Effective October 1, 2024, Ontario’s minimum wage will rise to $17.20 per hour, representing a 3.9% increase from the current rate of $16.55. This adjustment is part of the annual review process outlined in the Employment Standards Act (“ESA”), which ties minimum wage increases to Ontario’s inflation levels.
Impact of the Increase
With this increase, Ontario will have the second-highest minimum wage in Canada, just behind British Columbia’s rate of $17.40 per hour. The Ontario government announced this change well in advance to provide employers with ample time to prepare and adjust their payroll systems accordingly.
This increase translates to an additional $1,355 in annual earnings for full-time employees working 40 hours per week at the general minimum wage. As of 2023, approximately 935,600 workers in Ontario were earning at or below the new $17.20 per hour rate, highlighting the significant impact of this change.
Living Wage Considerations
It’s important to note that while the minimum wage increase to $17.20 is substantial, it may not meet the living wage standards across all parts of the province. The Ontario Living Wage Network has reported that the actual living wage varies significantly among different regions.
As of 2023, these figures range from $18.65 per hour in southwestern Ontario to $25.05 per hour in the Greater Toronto Area. This means that despite the minimum wage increase, there remains a considerable gap between the new minimum wage and the calculated living wages in many parts of Ontario. The disparity is particularly pronounced in high-cost areas like the Greater Toronto Area.
History of Minimum Wage
This latest increase continues the trend of minimum wage adjustments in Ontario. In January 2022, the minimum wage was raised to $15.00 per hour, and subsequent increases have been linked to inflation adjustments.
Takeaway
Employers should be aware of these changes and ensure their payroll systems are updated to reflect the new minimum wage rate. It’s also crucial for businesses to review their overall compensation structures and consider how this increase might affect wage differentials within their organizations.
Employees should familiarize themselves with how their wages are calculated, including any overtime or special rates that may apply.
As employment lawyers Toronto, we recommend that employers review their employment contracts, policies, and practices to ensure compliance with the latest minimum wage regulations. If you have any questions about how these changes may impact your business, or if you are an employee concerned about compensation, we encourage you to contact employment lawyers at Sultan Lawyers online or by telephone at 416-214-5111 today.
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