What’s Minimum Wage in Ontario?

Minimum wage refers to the lowest hourly rate that a company is allowed to pay an employee. The province of Ontario is responsible for setting and enforcing the laws regarding minimum wage. The point of having minimum wage laws is to provide a base wage, or a form of “safety net,” to ensure that employees are adequately compensated for their work. This ultimately helps to reduce the risk of worker exploitation. Most employees, regardless of their employment status—whether full-time, part-time, casual, or paid on an hourly, commission, piece rate, flat rate, or salary basis—are entitled to minimum wage.

However, the Employment Standards Act (ESA) minimum wage requirements do not apply to certain jobs. Ontario’s minimum wage rates are expected to increase in October 2024. This increase reflects the 2024 Ontario Consumer Price Index (CPI).

What are the Different Categories of Minimum Wage Workers?

The minimum wage rates in Ontario are based on the ESA. In addition to setting the rates for general minimum wage, the ESA also specifies different rates for specific worker categories, including bartenders, hunting guides, students, and domestic workers. These categories have unique minimum wages due to the perceived distinctions between various kinds of employment and their respective work environments. The general minimum wage is the standard rate applicable to most workers in Ontario, set at $16.55 per hour as of October of 2023.

The student minimum wage applies to students under 18 years of age who work 28 hours a week or less during the school term or during school breaks and summer holidays, with the rate set at $15.60 per hour as of October 1, 2023.

On January 1, 2022, the minimum wage for liquor servers was eliminated. Previously, workers who served alcohol directly to consumers in licensed businesses were paid less. These workers are now eligible for the $16.55 per hour general minimum wage. As of October 1, 2023, the minimum wage for employees who work from home for pay is set at $18.20 per hour. This rate applies to both employers and employees. Workers in specific industries, such as hunting, fishing, and trapping, have unique minimum wages. For these employees, the minimum wage is $82.85 for fewer than five hours worked in a day and $165.75 for five or more hours worked, whether or not the hours are consecutive.

Additionally, the wilderness guides minimum wage applies to employees working as wilderness guides. These specific rates ensure that employees in various sectors are compensated fairly according to the nature of their work and working conditions.

How is Minimum Wage Calculated?

In Ontario, minimum wage is calculated based on hourly rates set by the provincial government. These rates are determined through a combination of factors including inflation, cost of living, economic conditions, and recommendations from advisory panels. The rates are reviewed and adjusted periodically to ensure they remain relevant and fair.

The calculation takes into account the Consumer Price Index (CPI), which measures the average change in prices over time that consumers pay for goods and services. By linking minimum wage increases to the CPI, the government aims to maintain the purchasing power of workers. Employers must ensure that employees are paid at least the minimum wage for all hours worked. This includes time spent on tasks such as training, attending meetings, and any other work-related activities.

Specific categories of workers, such as students, homeworkers, and hunting and fishing guides, have their own set minimum wages that reflect the unique nature of their work. Overall, the calculation of minimum wage in Ontario is designed to provide a basic standard of living for workers while considering the economic health of the province. It is important to note that breaks or lunches are not included in the calculation of one’s wages.

How is Minimum Wage Calculated in Cases where Room-and-Board is Provided?

In Ontario, an employee’s earnings may be reduced by the value of room and board benefits provided by their employer as part of their remuneration, subject to a maximum. The maximum amounts that can be deducted for room and board are specified by the ESA. As per the most recent update, for instance, the highest amount that can be deducted is $31.70 per week for a private room, and $2.55 per meal, up to a maximum of $53.55 per week for meals.

To ensure compliance with minimum wage laws, the calculation involves the following steps: first, determine the total monetary wage earned by the employee; second, add the value of the room-and-board provided, as per the ESA limits; and third, compare this total to the applicable minimum wage rate multiplied by the number of hours worked. If the total compensation (wages plus room-and-board value) does not meet or exceed the minimum wage requirement, the employer must adjust the monetary wage to ensure compliance.

Room and board arrangements and deductions must be documented in detail by the employer, and the employee must sign a written consent form for these deductions. This ensures transparency and fairness in the use of room and board deductions in minimum wage calculations.

What Happens if a Worker is Sent Home After Only Three Hours?

In Ontario, if an employee who is scheduled to work is sent home after working less than three hours, the employer is required to pay a minimum of three hours’ worth of wages. This rule is known as the “three-hour rule” and is stipulated under the ESA. The purpose of this rule is to compensate employees for their time and inconvenience when they are sent home early, ensuring they receive a minimum amount of pay.

The calculation for this situation involves paying the greater of two amounts: three hours at the employee’s regular wage rate, or the actual time worked at their regular wage rate plus half the remaining time to make up three hours. For example, if an employee’s regular wage rate is $16.55 per hour and they work only one hour before being sent home, they must be paid for at least three hours. Therefore, they would receive either $49.65 (three hours at $16.55) or the actual time worked plus the additional compensation to make up three hours, whichever is greater. This rule ensures that employees are fairly compensated even if their shift is cut short, providing a level of financial stability and fairness in the workplace.

Do Salaried Employees Get Minimum Wage?

In Ontario, salaried employees are also entitled to receive at least the minimum wage. The ESA mandates that the salary paid to these employees, when averaged over the hours worked, meets or exceeds the applicable minimum wage rate. This means that even if an employee is paid a fixed annual or monthly salary, the effective hourly rate must not fall below the minimum wage.

To ensure compliance, the employer must calculate the total wages paid to the salaried employee and divide it by the total number of hours worked in the pay period. If the resulting hourly wage is less than the minimum wage, the employer must adjust the salary to ensure it meets the legal requirement. This applies to both full-time and part-time salaried employees.

Additionally, certain salaried employees may be exempt from minimum wage provisions if they fall under specific categories defined by the ESA, such as managers and supervisors, who perform specific duties that qualify them for exemption. However, for most salaried employees, the minimum wage law applies to ensure fair compensation for all hours worked. Employers must maintain accurate records of hours worked by salaried employees to demonstrate compliance with minimum wage laws, ensuring that all employees receive at least the minimum standard of pay.