The minimum wage in Ontario is going to increase on October 1, giving thousands of workers a slight paycheque bump just in time for Thanksgiving.
It can often fly under the radar, but the frequent review of the minimum wage Ontario governments perform is an important part of maintaining a healthy standard of living.
If you live in Ontario, you may be affected by the coming wage boost. This Ontario minimum wage guide will detail the ins and outs of the province's current system and discuss what the future holds for workers.
Ford's New Minimum Wage Hike Announcement
15.00/hour - New Ontario Minimum Wage Rates Starting January 01, 2022
On Tuesday, November 2, 2021 at a press conference in Milton, Ontario Premier Doug Ford announces an increase to the minimum wage to $15 per hour and it will be in effect on the first day of January year 2022.
It's a big jump of increase compare to the recently 10 cents increased last October 1st of this year.
Premier Doug Ford said, "Workers deserve to have more money in their pockets."
Note: As of this time, the bill has not been introduced and there has been no change to the minimum wage requirements.
New Minimum Wage Rates in Ontario (October 1, 2021)
Under the Making Ontario Open for Business Act this increase is tied to the Ontario Consumer Price Index for 2020.
The increase to the general minimum wage, students, liquor servers and homeworkers is 10 cents, which brings the new rates to $14.35, $13.50, $12.55, and $15.80 respectively.
Same as well to specialized minimum wage rates that will take effect on October 1, 2021. Below are the detailed chart for the better understanding.
Minimum Wage Rate
Past Rates (Jan. 1, 2018 to Sep. 30, 2020)
Present Rates (Oct. 1, 2020 to Sep. 30, 2021)
New Rates (Oct. 1, 2021 to Sep. 30, 2022)
General minimum wage
$14.00 per hour
$14.25 per hour
$14.35 per hour
Student minimum wage
$13.15 per hour
$13.40 per hour
$13.50 per hour
Liquor servers minimum wage
$12.20 per hour
$12.45 per hour
$12.55 per hour
Homeworkers wage
$15.40 per hour
$15.70 per hour
$15.80 per hour
Hunting and fishing guides minimum wage
$70.00 Rate for working less than five consecutive hours in a day
$140.00 Rate for working five or more hours in a day whether or not the hours are consecutive
$71.30 Rate for working less than five consecutive hours in a day
$142.60 Rate for working five or more hours in a day whether or not the hours are consecutive
$71.75 Rate for working less than five consecutive hours in a day
$143.55 Rate for working five or more hours in a day whether or not the hours are consecutive
Wilderness guides minimum wage
Rates from June 3, 2019 $70.00 Rate for working less than five consecutive hours in a day $140.00 Rate for working five or more hours in a day whether or not the hours are consecutive
$71.30 Rate for working less than five consecutive hours in a day
$142.60 Rate for working five or more hours in a day whether or not the hours are consecutive
$71.75 Rate for working less than five consecutive hours in a day
$143.55 Rate for working five or more hours in a day whether or not the hours are consecutive
How the Minimum Wage in Ontario Is Calculated
The Employment Standards Act (ESA) outlines the rules surrounding employee pay, including minimum wage rules. The ESA is regularly amended to protect workers against economic, governmental, and societal changes.
As it is with most provinces, Ontario minimum wage rules are reviewed, and often adjusted, annually. To keep pace with inflation and ensure a livable wage for its workers, Ontario bases its minimum wage on changes in the Consumer Price Index.
This rate applies to most workers:
Covered Period of Payment
Computation
Earned Income
Weekly Basis
40 hours x $14.35
$574.00
Bi-Weekly Basis
80 hours x $14.35
$1,144.00
Annual Payment
40 hours x 52 weeks/year x $14.35
$29,848.00
General Minimum Wage
Ontario is the hub of big business in Canada, boasting the nation's highest GDP and some of the highest average pay rates. Its general minimum wage of $14.25/hr is the third-highest among provinces, trailing only British Columbia ($15.20) and Alberta ($15.00).
The general minimum wage applies to anyone who works in Ontario, whether they're full-time, part-time, or casual employees. On October 1, the minimum wage will rise by $0.10 to $14.35/hr.
Although it applies to the majority of Ontario workers, certain groups have specialized minimum rates.
Student Minimum Wage
A student minimum wage is a reduced hourly rate for any student under 18 years old. If they work 28 hours or less during the week while school is in session, they earn $13.40/hr. The same rate applies to students working while school is on a holiday or summer break.
There are a couple of key exceptions to the student minimum wage rules. Students who work more than 28 hours a week while school is in session earn the general minimum wage. Meanwhile, students who work as homeworkers are subject to the homeworkers rate rather than the student rate.
In recent years, the student minimum wage has undergone the same increases as the general minimum wage. It will see a similar $0.10 jump in October, moving to $13.50/hr.
Homeworkers Minimum Wage
The number of people working from home in Ontario and across Canada has gone up dramatically in the last two years. Many workers have subsequently gotten a substantial pay raise because the homeworkers rate of $15.70 far exceeds any other Ontario minimum wage level. The rate goes up to $15.80 in October. For more on the topic of working from home, be sure to check out our piece how to stay organized while working from home.
Fishing, Hunting, and Wilderness Guides Minimum Wage
Hunting, fishing, and wilderness guides are paid according to time blocks rather than hourly rates. The minimum daily rate is $71.30 if the guide worked less than five consecutive hours. If a guide works more than five hours during a day, whether those hours are consecutive or not, the minimum wage is $142.60.
Guides will get a pay raise in October as well, which is relatively in lock-step with the hourly minimum wage hike. For five or fewer hours worked, the minimum wage will increase to $71.75. Guides that work more than five hours will earn a minimum of $143.55 for the day.
Liquor Servers Minimum Wage
Under the expectation that they'll earn tips as part of their income, liquor servers have a much lower minimum wage than the rest of Ontario workers. Liquor servers are people who work at a business licensed to sell liquor and regularly earn gratuities as part of their income.
The current liquor server's minimum rate is $12.45. In October, it will follow the other categories and increase $0.10 to $12.55/hr.
Special Rules
The minimum wage in Ontario follows particular rules surrounding minimum work times, overtime pay, and room and board.
The "three-hour rule" applies to anyone who normally works more than three hours a day. If an employee reports to work but has to leave less than three hours after getting there, they must still be paid for three hours of work. For example, a minimum wage employee that leaves after one hour will still get two hours of additional pay at their regular rate of $14.25/hr.
Overtime is paid after the first 44 hours of work each week for non-managerial workers. After those initial hours, pay jumps to 1.5x the normal rate. Although it doesn't apply to all workers, a person earning the general minimum wage earns $21.37/hr during overtime.
Finally, employers can deduct room and board, up to a certain amount. At most, an employer can charge an employee $85.25 per week if they provide a private room and meals.
Minimum Wage Calculation for Commission Basis Worker
Along with liquor servers, salespeople have one of the most common and easiest jobs to get in Canada. Commission and incentive-based employees are protected under the general minimum rules, guaranteeing a minimum rate for each pay period.
For example, if one commission-based employee works 40 hours a week and earned $900 in commission, they get a $900 paycheque, minus deductions, on payday. Meanwhile, their colleague, who was having an off week, only earned $200 in commission for 40 hours of work. At the $14.35/hr minimum wage, they should earn $574, so their employer must pay an extra $374 to make up for it.
Minimum Wage Calculation for Different Typical Case
The minimum wage in Ontario gets more complicated as you dissect different industries. Here are a couple of common real-world scenarios to show how the minimum wage is calculated in the province.
Typical Case 1
There are two employees who both work 40 hours a week at a busy bar and grill, one a liquor server and the other a line cook. The line cook works purely on an hourly basis with no incentives. They earn at least the general minimum wage rate of $14.25/hr, resulting in a $570 paycheque before taxes and other deductions.
The liquor server earns gratuities as part of their work, so they earn at least the liquor server's minimum wage of $12.45/hr. For the same 40 hours, they are owed at least $498 from their employer before deductions. Any tips and gratuities are extra earnings on top of the hourly rate.
Typical Case 2
A retail store has two employees, a 17-year-old part-time admin and a 25-year-old commissioned salesperson. The admin is paid the reduced student rate of $13.40/hr, earning at least $375.20 for 28 hours worked. Meanwhile, the commissioned salesperson is paid either the general minimum wage of $14.25/hr for the hours they work or their commission, earning whichever is higher.
Minimum Wage History (for the Last 5 Years)
On the employee's side, there is the argument that the minimum wage falls short of the living wage, the amount that someone needs to afford the cost of living in Ontario. Employers argue that raising the minimum wage will result in job losses, cut hours, and more automation.
The minimum wage in 2016 was $11.40. It jumped slightly in October 2017 to $11.60. This continued a pattern of slow growth in the minimum wage Ontario workers had been seeing for the previous decade.
The minimum wage's slow and largely inadequate growth came to a stop on January 1, 2018, when Ontario raised the minimum wage by a whopping $2.40/hr. The new $14.00 general minimum wage was one of several changes to employment regulations in the province, all coming about to better meet the needs of workers in a rapidly changing economy.
It was a big gain for workers, but employers would soon get a substantial win centred around one massive failed promise.
The 2017 legislation that brought the $14.00/hr minimum wage in 2018 didn't stop there. Another essential detail of the plan that was heavily favoured by worker advocates was a subsequent $1.00/hr increase the following year. But if you make the minimum wage in Ontario currently, you're probably wondering why you aren't earning $15.00/hr.
The resolution to raise the minimum wage by $1.00 was cancelled in 2019. Politicians reversed the decision claiming that it would be bad for Ontario's economy and the ability of employers to offer enough jobs and hours. Instead, the minimum wage got the more modest uptick of $0.25 on October 1, 2020, bringing us our current $14.25/hr rate.
Federal Minimum Wage Updates
The most recent survey found that a little over 900,000 Canadian workers are part of the Federally Regulated Private Sector (FRPS). Some of the key industries in the FRPS include:
Banking
Telecommunications
Radio and TV broadcasting
Air, marine, rail, and road transit services
Postal services and pipelines
Ontario supports the most FRPS employees of any province at 39% of the nation's total. For these 350,000 Ontario workers, the wait for a $15.00/hr minimum wage will be short.
On December 29, 2021, the federal minimum wage will rise to $15.00/hr. In light of the essential work done by low-wage workers during COVID, the Canadian government felt justified in taking a more meaningful step toward reducing poverty and improving living standards in the FRPS.
At Insurdinary, We Pride Ourselves on Informing You
What does the future hold for the minimum wage in Ontario after October 1? The next provincial election is coming in June and depending on who emerges victorious, low-wage workers may get even more help in sustaining a positive standard of living.
You may know us for insurance, but at Insurdinary, we understand that there is a lot to account for when making the best financial decisions. We believe that knowledge is power, and that's why we invest ourselves in educating our customers on all things Canadian. For more information on making the right investments to fit your life goals, contact our team today.
