This paper is regarded as a variety of documents served by the Secretariat to your Professional Panel on contemporary Federal Labour Standards

This paper is regarded as a variety of documents served by the Secretariat to your Professional Panel on contemporary Federal Labour Standards

Disclaimer:

As history information to stimulate the Panel’s conversations. The documents usually do not reflect the views necessarily for the federal Government of Canada.

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The federal minimum wage has been pegged in the Canada Labour Code to the minimum wage rate in the province or territory in which the employee is usually employed for more than 20 years. Should this method be maintained or should a freestanding minimum that is federal be reinstated? In case a freestanding price had been become used, how should it is set, at just just what degree and who should really be eligible for it?

Background

The minimum wage may be the cheapest wage price that a boss can lawfully spend its workers and it is a core labour standard.

The underlying policy intent for developing minimal wages differs. Governments have historically place them in place having a view to protecting non-unionized employees, decreasing the quantity of low-paying jobs, relieving poverty, producing incentives to exert effort, addressing inequality and stimulating development through increased demand.

Minimal wages are set and modified in various means: in legislation or laws; by the government-of-the-day or a separate board; and according to inflation, normal wage prices or any other financial factors.

The very first minimum wage prices had been created in Canada during the early 20 century and used mainly to ladies and kids. Manitoba and British Columbia introduced wage that is minimum in 1918 and Ontario, Quebec, Nova Scotia and Saskatchewan accompanied suit in 1920. Prince Edward Island ended up being the final province to pass minimal wage legislation addressing men and women, which it did in 1960.

The federal minimum wage could be the minimum wage relevant to employees included in component III (Labour requirements) regarding the Canada Labour Code (the Code). This consists of workers in federally regulated companies, federal Crown corporations and specific government that is indigenous on very First Nations reserves.

Pre-1996 approach

From 1965, whenever role III associated with the Code arrived into force, until 1970, the federal minimum wage had been specified when you look at the Code and, at the time of 1971, the Governor in Council had the authority to regulate the price through legislation.

The minimum that is federal was set at $1.25 and rose to $4.00 each hour by 1986, of which point it remained unchanged for the following ten years approximately. The federal rate had fallen significantly behind provincial and territorial minimum wage rates, which averaged about $5.95 per hour by the mid-1990s.

Present approach

The Code ended up being amended in 1996 to handle this case. In specific, modifications were made so the federal minimum wage would adjust immediately with alterations in provincial and territorial prices, therefore making sure the federal price would manage its relevance with time in various financial and social conditions around the world.

The current approach, present in section 178 of role III of this Code, has two important components:

  • First, the federal minimum wage is placed given that “minimum hourly rate fixed, every so often, by or under an Act regarding the legislature associated with the province where in actuality the worker is generally used and that’s generally speaking relevant irrespective of career, status or work experience” Footnote 1
  • 2nd, the Governor in Council gets the authority, by purchase, to: a) replace the minimal rate that is hourly was fixed pertaining to work in a province with another price; or b) fix the absolute minimum hourly price with regards to employment in a province if no such minimal https://essay-writing.org/research-paper-writing/ hourly rate happens to be fixed. Neither of those two authorities has ever been utilized

In addition, area 178 offers situations where employees are paid on a foundation apart from a rate that is hourly. In specific, such workers must get at the very least the exact carbon copy of the minimum wage. The Minister is authorized, by purchase, to repair “a standard foundation of strive to which a minimum wage on a basis other than time can be applied”, as well as “a minimal price of wage that when you look at the viewpoint regarding the Minister could be the exact carbon copy of the minimum wage”.

Current developments

There were telephone telephone calls in the past few years for the authorities to re-establish a uniform, freestanding federal minimum wage. Some have actually argued that this will be a matter of decency (for instance Arthurs, 2006) among others that it’s a matter of showing federal leadership (for instance New Democratic Party movement tabled when you look at the House of Commons in 2014).

Provincial and minimum that is territorial have actually continued to steadily increase. At the time of 1, 2019, they averaged $12.23 per hour, with a low of $11.00 per hour in Saskatchewan and a high of $14.00 per hour in Ontario january. Many provinces and regions now additionally review and/or set their prices for a basis that is regular many rates are indexed to inflation.

In addition, several provinces have recently implemented significant increases within their prices, or have actually established that they will achieve this. Ontario raised its minimal wage from $11.60 to $14.00 each hour on January 1, 2018. The provincial rate increased from $11.35 to $12.65 on June 1, 2018 and will increase to $14.60 on June 1, 2019 and $15.20 on June 1, 2021 in Alberta, the minimum wage rate increased from $11.60 to $15.00 per hour on October 1, 2018 and, in British Columbia.

More generally, high-profile promotions to increase wage that is minimum led by labour and anti-poverty companies have gained momentum across united states in modern times (for example Fight for $15 and Fairness).

In addition, brand new research methodologies and findings have assisted to both spur renewed curiosity about the results of minimal wages and notify the development of minimal wage-related reforms. The latter consist of city-level minimal wages in Seattle, Chicago, nyc and Washington, D.C., plus the introduction of the nationwide minimum wage in Germany in 2015 and a nationwide living wage in the United Kingdom in 2016.

Minimal wage into the federally regulated private sector

This part offers an analysis of minimal wage and low-wage employees within the federally regulated private sector (FRPS), in addition to violations for the Code’s minimum wage needs.

Analysis of low-wage workers

In line with the 2015Federal Jurisdiction Workplace Survey (FJWS) in addition to Labour Force Survey (LFS), the Labour Program estimates that there have been 42,000 workers into the FRPS earning the minimum wage within the province by which they worked in 2017, amounting to 5% of most FRPS employees. This even compares to 7% of workers earning the minimum wage in Canada in general (excluding the regions, which is why information aren’t available) in 2017. Footnote 2

It really is beneficial to give consideration to those employees making just over the present minimum wage whom could be straight suffering from the use of the uniform federal minimal wage. To achieve this, a wage limit of $15.00 each hour in 2017 ended up being chosen. The end result is approximately 67,000 workers making lower than $15.00 each hour in 2017, comparable to 7% of FRPS workers. By comparison, 21% of most workers in Canada could be making significantly less than $15 each hour. A far smaller share of FRPS workers would consequently be making simply over the minimum wage in comparison to workers in Canada all together.

Here are some can be an analysis associated with distribution of those two sets of employees—current minimum wage workers and the ones that could be making not as much as $15 per hour—by characteristics that are various when it comes to FRSP as well as for Canada in general. Into the conversation below, the definition of “low-wage workers” covers both groups. Footnote 3

The distribution that is provincial of workers between your FRPS and Canada is approximately comparable ( dining Table 1). About two-fifths of low-wage employees come in Ontario. About one-fifth to one-quarter come in Quebec.

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