It’s been a crazy year of change for British Columbia and the changes aren’t stopping anytime soon. Minimum wage standards in Canada have seen significant changes with Alberta and Ontario agreeing to increase the minimum wage to $15 per hour by October 2018 for Alberta and January 2019 for Ontario.
It appeared that BC was slowing following suit; wages are to increase 50 cents to $11.35 an hour starting Sept. 15th 2017. With the NDP now in power and promising a $15 minimum wage, businesses are being told to prepare for incremental increases to the minimum until we see it reach $15 by 2021. Then there’s the changes to CPP that will be affecting employees and employers alike starting in 2019 that will also be added on top.
A minimum wage change will likely affect your business regardless of whether you pay more than the new potential minimum wage. What can you do as an employer to prepare your organization for something like this? Let’s explore some of the core considerations you should be thinking about for the coming changes.
1. Follow the letter of the law
Make sure you implement the legislative changes and meet the minimum standard. Even those on salary need to be given the equivalent of the minimum wage. Make sure that changes in pay properly communicated to employees in writing. You can do this one on one or send out a letter explaining the changes. Be prepared for questions from employees about how this will impact them for things like taxes, government benefits such as Canada child benefit etc.
2. Honesty is the best policy
You definitely want to communicate the changes in compensation to other staff as well. Those who are above the minimum could be upset that their co-workers are receiving these increases. This is especially true for those who have earned increases over years of service or those who have more difficult jobs with more responsibility. No one likes to see others get ahead “unfairly” which is how it will be perceived. Honesty in the best policy and being upfront is crucial. You may want to increase everyone’s wages accordingly but there’s a good chance that’s not possible. Explain that – but also be proactive to explain potential alternatives for affected employees like flexible hours, additional time off or additional raises in the future.
3. Keep your people in the game
There’s potential that you may not be able to pay all the staff you have based on a wage change. Things like job sharing and work sharing might have to be considered so that all you employees can remain with the company. Having 2 employees share the hours and responsibilities of one job will keep them in the chairs while you can work on increasing revenue for the company to recover. Work sharing can be set up with Service Canada to reduce the work week between 1 and 3 days but creates a fundamental change in the work contract. HR professionals should be consulted before rolling out a programs like these.
4. Ensure the survival of your company
Let’s face it – without your company the staff wouldn’t be there. It’s better to downsize to 5 staff from 10 than to fold up your tent and go home. Consider ways to leverage technology so that you can work more efficiently with less people. Even if these changes were not happening, you’d be crazy not to be leveraging today’s technology with the way business is these days. There’s lots of software out there, often for free, that help teams work more efficiently – programs like Slack, FreshDesk, and BombBomb can help you save time while keeping up with Customer service and clientele. Make sure you turn every vital function of your business into a franchise like process ensures that anyone can run operations with ease. This way employees can be more versatile in their roles.. Running a lean, efficient shop could mean the difference between barely surviving and thriving.
5. Think a few moves ahead
It’s important to think about these changes could impact the future of your business. You may want to expand and hire more staff but need to consider if that is a realistic option should all this take place. Play the defense and don’t waste precious resources on training and developing people you might have to let go in the not too distant future. Make yourself aware of how other changes like the enhanced CPP contributions starting in July 2019 will affect payroll. Similar to points #3 & 4 – you may need to consider how to run more efficiently with technology and cross train in jobs in order to recover and grow. Learn about what changes are coming and the timeline of them to help you see what’s coming around the corner.
Changes are afoot. Think about what areas will be hit the hardest and plan accordingly. Develop an action plan ahead of time to know clearly how you will navigate the waters and ensure that you get the best result possible.