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Ontario’s Minimum Wage Increasing October 1st, 2024

As of October 1st, 2024, Ontario’s provincial minimum wage is set to increase from $16.55 per hour to $17.20 per hour. According to a news release from Ontario’s Ministry of Labour, Immigration, Training and Skills Development, 935,600 workers were at or below this rate in 2023.

In Ontario, the Employment Standards Act, 2000 (“ESA”) outlines the minimum standards for employees. In the ESA, the minimum wage is the least amount that an employer can pay their employee.

The minimum wage varies by province, with a different rate for workers of federally regulated industries. The federal minimum wage is set to increase to $17.30 per hour on April 1st, 2024.

Why is Ontario’s Minimum Wage Increasing?

Ontario’s minimum wage is increasing to keep pace with higher inflation. According to the ESA, a scheduled annual increase in the minimum wage began in 2022. This increase is set to continue happening on October 1st of each year after 2022. This new minimum wage rate is to be published by the Government of Ontario each year.

How is the Minimum Wage Calculated in Ontario?

The minimum wage in Ontario is determined based on a calculation that uses the Consumer Price Index for Ontario for all items. This calculation factors in the previous wage rate and the change in the Consumer Price Index between the previous year and the year before that. The equation used is as follows:

As $17.18 is not a multiple of five, the value gets rounded up to $17.20 per hour.

What if October 1st Falls in the Middle of a Pay Period?

According to section 23.0.1 of the ESA, if the minimum wage changes in the middle of a pay period, then the employee’s wage is calculated as if two separate pay periods take place.

This way, the employee receives the pay that they are entitled to for the period up to the change in minimum wage, as well as the period that begins on the day that the minimum wage rate changes.

Do All Workers Make Minimum Wage in Ontario?

There are some exceptions to the mandatory minimum wage rate in the ESA.

These exceptions are:

  • Students, who will make at least $16.20 per hour
  • Hunting, fishing, and wilderness guides, who will make at least $86.00 if they work less than five consecutive hours in a day or $172.05 if they work five or more hours in a day
  • Homeworkers, who will make at least $18.90 per hour

What About Commissioned Employees?

Additionally, workers who earn a commission must get paid at least the new minimum wage, when it arrives on October 1st, 2024. This factors in the wage that the employee gets paid by their employer and the commission pay that the employee makes. When conducting this calculation, the employee’s pay period is used to determine what their hourly wage is by dividing their total pay by the number of hours that they worked.