Once upon a time, we said Less Money, Mo’ Problems in reference to Canada’s proposed tax reforms. That’s not always the case and, as it turns out, we can’t let an opportunity to quote the late, great Notorious B.I.G. just pass us by. So, we masterfully relate his words to BC minimum wage increases.

Mo’ Money | Increases to BC Minimum Wage

In keeping with the NDP’s election promise to increase minimum wage to at least $15/hour by 2021, and following the report of the independent Fair Wages Commission in October 2017, the BC Government recently implemented the first of four planned minimum wage increases. As set out the BC Government recent news release, effective June 1, 2018:

• General minimum wage increases to $12.65 per hour, an increase of 11.5% or $1.30 per hour;
• Liquor server minimum wage increases to $11.40 per hour, an increase of 12.9% or $1.30 per hour;
• Resident caretaker minimum wage increases to $759.32 per month for those who manage from 9-60 units (plus $30.43 per unit), or $2,586.40, for 61+ units, an increase of 11.5%;
• Live-in camp leader minimum wage increases $101.24 per day, an increase of 11.5%.

Three additional increases to BC minimum wage rates are expected on June 1 of 2019, 2020 and 2021, when the general minimum wage will be at least $15.20 per hour and it is expected that there will no longer be a separate minimum wage for liquor servers.

Farm workers will also receive an 11.5% increase to minimum piece rates on January 1, 2019, with further assessment to be undertaken in the interim.

Mo’ Problems | Additional Considerations

Although BC employers already paying at or just above the new rates do not need to make any immediate changes to payroll, the recent and planned increases to minimum wage do give rise to a couple of potential problems that such BC employers will need to consider:

1. Review compensation policies and timelines to ensure that any anticipated internal wage increases are consistent with the BC Government’s timeline and that there is time to adjust compensation according to the June 1 deadline each year into 2021. If no compensation policies and timelines are currently in effect, now may be a good time to consider implementing them.
2. Consider the broader workplace impacts of the recent and anticipated minimum wage increases on employees who are paid just above minimum wage – for example, a supervisor who was paid $1.50 per hour more than a minimum wage employee she supervises on May 31, 2018 may take issue with the absence of a corresponding increase to her compensation after June 1, 2018, when the wage difference for the supervisory duties is reduced to $0.20 per hour. While BC employers are not (at the date of this post) required to make any wage increase for such supervisory employees, there are practical/workplace morale considerations that may require review of compensation for non-minimum wage earners going forward into 2021.

Although the statutory changes to minimum wages will increase payroll costs for some BC employers, for those who review employee compensation more broadly and decide to provide increases to employees earning more than minimum wage, such employers should also consider the opportunity to review existing employment contracts in order to determine whether contractual gains may be made in connection with a (non-statutory) wage increase. For example, if there is an issue with the signature of an employment contract, if a contract does not contain an enforceable termination clause, or if the business would benefit from implementing restrictions on an employee’s activities after the end of employment, giving the employees a pay increase – beyond minimum wage requirements – is a great opportunity to clean up contractual issues, providing financial predictability at the point of termination and helping mitigate the risk of litigation.

Questions?

If you have any questions about minimum wage laws or the workplace considerations and strategies underlying their implementation or other wage adjustments, contact one or two of our labour and employment lawyers.