$14-An-Hour Minimum Wage Kills Small Businesses

As of January 1, Ontario raised its minimum wage from $11.60 to $14.00—a 21 percent increase. This change was enacted thanks to Ontario’s Fair Workplaces, Better Jobs Act, 2017 also known as Bill 148. The Bill was created with the intent of supporting workers and their families to create fairness and opportunity in Ontario’s changing economy. 

This new legislation makes several important changes to the Employment Standards Act, 2000, and the Labour Relations Act, 1995, found hereOf course, the major policy change is the minimum wage increase, which is predicted to result in less employee turnover, increasing business productivity. 

However, small business owners do not see the $2.40 jump in the same light. They are wondering how they will maintain the same profits with the increased payroll costs.

It has barely been over a week since the increased wage has taken place and small businesses are already taking action to offset the costs. Some have cut their employees’ hours, some have raised their prices, and others have cut staff members.

This isn’t to say small businesses are against giving people a higher living wage, but it’s more to the point that they are the ones seeing the greatest effects of the wage hike.

“We believe the minimum wage should go up and people should make a living wage, however, I think (the hike) puts the onus on small businesses,” said Chris Stevens, owner of Kaboom Chicken restaurant in Toronto.

The Financial Accountability Office of Ontario, an independent watchdog agent that reports to the provincial legislation, estimates the minimum wage increase will result in a loss of 50,000 jobs to keep up with the costs of staffing.

“Some businesses will attempt to reduce expenses by substituting minimum wage employees for higher paid, more productive workers or by increasing automation. This would lead to some job losses for minimum-wage workers,” the agency stated in a report released in September 2017.

The Bill also includes several other practices and policies that will take place throughout this year. Some of the provisions of the new legislation include increased vacation pay, new paid personal emergency leave, new on-call pay, and several other changes that can be found in the Ontario Newsroom

The Bill also will call for another minimum wage raise in 2019, bringing it to $15-an-hour.

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