As of October 1, 2022, minimum wage rates in Ontario have increased. The general minimum wage for provincially regulated employees has increased by 50 cents from $15.00 to $15.50 per hour. This raise represents a 3.33% rise in response to rising costs and inflation.
Generally, minimum wage requirements apply to all employees, whether they are full-time, part-time, or hourly. There are special minimum wage requirements for specific categories such as students, liquor servers, hunting, fishing and wilderness guides, and home workers. The Employment Standards Act (ESA) Guide nicely outlines all minimum wage requirements here.
For employees whose pay is based wholly or partly on commission, their pay must amount to at least the minimum wage for each hour the employee has worked.
What is an Employer’s Obligation When Minimum Wage Increases?
To meet ESA standards, an employer must only ensure that their employees are paid the minimum wage. For salaried employees or employees who are already being paid above minimum wage, employers have no obligation to increase their wages as minimum wage goes up. Outside of meeting minimum wage requirements, Ontario employment and labour laws do not set out when employers need to provide a raise.
If an employer does not meet the ESA minimum wage requirement, they open themselves up to a Ministry of Labour complaint and can be on the hook to repay an employee’s lost wages. An employee has two years to bring an ESA claim, so employers want to ensure they are up to date with minimum wage increases to avoid a claim for back pay.
What About Minimum Wage Requirements for Remote Workers?
As we continue to see an increase in remote work, we are also seeing more and more employees working from different provinces than their employer. It’s important to note that minimum wage requirements differ from province to province. Employers need to ensure they are abiding by the correct employment standards legislation when determining an employee’s minimum wage requirement. Generally, an employer should consider the location an employee will be performing their work to determine which provincial legislation will apply.
Key Takeaway for Employers
- Employers should review existing employment contracts and their payroll systems to ensure that employees’ pay rates are keeping up with the recent change to the minimum wage.
- Employers should keep in mind the categories of workers that may be exempt from minimum wage requirements or that may be subject to different pay calculations.
- Generally, the rule of thumb is that minimum wage changes are introduced on or about April 1st of every year and come into effect on or about October 1st of the same year. It’s good to keep these dates in mind, so employers know when payroll may change.
- Employees have up to two years to make a claim under the Ontario Ministry of Labour, so employers should be sure to keep up with annual wage and payroll requirements so they are not on the hook for an unexpected claim.
- Minimum wage differs from province to province. Employers need to ensure they are meeting the legal wage requirements of the province where their employees will physically be performing their work.
If you need help with navigating the minimum wage increase, get in touch for a consultation.