Earlier this week, Ontario premier Kathleen Wynne announced a plan to increase the province’s minimum hourly wage from $11.40 to $15 by 2019.
“30% of us earn less than $15/hour. Try raising a family on that. We’re raising the minimum wage to $15/hour so more people can get ahead,” tweeted Wynne.
The announcement was part of a larger overhaul of provincial labour legislation called Fair Workplaces and Better Jobs, which includes, among other proposals:
- Raising the minimum wage to $15 an hour by January 1, 2019
- Ensuring that part-time workers receive equal pay for equal work, compared to full-time employees
- Increasing minimum paid vacation entitlements to three weeks after an employee has been with a company for five years
- Requiring all employers to allow employees 10 personal emergency leave days per year (two of which are paid)
“People are working longer, jobs are less secure, benefits are harder to come by and protections are fewer and fewer,” said Wynne in her speech on Tuesday. “In a time of change like this, when the very nature of work is being transformed, we need to make certain that our workers are treated fairly.”
The changes are largely informed by the Changing Workplaces Review, a recently-released 419-page review of the Labour Relations Act and the Employment Standards Act. “They concluded, and I quote, that ‘there are too many people in too many workplaces who do not receive their basic rights.’ Frankly, that’s just not good enough for Ontario,” said Wynne.
However, Wynne’s proposed changes have a lot of small businesses worried.
Julie Kwiecinski, director of provincial affairs at the Canadian Federation of Independent Business (CFIB) explained the concerns in an interview with the Toronto Sun:
“Going from $11.40 to $15…some people say how much of an impact can that have? We’re talking about small businesses — 86% of our membership is under 20 employees. So as a small business, our members don’t have the financial leeway or wiggle room to deal with any added direct input costs for anything right now. They’re not big corporations.”
The CFIB issued a release shortly after Wynne’s announcement that explained how her proposed changes would hurt small businesses, especially when paired with other changes, like “the Employment Insurance premium increases, Canada Pension Plan expansion, cap and trade costs, and skyrocketing hydro rates.”
HR strategist Janet Candido echoed similar implications in the Globe and Mail:
“While the change to minimum wage is only targeted at those workers earning less than $15 per hour, the overall impact is scalable as the implications for compensation are far wider than simply bumping up the pay. In addition to forking over more for items calculated as a percentage of pay, such as payroll taxes, CPP, EI, benefits and company pension contributions, many business owners will also have to address pay increases for workers who are already earning more than $15 per hour to remain competitive while ensuring that pay is based on value to the organization.”
In short, Wynne’s proposed changes could mean more protected workers, but additional costs for the province’s 400,000-plus small businesses – most of which simply can’t afford them.
Stay tuned for more coverage as we get a clearer picture of what these proposed changes mean for small businesses.