This week, the Government of British Columbia made an announcement that it would be indexing increases in the general minimum hourly wage and liquor serving wage to British Columbia’s Consumer Price Index (CPI). The CPI measures changes in the price level of a market basket of consumer goods and services purchased by households, and includes things such as the cost of food, shelter, household operations and furnishings, clothing and footwear, transportation, health and personal care, recreation, education and reading, and alcoholic beverages.

What does that mean?

Effective September 15, 2015, the general minimum hourly wage will increase from $10.25 to $10.45, and the liquor server wage from $9.00 to $9.20 an hour. From this point forward, the minimum wage will be increased annually, based on the percentage the British Columbia CPI increased in the previous calendar year. In the case of a negative CPI change, the minimum wage would stay the same that year.

Additionally, the daily rate for live-in home support workers and live-in camp leaders, as well as the monthly rates for resident caretakers and the farm worker piece rates (for harvesters of certain fruits and vegetables) will be increased proportionate to the 20 cent increases in the general minimum hourly wage. These new changes will also take effect on September 15, 2015.

The last time the minimum wage increased was in 2012, when it went up to $10.25 an hour from $10.00.

Why the increase?

According to Shirley Bond, the B.C. Minister of Jobs, Tourism and Skills Training and Minister Responsible for Labor: “Raising the minimum age allows B.C. to keep pace with minimum wages in the rest of Canada while maintaining our competitiveness. We remain focused on our plan to grow B.C.’s diverse economy to encourage investment that leads to high-paying, family supporting jobs.” Bond also stated that people earning the minimum wage in British Columbia represents 5.9% of the paid workforce, below the national average of 7.2%

Naomi Yamamoto, The Minister of State for Tourism and Small Business adds that “small businesses told us they want the minimum wage increase to be reasonable and predictable, which is why we implemented a formula-based approach tied to economic indicators.”

As stated, employers and business owners will have until September 2015 to implement the necessary changes in their financing plans. If you are concerned about the impact of the rising minimum wage on your business, are considering outsourcing your payroll, or require professional Human Resources consultation - Contact TPD!