Employment Law

Author: J. Geoffrey Howard

First Major Minimum Wage Increase Takes Effect June 1, 2018

Employers need to be ready for significant annual minimum wage hikes over the next four years which have already been passed by regulation. These extraordinary increases, which are well above forecast inflation, come into force June 1 over the next four years, rather than in September as with past increases.

As promised by the NDP during the election, the B.C. minimum wage will be increased to over $15 by 2021, starting with a jump from $11.35 to $12.65 on June 1, 2018. It will then increase three more times each June thereafter to reach $15.20 on June 1, 2021.  Slightly lower liquor serving waiter minimum wages will also increase at the same pace.

As more than 20 per cent of all workers in B.C. earn less than $15 per hour, these changes will have a significant effect on wage costs for many employers.  The decision to implement the increases June 1 means that most students, many of whom are paid at or close to the minimum wage, will see their earnings increase.  At the same time, the number of lower wage job openings will decrease. Tourism, hospitality and food service and other service employers who employ large numbers of students will be the most impacted.

Employers will also have to review wages for those earning just above the minimum wage to ensure seniority or productivity premiums for more experienced workers are maintained, putting further pressure on wage costs.  These changes, along with the higher cost of the Employer Health Tax for many employers, will provide further incentives to consider contracting out, automation and artificial intelligence to reduce staffing levels.

This post is for informational purposes only and does not constitute legal advice or an opinion on any issue.  If you are interested in receiving additional details on the topic above or advice about specific circumstances, please contact J. Geoffrey Howard at MEP Business Counsel at 604-891-1184 or ghoward@meplaw.ca. For more information on J. Geoffrey Howard, visit his profile meplaw.ca/team/j-geoffrey-howard.