New Minimum Wage in Ontario: What You Need to Know
Effective October 1, 2024, Ontario's general minimum wage will increase to $17.20 per hour, up from the previous rate of $16.55 - a move by the provincial government to help wages keep pace with the rising cost of living.
At Small-Books, we work closely with small business owners across Canada to ensure they stay on top of compliance issues, including minimum wage regulations. Here’s what you need to know about the latest changes in Ontario’s minimum wage, and how it may impact your business.
A Quick Overview of Minimum Wage in Ontario
The minimum wage is the lowest hourly rate that employers are legally required to pay their employees. Starting October 1, 2024, most employees in Ontario will be entitled to at least $17.20 per hour. That’s up $0.65 from the previous minimum wage of $16.55.
But, there are a few exceptions! Let’s break it down.
Who Does Minimum Wage Apply To?
Most employees in Ontario are covered under the Employment Standards Act (ESA), but not everyone. Some examples of people who aren’t covered include:
Employees and employers regulated by federal law (like banks or airlines).
Students working through a school program.
People doing community participation work under the Ontario Works Act.
Police officers, elected officials, and some other specialized roles.
If you’re unsure whether your employees are covered, it’s always a good idea to ask your accountant or payroll service provider.
Special Minimum Wage Rates
Not everyone earns the same minimum wage under the ESA. Certain groups of workers have different rates, including:
Students (under 18, working 28 hours a week or less): $16.20 per hour.
Hunting, fishing, and wilderness guides: $86.00 per day (for less than 5 hours) or $172.05 per day (for 5 hours or more).
Homeworkers (people doing paid work from home): $18.90 per hour.
Early Childhood Educators in licensed child-care centres: $23.86 per hour, going up to $25.86 per hour by 2026.
Minimum Wage Rates for 2024
Minimum wage rates in Ontario will increase on October 1, 2024. This increase is tied to the Ontario Consumer Price Index for 2024.
The general and specialized minimum wage rates that will take effect on October 1, 2024 are detailed in the chart below.
What Happens if Someone Isn’t Paid Minimum Wage?
If an employee covered by the ESA is paid less than the minimum wage, they have the right to file a claim with the Ministry of Labor. Employees have a two-year window to submit a claim, so if you, as a business owner, fail to meet the employment standards, including minimum wage requirements, you could face wage disputes and other penalties/losses to your business.
Staying Compliant as a Small Business Owner
As a small business owner, it's your responsibility to stay updated on wage regulations to avoid penalties. Failing to comply with the minimum wage rules can result in hefty fines, reputational damage, and employee dissatisfaction. It’s a good practice to review your payroll processes before each pay period to ensure accuracy and compliance with the latest minimum wage rates.
At Small-Books, we’re committed to helping small businesses like yours navigate changes in employment regulations. From payroll management to compliance, we provide tailored support to ensure your business remains compliant with provincial wage laws.
Putting it all together
As of October 1, 2024, Ontario’s general minimum wage will increase to $17.20 per hour—a change made to help keep up with inflation and the rising cost of living. For small business owners, it’s essential to stay on top of these changes to ensure your payroll stays compliant with the Employment Standards Act. Missing these updates could lead to penalties or disrupt your day-to-day operations, and no one wants that!
But keeping up with ever-changing rules and regulations can be tricky—that’s where Small-Books comes in:
What is Small-Books?
We’re your go-to online bookkeeping service, giving you a dedicated bookkeeper backed by a team of small business experts who understand the unique challenges you face. Our mission? To take the stress out of managing your business’s finances. From keeping your books in check to ensuring your payroll is always up to date, we make sure your business stays 100% compliant with all the latest rules and regulations—so you can focus on what matters most: growing your business.
With Small-Books, you can rest easy knowing your finances (from books to tax) are always in good hands!
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Small-Books assumes no liability for actions taken in reliance upon the information contained herein.
