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Canada: Growing Pains As Ontario Employers Adjust to New $14 per Hour Minimum Wage

On January 1, 2018, Ontario’s minimum wage rose from $11.60 to $14.00 per hour. If re-elected, Premier Kathleen Wynne has pledged to raise the minimum wage once again to $15.00 per hour effective January 1, 2019.

Many businesses have responded by reducing other labour costs that they could still control, such as employee benefits and “perks,” such as paid breaks. Some businesses based in Ontario have found themselves in the media spotlight after letters or memos to employees about changes to breaks, tipping practices or employee benefits have found their way into the hands of the press. Many employees, particularly those in the restaurant industry, have reported that their hours have been reduced, that paid breaks have been eliminated, and that they have been asked to pay for a greater percentage of their health and dental benefits.

The public response to media reports about certain employers’ actions has been swift and included countless negative social media posts, as well as initiatives by labour advocacy groups and trade unions. The provincial government responded by announcing that it would be stepping up enforcement to ensure that employers complied with the new minimum wage, and Labour Minister Kevin Flynn expressed disappointment that some employers were “abandoning the spirit” of the legislation.

As the aforementioned employers have learned, actions taken to reduce labour costs may have significant unintended reputational costs. In the age of social media, this serves as an important reminder to employers that today’s internal memo can easily become tomorrow’s headline. Accordingly, it is crucial that all communications with employees are compliant with all applicable legislation and in line with the employer’s public image.