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Despite an aging population, Ontario’s labor force continues to increase, which means that young Canadians are entering the workforce on a daily basis. With 1.9 million youth in our largest province, which is also home to the Capitol, they will shortly make up a sizable share of the labor market.
Despite a socialized education system, many young people enter the labor force knowing little about their rights and duties. The legal minimum wage is an important piece of information that can help young workers avoid being exploited.
Let us first discuss the history of the minimum wage, which was initially enacted in Ontario in 1918. There is already a federal minimum wage that defines the smallest amount a worker can be paid for an hour of work. While there are certain exceptions, this rule applies whether you work casually, full-time, or part-time.
It applies to all types of compensation, including commission, flat rate, hourly, salary, and other forms of compensation (ex: piece work).
However, due to economic disparities across provinces, the minimum wage figure varies every time you cross a border. The current minimum wage in Ontario is $14.25 per hour. While the minimum wage has historically been adjusted in increments, each step forward took a long time (and was not always compatible with inflation).
To solve this, a rule was entered into effect on October 1, 2020, requiring rates to be modified on the same day each year, April 1st.
Exceptions to the Minimum Wage in Ontario
While there are many statutes that have no exceptions, Ontario’s minimum wage is not one of them. In truth, there are various exclusions to the minimum wage; thus, before you commit to a job, be sure you understand your rights.
Minimum Wage for Students
This warning should be especially heeded by young people. It means that students under the age of 18 who work fewer than 28 hours per week are entitled to a minimum salary of $13.40 per hour. It has recently risen from $13.15 per hour. This is true whether the student is working during break or on vacation. In Ontario, the legal age to leave school is 18, which is not always advisable.
Minimum Wage for Liquor Servers
To account for the gratuities given to liquor servers, employees in this position are paid a minimum wage of $12.45 per hour. It was recently increased by $0.25, as were all other minimum wage amounts. Because this is significantly less than the regular minimum wage, make careful you know your NOC code (National Occupation Classification code).
While all sorts of foodservice occupations have similar NOC codes, bartenders are classified as rule 6512, while ordinary table waiting is classified as rule 6513. Knowing the difference can mean the difference between a dollar and a dollar and a dollar and a dollar and a dollar and a dollar and a dollar and a dollar.
Minimum Wage for Hunting and Fishing Guides
Rather than being compensated on an hourly basis, hunting and fishing specialists are paid depending on the total time involved in the assignment. If the employee works fewer than five hours consecutively in a day, they are paid a fixed rate of $71.30. If the hunting or fishing guide works for more than five hours (whether consecutively or separately), they are paid a flat charge of $142.60.
This translates to about 10 hours, so if you can finish the project in seven hours, it’s a successful agreement. However, if it takes you up to 23 hours, it is a significant loss. As a result, keep in mind that this is a minimum pay, not a cap, and thus subject to negotiation.
Minimum Wage for Wilderness Guides
The term “wilderness guiding” refers to a variety of activities ranging from taking you in a hot air balloon to sherpaing you up a slope. These workers are economically equivalent to hunting and fishing guides and fall under the same NOC code, albeit there are age limits.
The fixed charge is $71.30 for fewer than five consecutive hours or $142.60 for more than five hours, spaced out or not. These criteria, however, do not apply to persons under the age of 18 who work fewer than 28 hours per week. In that case, the pay is based on the student minimum wage.
Wage for Homeworkers
Homeworkers – people who work from home — are an example of someone earning more than the provincial minimum wage. In this case, the hourly minimum is $15.70. Because these are firm personnel who utilize their own infrastructure to complete work activities, the extra compensates for the increased wear and tear on equipment.
It saves the employer overhead money on anything from computers to office chairs to designating a piece of the home as an office, and the minimum pay rewards the worker.
Wage for Commission
This is a regular issue for salesmen, as opposed to hourly workers. The phrase “minimum wage against commission” is widely used in the sector. Simply put, you must be paid at least the minimum wage equivalent for your time.
However, if you earn a commission that exceeds that amount, your employer is only required to pay you the difference. It’s essentially an either-or situation.
Minimum Wage and Taxes in Ontario
When you begin new employment, you must complete both provincial and federal tax forms. These are used to compute the tax deduction deducted from your paycheck. Employment Insurance, union dues, Canada Pension Plan fees, and, of course, income tax are all legal deductions. This is withheld by the government until you file your taxes.
Depending on how much you earned over the year, you may receive a refund or owe. If you work at minimum wage, you will almost always end up with a return (thanks to grants and benefits) if you pay your taxes on the spot.
Income tax: is levied depending on the total amount of taxable earnings you earned throughout the year. It is determined by the number of hours worked. Both federal and provincial taxes must be paid. On amounts up to $49,020, the federal amount is set at 15%. On the first $45,142 in income, the Ontario income tax rate is set at 5.05 percent.
Basic Personal Amount: This is the amount you can earn before being taxed on your earnings. It is fixed at $12,298 for the 2020 tax year and grows annually in accordance with the consumer price index. If you work at the $14.25 minimum wage for a 40-hour workweek and only take two weeks off, you will make a total of $28,500.
The Bottom Line
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