There is always a lot of controversy when the government announces their intentions to increase minimum wage, especially among small business owners. In Nova Scotia, the minimum hourly wage is currently $8.60. Under current plans, the minimum hourly wage will increase to $9.20 on 1 April 2010 and to $9.65 on 1 October 2010.
For employers an increase in the minimum hourly wage has a ripple affect across their bottom line.
- The employer must remit $4.95 for every $100.00 of payroll as its share of Canada Pension Plan (CPP) contributions to a maximum of $2118.60 for a maximum insurable level of $46,300.
- Worker’s Compensation (WCB) premiums are also based on payroll and range from a low of $0.46 per $100.00 to more than $10.00 per $100.00 of payroll depending on the industry to a maximum insurable level of $49,400. (For restaurants, the industry rate is $1.73.)
- The employer must also pay Employment Insurance that is equivalent to $2.42 for every $100.00 of payroll to a maximum of $1024.51 for a maximum insurable level of $42,300.
- In addition, the employer must set aside 4% of gross wages for vacation pay.
What does this all mean? Well, raising the minimum wage by $1.05 per hour will cost for each employee working 40 hours per week in a restaurant:
$2184 in extra wages
$108.10 in additional CPP premiums
$52.85 in additional EI premiums
$87.36 in additional vacation pay
$37.78 in WCB premiums
Benefit payments that are tied to wages will also increase. For example, life insurance coverage is a function of wages earned. Increased wages means higher life insurance coverage and, concomitantly, higher life insurance premiums.
Then there is the question of internal equity. A raise in the entry level wage will put upward pressure on existing wages. The fact is that tenured and high performing employees demand to be paid more than the new or entry level employee.
The following table provides a comparison with other provinces and territories.
||Min Hourly Wage
||$9.00 on 1 Oct 2010
||$10.25 on 31 March 2010
||$8.25 on 1 Sep 2010
||$8.40 on 1 0ct 2009
||$9.50 on 1 Jan 2010 and $10.00 on 1 July 2010
||$9.20 on 1 April 2010 and $9.65 on 1 Oct 2010
||Annual increase on 1 April tied to CPI in Whitehorse
It should be noted that there are variances in minimum wage strategies between Provinces. For example, in British Columbia the minimum hourly wage is $6.00 for the first 500 hours for an employee who has 500 or fewer hours of cumulative paid employment experience with one or more employers. In Quebec, the minimum hourly wage for employees who receive tips is $8.00 while in Ontario, the minimum hourly wage for liquor servers is $8.25. Some provinces have a minimum piece rate for farm workers, or a minimum daily rate for hunting and fishing guides. Employers must be aware of the minimum wage regulations in their jurisdiction.
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Posted in advice, human resources, retention, Small Business, Uncategorized, Wage
Tagged CPP, EI, employment, human resources, Human Resources Management, Minimum wage, wcb
Helping Nova Scotia businesses thrive has been our mission since HR pros, a technical human resources consulting firm, launched in October 2008. Focused on the task of helping small and medium sized business achieve success and growth through sound and effective HR management practices, HR pros offers a diverse range of human resources management services.
Tanya, a Certified Human Resources Professional (CHRP), brings more than a decade of senior human resources management experience in a number of industries (including mining, manufacturing, sales, consulting, IT, contact centre) to the table. Sylvain spent more than 25 years of his career as an officer in the Canadian Navy, achieving the rank of commander before moving on to obtain a Master’s degree in public administration and working in the civilian sector. Sylvain’s systematic approach dovetails effectively with Tanya’s experience and intuitive style to create a powerful synergy.
HR pros knows from experience that a comprehensive HR framework is a competitive advantage and positively impacts a business’ bottom line. HR pros also knows that 85% of Nova Scotia’s businesses are small businesses and small businesses cannot necessarily afford a full-time, fully qualified HR professional. Hence, HR pros is here to help!
Unlike many human resources firms in the Halifax area, which specialize in personnel staffing or benefits, HR pros focuses instead on helping businesses establish a strategic and meaningful framework for managing human resources. Without a clear human resources management framework employee motivation, morale and productivity suffer thereby negatively impacting the bottom line. Perhaps worse yet, businesses can find themselves mired in Human Rights, OHS and Labour complaints and thereby irrevocably damaging their reputations.
In the past nine months, HR pros has provided services to clients in the information technology, manufacturing, retail, construction, financial, food processing, headhunting, entertainment, and security industries. We have assisted our clients and developed:
Recruitment & Selection Programming thereby improving retention;
Training and Orientation Programs thereby improving employee morale, productivity and retention;
Employee Policies thereby meeting legislative requirements and clarifying the employment relationship;
Wage Systems that are well-researched, competitive, and affordable;
Organizational Design and Job Descriptions thereby improving productivity, streamlining operations and reducing redundancy;
Performance Management Systems thereby setting clear expectations of performance and aligning all employees to the goals of the organization;
Occupational Health & Safety Programming (OHS) thereby improving employee morale and meeting legislative requirements;
Employee Reward, Engagement and Retention Strategies;
WCB analysis and return to work strategy thereby improving WCB claims and rates;
Corporate Diversity Programming thereby creating an environment of inclusion;
Assist clients with complaints made to government agencies including the Human Rights Commission;
For more information on how HR pros can help you grow your business, comply with legislation and develop an HR framework to meet your business’ mandate call today!
Posted in advice, human resources, orientation, retention, Safety, Small Business, Training
Tagged Diversity, human resources, Human Resources Management, Human Rights Commission, job description, Occupational Health and Safety, orientation, performance management, Record of Employment, recruiting, Safety, Training, wcb
Two weeks ago, two unrelated organizations released separate studies that provided interesting statistics on the status of workplace training. One study was released by the Canadian Council on Learning and dealt with learning in general within the Canadian society. The other study was conducted by the Canadian Federation of Independent Business and reported specifically on the incidence of training in the workplace.
Since 2006, the Canadian Council on Learning has been monitoring and reporting on the Composite Learning Index. This index uses an array of statistics to reflect the many ways that Canadians learn, formally and informally, in school, at home, at work and in the community. The most recent study showed that Canada’s Learning Index has declined for the first time since it was created. The national average dropped two points from 77 to 75. Nova Scotia scored 71, PEI 68, New Brunswick 63, and Newfoundland and Labrador 61.
The Canadian Council on Learning study also indicates that the national decline in learning would have been greater had it not been for an increase in adult learning. The Council reports that: “Canada has seen an increase in the proportion of adults participating in job-related training over the last three years. At the same time there has been a growth in the proportion of businesses offering workplace training between data used in 2008 and 2009.”
At first glance, the increase in job-related training seems to be a positive indicator. Employee development and training can increase productivity, employee morale and profitability. Having said this, the Council reports that the most common type of training provided by employers is related to employee orientation and Health and Safety training. More advanced training such as supervisory, managerial, literacy and numeracy is provided by a much smaller number of employees. In other words, businesses may be providing more training, but a lot of the training is directed at new employees during orientation or to meet Occupational Health and Safety regulatory requirements.
The increase in the incidence of workplace training is confirmed by a Canadian Federation of Independent Business report, available at http://www.cfib.ca/research/reports/rr3083.pdf . The CFIB reports that 94% of small business owners offer training, an increase of 6% since 2002. However, if we look at the numbers a little more closely, CFIB reports that not all employees are receiving comparable training. New inexperienced employees receive on average $5411 of training dollars while new experienced employees receive only $3469. All other staff average $2254. Since new employees are more likely to receive orientation training and health and safety training, the CFIB report supports the findings of the Canadian Council on Learning.
What does this mean for the employer? In short, a new employee has a higher impact on the bottom line in terms of training cost. Hence, employers who can retain tenured and trained employees stand to benefit more from their training investments. On the other hand, employers who have a high attrition rate should examine their policies, procedures and culture to determine the root cause of attrition because turnover means wasted training dollars.
HR pros can assist businesses identify root causes of their attrition and develop solutions to increase retention. HR pros can also develop training, development and orientation programs for new and existing employees.
Posted in advice, human resources, orientation, retention, Safety, Training
Tagged human resources, Human Resources Management, orientation, retention, Safety, Training, whmis