Minimum Wage Database Introduction
The minimum wage is a basic labour standard that sets the lowest wage rate that an employer can pay to employees who are covered by the legislation. Today, one of its main purposes is to protect non-unionized workers in unskilled jobs, although it can also influence, directly or indirectly, the level of compensation of other employees as well.
A minimum wage constitutes a floor above which employees or their unions may negotiate with management for higher remuneration. However, it is rarely static: adjustments are required from time to time to maintain its relevance in changing economic and social conditions. Following is a brief history of the evolution of minimum wage legislation and an analysis of specific provisions in the various Canadian jurisdictions.
On the international scene, minimum wage legislation first appeared in New Zealand in 1894 and in the Australian state of Victoria in 1896 after significant "anti-sweating" campaigns. It was subsequently introduced in Great Britain in 1909, and in a number of continental European countries a few years thereafter. In North America, the state of Massachusetts was the first jurisdiction to institute a minimum wage, in 1912. However, the Massachusetts legislation, which only applied to women and minors working in certain industries, contained numerous exceptions and lacked an effective enforcement mechanism, relying solely on public opinion to pressure employers into compliance. Several other American states followed suit, although the history of the minimum wage legislation in the United States was marked, at least in its early stages, by a number of judicial and political setbacks for its proponents.Footnote 1
In Canada, the earliest attempts at regulating the field of minimum wages resulted in the payment of "fair wages" to persons engaged on public works and government contracts. Soon after the turn of the last century, Canadian legislators began enacting "policies" to address issues such as the very low wages, long hours of work and unhealthy working conditions prevailing at the time.
The year 1900 saw the beginning of the Fair Wages Policy. In March of that year a resolution was passed by the House of Commons which was directed against abuses arising from the sub-letting of Government Contracts (...). It declared it to be the policy of the Government that wages generally accepted as current in each trade for competent workmen in the district where the work is carried out should be paid on all public works undertaken by the Government itself or aided by Government funds. (...) The Federal Government's actions in 1900 helped to gain wide acceptance of the fair wage principle.Footnote 2
The first provinces to enact minimum wage legislation were British Columbia and Manitoba, in 1918. By 1920, four other provinces-Nova Scotia, Ontario, Quebec and Saskatchewan-had followed their example. However, these laws applied only to female workers in some types of employment. Indeed, North American labour unions at the time generally considered that they were in a better position to ensure adequate wages for men through collective bargaining, but they supported State intervention to protect working women, who were mostly unorganized and, hence, more vulnerable to exploitation.
The general pattern of these Acts was basically the same. A board made up of employer and employee representatives, and sometimes of the public, with an impartial chair, was authorized to hold investigations and to issue orders as to minimum wages for female employees. In Ontario and Quebec, the law at first referred to wages only. In the other provinces, the Board had the power to regulate hours and conditions of labour as well.
British Columbia adopted the Men's Minimum Wage Act in 1925, making it the first province to legislate a minimum wage for male workers. Almost a decade passed before other jurisdictions extended the minimum wage to men: Manitoba and Saskatchewan (1934), Alberta (1936), Ontario and Quebec (1937). Prince Edward Island was the last to do so, in 1960 (it had established a minimum wage for women only the year before). It should be noted that the minimum wage rates for men were initially set higher than for women, since it was assumed at the time that men should be a family's main breadwinner. Gender-based minimum wage differences slowly gave way to the principle of equal pay during the 1950s, and disappeared entirely by 1974.
Until the early 1970s many provinces also had zones or geographical differentials whereby workers in urban centres were paid a higher wage than those in rural areas. At the beginning of 1960, for example, six provinces had such zones. The reason for having different minimum wage rates was the generally higher cost-of-living in the cities compared to rural areas.
Throughout the history of the minimum wage there have also been various other differentials. Youth differentials were once very common, though many jurisdictions have repealed them since the adoption of the Charter of Rights and Freedoms in 1982. Occupational differentials have been and still are rather common. For example, domestic and farm workers have generally been excluded from minimum wage provisions or, if not, have been entitled only to a lower minimum rate. Occupations like restaurant workers, hairdressers, salespersons, and construction workers have also historically been treated separately. In addition, the legislation of almost all jurisdictions allowed the employment of workers with disabilities at rates below the legislated minimum, usually under a system of individual permits. However, as has been the case for youth differentials, many jurisdictions have repealed such provisions since the early 1980s.Footnote 3
THE PRESENT SITUATION
Minimum Wage Legislation Footnote 4
Every province and territory in Canada now provides for a minimum wage in its employment standards legislation. As for the federal jurisdiction, it has entrenched the applicable provincially legislated general adult minimum wage rate for workers covered by Part III of the Canada Labour Code, although the Governor in Council may still fix another rate by order.
Employment standards legislation makes it an offence (although the extent of the applicable penalty may vary according to each law) for employers to pay covered employees less than the minimum wage, whether remuneration is calculated on an hourly, daily, weekly, monthly, or piece-work basis. It is also normally an offence for employees, in collusion with their employer, to work for less than the minimum wage rate or to reduce their wages below the legislated standard by directly or indirectly returning part of their pay. Parties are prohibited from contracting out of the minimum wage.
Legislation also provides statutory wage recovery mechanisms and, in addition, often specifically allows an employee to also sue in order to obtain the difference between wages actually received and wages that should have been earned if paid at the minimum rate.
As will be seen later, relevant sections of employment standards legislation indicate how and by whom the minimum wage is set. Minimum wage laws and regulations also specify which categories of employees they cover and, in some instances, whether differentials apply. They usually also contain related provisions regarding, for example, tips and gratuities, call-in (or "reporting") pay, partial hours and allowable deductions for lodging, meals and uniforms.
Finally, legislated general minimum wage rates are often supplemented by special orders, regulations or decrees that apply to particular industries, occupations or classes of employees, and in some cases take into account special skills. For example, Quebec regulates the wages and working conditions of several occupations through its Act respecting collective agreement decrees. Similarly, regulations under the Labour Standards Code in Nova Scotia can set minimum wages and working conditions for workers in specific industries such as construction Footnote 5 and the Employment Standards Act, 2000 in Ontario can set minimum wages and working conditions for workers in specific industries such as textiles, garment, live performances and visual or audio-visual entertainment. Manitoba has a Construction Industry Wages Act with regulations that are updated regularly.
Minimum Wage Boards and the Review of Minimum Wage Rates
Though certain jurisdictions have since abolished them, minimum wage boards (or equivalent labour boards) have basically the same role today as in the past: they are authorized by law to recommend minimum wage rates, after the necessary inquiries, investigation and research (as is the case in Manitoba, New Brunswick and Newfoundland)Footnote 6 or to establish such rates, subject to the approval of the Lieutenant-Governor in Council (in Prince Edward Island, Saskatchewan and the Yukon). In other jurisdictions where no boards exist, the review of the minimum wage rates is incumbent upon the Lieutenant-Governor in Council (i.e. the Cabinet assisted by the governmental administration). The rates are reviewed and increased from time to time by minimum wage orders or regulations pursuant to the province's employment standards legislation, which are approved by order in council. In other words, the final decision always rests with the government.
The boards are composed of government-appointed members who represent the interests of employers and employees, with an impartial chairman, frequently an officer of the department of labour. Provisions may also require gender-balanced representation. For instance, Saskatchewan's Minimum Wage Board is comprised of five members, two of whom must be women.
Most acts do not provide specific guidelines regarding how the minimum wage is to be determined, but there are exceptions. The employment standards laws of New Brunswick and Prince Edward Island require minimum wage boards to "take into account the social and economic effects of minimum wage rates in the province" and to consider:
(a) any cost of living increase since any previous order or regulation, with respect to the cost to an employee of purchasing the necessities of life, including but not limited to housing, food, clothing, transportation and health care and supplies; and
(b) economic conditions within the province and the concept of a reasonable return on private investment.Footnote 7
In the case of Manitoba's Construction Industry Wages Act, construction wages boards must consider "the competitive position of the construction industry in Manitoba in relation to the construction industry in other provinces and jurisdictions", "the needs related to the entry into and the development and availability of a skilled and productive workforce", "providing for fairness in the tendering process for construction projects" and "providing for a fair and reasonable rate of wages". However, similar guidelines no longer exist in the province's Employment Standards Code.
Whether the manner in which the minimum wage should be determined is specified or not in the legislation does not seem to make a substantial difference in practice. Minimum wage boards normally fix or recommend a basic wage, after taking into account the cost-of-living, economic conditions and other relevant factors. Lieutenant-Governors in Council also take these factors into consideration before setting or approving a new rate. Usually, public hearings are held and extensive inquiries are made before minimum wage orders are put into effect.
Only four provinces have legislation requiring a regular review of the minimum wage. There must be an annual review in Nova Scotia and Prince Edward Island while Saskatchewan's Minimum Wage Board is required to review regulations pertaining to the minimum wage at least once every two years. In Newfoundland and Labrador, the Minister must review the minimum wage at least every two years from the date of coming into effect of the minimum wage regulations. In spite of the requirements to review the minimum wage, these governments are in no way bound to increase or otherwise modify minimum wage rates.
Coverage: Special Categories of Workers
Although general minimum wage rates in every Canadian jurisdiction apply to most workers, some categories of employees are specifically excluded from minimum wage provisions in the relevant Act or regulations. Some employees are also covered by a different minimum wage rate.
There has been a marked trend since the early 1980s toward the repeal of youth rates, presumably because these could be deemed contrary to the Charter of Rights and Freedoms which prohibits discrimination on the basis of age. Youth differentials nevertheless still exist in Ontario
Other jurisdictions do not provide minimum wage coverage for some young workers. In Newfoundland and the Yukon, the general minimum wage rate does not apply to employees under 16 and under 17 years of age respectively. However, young employees in the Yukon may be entitled to a minimum wage prescribed by regulation for a specific occupation.
Workers with Disabilities
At present, Alberta, Manitoba and Saskatchewan allow the payment of wages below the general minimum wage rate to workers with disabilities under a system of individual employer permits. Though these provisions are still on the books, they are little used. The federal jurisdiction, Newfoundland and Prince Edward Island have repealed such provisions over the years. Quebec's Regulation respecting labour standards excludes trainees undergoing a vocational integration program-under the Act to secure the handicapped in the exercise of their rights - from minimum wage provisions.
Domestic and Live-in Care Workers
Historically, domestic workers were excluded from the minimum wage rates and from most other employment standards. Today, however, only New Brunswick excludes them from the minimum wage. Indeed, although the Minimum Wage Regulation applies to most employers and employees in the province, the definition of "employer" in The Employment Standards Act does not include individuals who are responsible for the employment of persons in or about their private homes. This means that domestics and live-in care providers, among others, are not covered by the minimum wage.
In Prince Edward Island, Manitoba and Quebec, persons employed to provide care for children, or for infirm, ill or aged persons in a private home are excluded, but other domestics are covered (although only domestics working more than 24 hours per week benefit from minimum wage provisions in Manitoba, and special rates that apply to live-in domestics are set in Quebec). Somewhat similarly, the General Minimum Wage Order in Nova Scotia does not apply to employees providing domestic service for members of their immediate family or, in other cases, for a total period of 24 hours or less per week.
In Ontario as well as in Newfoundland and Labrador, the Northwest Territories and Nunavut, domestic workers receive the general minimum wage. This is also the case in British Columbia, although "live-in home support workers" are entitled to a minimum daily wage that is equivalent to ten times the minimum hourly rate. In Saskatchewan, live-in care-providers and live-in domestics, with the exception of sitters, are entitled to receive the general minimum wage for the first eight hours worked in one day. Alberta 8 , has established a fixed amount as a monthly minimum wage for domestic workers, while in the Yukon the minimum wage is set at 8 hours multiplied by the minimum hourly rate for each day worked.
Furthermore, residential care workers in Ontario must be paid their regular rate (not less than the minimum wage rate) times at least 12 hours (and up to 15 hours) for each day worked unless, by arrangement with the employer, they perform their duties during a lesser number of hours. In British Columbia, such workers are entitled to a rest period of at least eight hours a day which, if interrupted, must be remunerated at their regular rate times two hours, or times the number of hours of work caused by the interruption, whichever is greater.
Farm labour has also traditionally been excluded from minimum wage provisions. The legislation in several jurisdictions still does not cover most farm workers. This is the case in Alberta, Manitoba, Ontario, and Saskatchewan. There are nevertheless some exceptions: in Saskatchewan, farm workers employed by egg hatcheries, greenhouses and nurseries, or bush clearing operations are covered by the minimum wage, unless it is an undertaking in which only members of the employer's immediate family are employed; in Ontario, persons employed to harvest fruit, vegetables or tobacco for marketing or storage are entitled to a rate equal to the general minimum wage or to the youth rate, depending on their age.
A number of provinces have sought to protect both farm employees and the traditional family farm. For example, in Prince Edward Island, farm labourers are only covered by minimum wage provisions if they work for a commercial operation. In Quebec, agricultural labourers are also covered, while certain employees working as fruit pickers are subject to special minimum standards regarding their remuneration. Employees assigned to the picking of raspberries, strawberries or apples are entitled to be paid a minimum piece rate based on the quantity of fruit picked, while employees assigned to the picking of other fruit are entitled to the general minimum wage rate. The law further states that an employee is entitled to at least the general minimum wage rate if "for reasons beyond the employees control and linked to the state of the field or fruit" he/she cannot receive at least the same amount by using the piece rate to calculate his/her remuneration. Employees principally involved with non-mechanized operations relating to the picking of processing vegetables will be entitled to the general minimum wage rate as of January 1, 2007.
In Nova Scotia, farm workers are generally entitled to the minimum wage, with the exception of employees under the age of 16 who are employed on a farm primarily involved in the production of eggs, milk, grain, seeds, fruit, vegetables, Christmas trees, Christmas wreaths, maple products, honey, tobacco, pigs, cattle, sheep, poultry or animal furs. Also excluded in Nova Scotia are agricultural workers paid on a piecework basis whose work is directly related to the in-field, non-mechanized harvesting of fruit, vegetables and tobacco. The New Brunswick legislation entitles agricultural workers to the minimum wage, as well as a few other benefits, if they work on a farm where four or more full-time employees (who are not in a close family relationship with the employer) are employed for a substantial part of the year. In British Columbia, farm workers employed on a piece work basis to hand-harvest certain fruits, vegetables and berries are covered by a special minimum wage rate based on the type of crop and the volume or weight picked.
Newfoundland and Labrador, the Northwest Territories, Nunavut and the Yukon do not exclude any farm workers from their minimum wage rates. In the latter case, however, the minimum wage for farm workers who are not paid on an hourly or piece-work basis is equivalent to 8 hours at the minimum hourly rate for each day or part of a day worked.
Similarly, the situation of homeworkers (e.g. employees who "telework" or who work from their residence-as has frequently been the case in the clothing and textiles industry) has been regulated in a few jurisdictions. Manitoba's Employment Standards Act requires every employer engaging an employee to do home work to register with the Minister of Labour, and to maintain records of, among other things, the wages paid to the employee and deductions from pay. Moreover, the province's Director of Employment Standards may impose conditions and limitations on an employer respecting a homeworker's wages. The legislation in British Columbia applies to homeworkers and it requires an employer to provide a register of employees working in private residences. In New Brunswick, the provision of a special rate to workers whose hours of work are unverifiable undoubtedly has a bearing on homeworkers. In addition to the requirement to keep records and to provide employees with a written summary of the conditions of employment, employers in Ontario must also pay homeworkers a special minimum rate equivalent to 110 per cent the general minimum wage rate. The 10 per cent premium is intended to cover overhead and tool/machinery costs that are normally borne by the employer. Saskatchewan's Labour Standards Act provides full coverage to homeworkers and specifies clearly that the place of work is not relevant in determining whether an employer-employee relationship exists. Employers are required to keep records setting out the names of homeworkers, their addresses, and the portion of the work performed at home.
A number of jurisdictions have fixed additional minimum wage differentials for various categories of employees. British Columbia sets special rates for live-in camp leaders and residential caretakers in apartment buildings. In Nova Scotia, "inexperienced workers" may be employed during a period of three months at a lower minimum rate, while in British Columbia the First Job/Entry Level Wage Regulation amended the Employment Standards Regulation to create a special minimum wage rate for employees who have little or no previous paid employment experience. Employees are entitled to be paid the regular minimum wage rate once they have accumulated 500 hours of work with one or more employers.
New Brunswick sets a minimum rate for employees whose hours of work are not verifiable and who are not strictly remunerated by commission, along with a separate rate for counsellors and program staff at residential summer camps. Ontario has a special rate for employees who serve alcoholic beverages in licensed establishments as well as for hunting or fishing guides. Quebec sets a different rate for employees who usually receive gratuities and the minimum hourly wage under Quebec's Regulation respecting labour standards specific to certain sectors of the clothing industry is higher than the general minimum wage.
Other Workers Excluded from Coverage
Certain other classes of workers are altogether excluded from the minimum wage (and other provisions) in most jurisdictions. Typical exclusions are supervisory and managerial employees, students employed in training schemes, participants in job experience and rehabilitation programs, registered apprentices, salespersons strictly remunerated by commission, and members and students of designated professions.
Other types of workers are not covered by minimum wage orders and regulations in some provinces. For example: counsellors or instructors at non-profit educational or recreational camps and playgrounds; extras in film or video production; volunteers in religious, charitable or political organizations; persons engaged in work on fishing vessels; teachers; offenders performing community service; and residential caretakers.
Employment and Social Development Canada
May 1, 2005