Outlook and Fiscal Review: Build Ontario plan which proposes raising the Ontario general minimum wage from $14.35 to $15.00 per hour, effective January 1, 2022. This is a greater wage rate increase than the one that came into effect on October 1, 2021, which was an increase of only 10 cents – from $14.25 per hour to $14.35 per hour. The government has explained that the cost of living has increased considerably over the past several months but wages have not progressed at the same rate.
What about employees with specialized minimum wage rates?
The proposed minimum wage rate increase would entirely eliminate the current $12.55 per hour minimum wage for liquor servers; these workers would instead be entitled to the general minimum wage of $15.00 per hour – a 19.5% minimum hourly wage increase. The rationale for this proposal is that liquor servers’ tips have increasingly been pooled and redistributed among many staff, making it difficult for these workers to make ends meet.
The minimum wage rate for students under 18 years of age who work a maximum of 28 hours per week when school is in session or during a school break or summer holidays will increase from $13.50 to $14.10 an hour.
Homeworkers (employees who work out of their own homes doing jobs such as online research or food preparation for resale; not to be confused with domestic workers) will see an increase from $15.80 an hour to $16.50 an hour.
The minimum wage for hunting and fishing guides working less than 5 consecutive hours a day will increase hourly from $71.75 to $75.00 per hour. Those who work 5 plus hours in a day will see an increase from $143.55 to $150.05 per hour.
What’s next for minimum wage increases?
Under this plan, annual increases based on the Ontario Consumer Price Index will continue to take place beginning October 1, 2022.
What does this mean for employers?
The Ontario government is, through the plan, attempting to promote economic recovery as well as recognize and respond to the impacts of the COVID-19 pandemic, especially for frontline workers in the midst of rapidly increasing costs of living.
As with the minimum wage rate increases last month, these new changes may introduce greater difficulties for employers who have been struggling with the continuing or residual impacts of the pandemic on their businesses. If employers have not already done so, it is critical for them to consider the way in which the increases in wages will affect their businesses, with respect to staffing, scheduling, and budgeting as a whole. Employers should also prepare to update their payroll systems to prevent any non-compliance with the proposed new rate once confirmed.