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 Minimum
Wage Will Increase on February 1
Special Report By
Robert Kirwan
Publisher
Valley East Today |
What will be seen as welcome news for the
thousands of people who are working for the minimum wage may be seen as
bad news for many businesses. On February 1, 2006, the Ontario
government is raising the minimum wage from its current level of $7.45 per
hour to $7.75 per hour. One year from now, on February 1, 2007, the
minimum wage will increase again to $8.00 per hour.
Increases will also apply to students under 18 years of age
and employed for not more than 28 hours a week. Their wage rate will go
from $6.95 to $7.25 and then a year from now to $7.50 per hour.
People who work in bars and restaurants serving liquor will
see their rate go from its current level of $6.50 to $6.75 on February 1
and then to $6.95 per hour a year from now.
The 6.9% increase in the minimum wage rate over the next two
years is seen as a way of helping low-paid workers benefit from
Ontario’s economic growth while keeping Ontario businesses competitive.
The minimum wage increase is expected to have some impact on
local businesses, but in reality, many retailers already pay their
employees a slightly higher rate. Nevertheless, recent statistics indicate
that about 60% of all workers in the City of Greater Sudbury earn less
than $10.00 per hour. |
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| ABOLISHMENT OF MANDATORY RETIREMENT AND
MINIMUM WAGE INCREASES ARE RELATED |
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While on the surface the raising of the
minimum wage and the abolishment of mandatory retirement may appear to be
unrelated, the two may have a direct impact on each other.
The Ontario legislative assembly voted 60-5 on December 8,
2005 in favour of the legislation which will take effect on December 12,
2006. This will give employers time to adapt their policies to comply with
the law and develop a plan for dealing with employees who wish to continue
to work after they turn 65. Employees will now be free to decide when they
want to retire, taking into consideration all of their own personal
circumstances.
While is it understood that there may be some occupations
which will be able to refuse to employ people beyond the age of 65 for
safety or other reasons, the Ontario Human Rights code will protect most
of the people aged 65 and over from age discrimination for most employment
purposes.
By raising the minimum wage to $8.00 effective February 1,
2007, this means that many people who qualify for a pension from their
current or former employers, or who will qualify for benefits under the
Canada Pension Plan, will now be in a better position to take on part-time
or full-time positions in retail or hospitality industries. They will be
more willing to accept the lower rate since the money will be used to
supplement their existing pension. Even a 20 hour a week job will produce
income in the range of over $640 a month. A full time position could yield
upwards of $1200 to $1300 per month before deductions. This may give an
older person enough of an increase in monthly income to cope with the
financial challenges faced after retirement. It may also give a person a
chance to continue to make a valuable contribution to society well into
his or her 70’s or 80’s. Some businesses can benefit greatly from what
older people have to offer, especially since the Baby Boomers are now
beginning to turn 60 years of age.
Therefore, when you combine the news from the increase in
minimum wage with the abolishing of mandatory retirement, it actually may
be welcome news for small business owners in the area who are having a
hard time finding young people to fill part-time positions for minimum
wages. There will soon be a lot of people over the age of 65 who will be
glad to fill those positions in order to help top-up their pensions. |
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