The New Minimum Wage

As of January 1, the minimum wage in Ontario has increased for most workers to $14.00 an hour. Already, there have been reports of some employers attempting to cut back in other ways to compensate for higher labour costs, and an increase in calls to the Ministry of Labour about employment standards complaints.

Minister criticizes “bullies” that claw back employee benefits

Speaking at Queen’s Park on January 8, the Ontario Labour Minister Kevin Flynn criticized employers that attempted to compensate for a higher minimum wage by cutting employee benefits. The ministry will be hiring 175 new enforcement officers as well as additional support staff, and is sending inspectors to investigate any reported contraventions of the Employment Standards Act.

Legal consequences for making changes to perks or benefits

The changes to the minimum wage do not impact the legal right of employers to determine whether to offer any additional perks or benefits to their employees. Companies may attempt to “claw back” the additional costs of a higher minimum wage by reducing paid breaks, eliminating some overtime or other shift incentives, and asking employees to make higher contributions to group benefit plans. Provided that they stay within employment standards requirements, there is little recourse for an employee that has seen a small reduction in these perks.

However, employers should take care to avoid allegations of constructive dismissal, which can result if the changes to employee benefits amounts to a fundamental change to their total compensation.

Employment lawyers advising businesses and employees about the new minimum wage

At Duncan Linton LLP, we have been providing employment law advice to the greater Waterloo community for over 150 years. We have experience advising companies of all sizes about employment law matters, and can answer questions from employers about the new minimum wage in Ontario. We also advise individuals about their rights under the Employment Standards Act.

Call 519-886-3340 to schedule an appointment with one of our employment lawyers, or contact us online.