How to deal with the rise in the minimum wage for employees who earn (a little) more

How to deal with the rise in the minimum wage for employees who earn (a little) more

 

By Liette Flanagan, President and CEO of PBPA, in collaboration with PSC Consultants

On May 1st, 2018, in Quebec, the minimum wage will rise from $ 11.25 to $ 12 an hour for non-skilled workers and from $ 9.45 to $ 9.80 an hour for tip workers. What are these increases due to? And, most importantly, in a context of labor shortages, should you pay more for your employees who already earn more than $ 12? Update on a crucial issue for SMEs.

When employment is at its peak, the minimum wage increases

Did you know that unemployment in Canada has had its lowest rates for several decades? In March, it stood at 5.8% and would be much lower if we did not take into account provinces where things are not going well, such as in the Maritimes, where unemployment rates can exceed 10% and even 14%. And in Quebec?

Still in March, this rate was 5.6% at home, and it was already below 5%, or 4.9%, in December 2017. For the International Labor Organization, such statistics reflect a situation of full employment.

Consequence: we tear up the employees!

Yes, full employment in a well-functioning economy that is aging is creating a labor shortage. In this regard, Emploi Québec is constantly raising the number of jobs to be filled, which would reach the astronomical figure of 1.4 million in 2024!

In any case, Emploi Québec does not need to seize the deep concern of our SME managers. As president of PBPA, I meet a lot of them, and they tell me how much they are struggling not only to find new employees, but also to retain their current staff.

Thus, non-unionized firms would be particularly active in bridging their labor needs through offers to employees of competing organizations. Is your company part of these hunters ... or their victims?

I was also told that cashiers earning just over the minimum wage had changed employers to earn an extra $ 2 an hour. It's an extra $ 80 per 40-hour week, so very interesting for these modest-income cashiers. And a painter in a workshop, at a slightly higher basic salary, can get $ 5 an hour or more to work elsewhere.

Adjust the wages of employees earning more than the minimum wage

Current salary May 1st increase % increase
Less than $ 15 an hour All: + 75 ¢ 6,7 %
From $ 15 to $ 19.99 per hour All: + 37 ¢ 3,3 %
$ 20 and over According to the performance appraisal, if no increase has been granted in 2017 From 3 to 4%, including the increase in the cost of living (1.9% in 2017)

 

How to keep your people in this context and while the minimum wage will increase? There may be some grumbling, especially from staff who worked hard for several years before arriving at $ 13, $ 14 an hour or more. These employees could complain about the gap that will be narrowing between their earnings and the new minimum wage. How should you react?

PBPA has studied the question and proposes the following measures. First, the worst thing would be to do nothing, because you will lose some of your workers and invest to replace them. According to Stéphane Simard, CRHA, it costs $ 15,000 to $ 60,000 to replace an employee, when all the expenses involved are taken into account.

Then, if your company is doing well and can offer all your employees an increase equal to that of the minimum wage, $ 0.75, do it. No complaint will then be possible. On the contrary, we will compliment you for your generosity! Perhaps, to offset such an increase in the payroll, you will have to cut elsewhere or increase certain sales prices.

Finally, another solution is to give a larger increase to workers whose hourly rate is closer to the new minimum wage of $ 12 per hour, as shown in the table above.

Need more tips? Do not hesitate to contact the president of your PBPA, Liette Flanagan.  

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