Discussing recent changes to the Ontario minimum wage
On January 1st, 2022, the Ontario government introduced legislation that raises the minimum wage from $14.35 per hour to $15.00 per hour. This includes an increase to the special minimum wage rates for students under 18 years old, homeworkers, and hunting, fishing and wilderness guides. Most notably, the Ontario government has eliminated the special minimum wage rate (the “tipped wage”) for liquor servers. This class of workers is now entitled to the general minimum wage – a 19.5 percent increase in their minimum hourly wage.
Historically, liquor servers have been paid below the minimum wage, due to the belief that tipping can and will make up the difference. It should be noted that many of these workers have increasingly seen tips pooled and redistributed among restaurant staff, and may therefore be receiving fairer treatment under the new legislation. In addition, this sector of work has been hit hard by the pandemic, and its workers would benefit greatly from legislation that favours improvements to their compensation.
The changes to the minimum wage in Ontario can be compared to provinces like British Columbia, where the minimum wage for all workers — including liquor servers — is $15.20 per hour. However, there are several jurisdictions that continue to have a tipped wage. For example, Quebec has a tipped minimum wage of $10.80 per hour, as compared to their standard minimum wage of $13.50 per hour. Additionally, the United States has a minimum cash wage of $2.13 per hour, which is supplemented by the employer up to $7.25 per hour if the server does not receive enough tips to make $7.25 per hour.
There are questions that arise in response to these changes: if the lower minimum wage for liquor servers has promoted a culture of tipping, how will the social practice of tipping be affected by these changes, and consequently, how will these changes impact the amount of tips that servers bring home each night? This new legislation is sure to be met with mixed reactions. It will be interesting to monitor the effects on business owners, servers, and tipping culture going forward.
-HH
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