Minimum wage

There is always a lot of controversy when the government announces their intentions to increase minimum wage, especially among small business owners.  In Nova Scotia, the minimum hourly wage is currently $8.60.  Under current plans, the minimum hourly wage will increase to $9.20 on 1 April 2010 and to $9.65 on 1 October 2010.

For employers an increase in the minimum hourly wage has a ripple affect across their bottom line.

  • The employer must remit $4.95 for every $100.00 of payroll as its share of Canada Pension Plan (CPP) contributions to a maximum of $2118.60 for a maximum insurable level of $46,300.
  • Worker’s Compensation (WCB) premiums are also based on payroll and range from a low of $0.46 per $100.00 to more than $10.00 per $100.00 of payroll depending on the industry to a maximum insurable level of $49,400.  (For restaurants, the industry rate is $1.73.)
  • The employer must also pay Employment Insurance that is equivalent to $2.42 for every $100.00 of payroll to a maximum of $1024.51 for a maximum insurable level of $42,300.
  • In addition, the employer must set aside 4% of gross wages for vacation pay.

What does this all mean?  Well, raising the minimum wage by $1.05 per hour will cost for each employee working 40 hours per week in a restaurant:

$2184 in extra wages

$108.10 in additional CPP premiums

$52.85 in additional EI premiums

$87.36 in additional vacation pay

$37.78 in WCB premiums

 Total:  $2470.09

Benefit payments that are tied to wages will also increase.  For example, life insurance coverage is a function of wages earned.  Increased wages means higher life insurance coverage and, concomitantly, higher life insurance premiums.

Then there is the question of internal equity.  A raise in the entry level wage will put upward pressure on existing wages.  The fact is that tenured and high performing employees demand to be paid more than the new or entry level employee.

The following table provides a comparison with other provinces and territories.

Jurisdiction Min Hourly Wage Remarks
British Columbia $8.00
Alberta $8.80
Saskatchewan $9.25
Manitoba $8.75 $9.00 on 1 Oct 2010
Ontario $9.50 $10.25 on 31 March 2010
Quebec $9.00
New Brunswick $8.00 $8.25 on 1 Sep 2010
PEI $8.20 $8.40 on 1 0ct 2009
NFLD $9.00 $9.50 on 1 Jan 2010 and $10.00 on 1 July 2010
Nova Scotia $8.60 $9.20 on 1 April 2010 and $9.65 on 1 Oct 2010
Yukon $8.89 Annual increase on 1 April tied to CPI in Whitehorse
Nunavut $10.00
NWT $8.25

It should be noted that there are variances in minimum wage strategies between Provinces.  For example, in British Columbia the minimum hourly wage is $6.00 for the first 500 hours for an employee who has 500 or fewer hours of cumulative paid employment experience with one or more employers. In Quebec, the minimum hourly wage for employees who receive tips is $8.00 while in Ontario, the minimum hourly wage for liquor servers is $8.25.  Some provinces have a minimum piece rate for farm workers, or a minimum daily rate for hunting and fishing guides.   Employers must be aware of the minimum wage regulations in their jurisdiction.

Give us your opinion and answer this week’s poll question:

What do you think about the minimum wage level in Nova Scotia?

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8 Responses to Minimum wage

  1. Owner 2010/01/13 at 6:58 pm #

    Good chance this will end my cleaning business. Residential clients will not pay much to have thier homes cleaned; people simply do not understand the expenses involved as it is and are unwilling to pay much for the service.

    From past experience clients will not accept a price increase and will drop us, so that leaves us with little to no profit margin- ie no reason to continue the business.

    I admit minimum wage workers are the hardest working and least respected workers, and they need this, but my business will likely die from it.

  2. worker 2010/02/16 at 4:19 pm #

    Minimum wage goes up and I work for a company that DOES NOT give us the full increase…Some of us will only get 10-15cents. What a crock! People that just start the job make almost the same as some of us who have been there for years. It just doesn’t seem fair

  3. worker 2010/02/24 at 3:53 pm #

    My employer Teletech is refusing to do a increase, as all employees are currently above the 9.65/HR for nova scotia. Until it goes above 10.00, we won’t see any increase.

  4. Ann Hatt 2010/03/02 at 11:48 am #

    I have been an employer. I have often heard this same “panic response” every single time there has been an increase in wages, every time a paid holiday has come along etc. etc.

    I always made it a practice to pay my employees an amount above min wage. I did not like to constantly loose employees after having spent time in training etc.

    What I have learned is that good employees are a valuable resourse to any business. They can make or break you. When you create a favorable work enviroment by giving breaks, decent wages, flexability where needed, respect for everyone and what they bring to the table you earn respect and loyalty.

    It has helped to build my business in the past and enursed me of long term employees. Your employees have families to care for just like you. It may help to remember that.

  5. G. Abato & Sons Italian Market 2010/03/24 at 2:46 pm #

    Very detrimental to small restaurant business…..

  6. Susan 2010/04/06 at 4:53 pm #

    The way that I see it, is that most places that do get funded federally do not do the increase right away because it is not included in the funding that they get and it has to last all year and when pay increases for one person other people will end up getting laid off and that is not right.

    I hope that one of these days that the government will allocate enough money to federal places throughout nova scotia, canada or where ever they are located to help leaviate the issue of pay increases.

    Some programs will not give extra money unless they get a subsitity from the government but when you work for a non profit organization and the pay increases do not apply to those who get money once a year

  7. Employer 2010/05/25 at 9:14 pm #

    As an employer in the Inn business I too have paid my employees above the minimum wage. But because the government has seen fit to raise, not once in Nova Scotia, but twice in one year the minimum wage, I will be forced to pay the bare minimum.

    Employees with more then one year service will still be getting above the minimum, but a new employee will only get the minimum. Each time the government decides to give a raise to the bottom line, everyone gets that raise.

    In this business we are at the mercy of the tourist. If the tourist does not come… we do not make as much, and our so called bottom line is looking out from below the hole. This government has seen fit to be the third highest province for WCB premiums, the highest in corporate tax, and soon to be the highest in HST. The govenment has done nothing good for the small business of this province.

    We as a small business can not expand. We can raise our prices, but when the neighbour down the street is offering for less, how long will it take that tourist to pass us by?

    Our property taxes have gone up a minimum of 10% every year for the last 3 years. Utilities, supplies,… oh heck… everything is going up. Oh… and let’s not forget the minimum wage… that has been going up anywhere from 7% to 12%. Yes you read it right… in this province the wages will jump 12% this year alone.

    On top of all this… our longest employee, who makes much more then minimum wage, has informed us that she wants more money to do her same amount of work. Even though she does less tasks then she did 3 years ago. This my friends is a job that needs two days of training for one task, one day training for any other tasks, and I’m being kind. You don’t even have to go to school for any task.

    I thank you Hr/Pros for the time for my ranting. I thank the Government of Nova Scotia for making me think of moving to another province. And… I thank god all employees are not like what I described above, and are happy to just have a job.

  8. Me 2010/09/27 at 3:05 pm #

    All you Employers want good workers but you never want to pay anything.Why do you think all your good workers QUIT on you?
    Exactially!!!!!!!!!!!!!
    UNDER-PAID!!!