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Employment & Labour

Employment standards changes will negatively affect small businesses

Small businesses will be negatively affected by recent employment standards changes, employment and labour lawyer Inna Koldorf tells The Lawyer’s Daily.

While businesses don’t typically oppose increases to the minimum wage, the drastic changes that took effect on Jan. 1 will likely have a detrimental impact on Ontario employers, says Koldorf, a partner with Miller Thomson.

“I think that one thing the government didn’t consider is how cyclical the whole increase is going to be and how it’s going to affect those who earn minimum wage,” she tells the online legal publication.

Koldorf says her clients have told her that the changes will negatively affect their budgets.

“[It] would look like they’re going to cut back on staff to make sure the same dollars can be spread across staff that they already have. They’re probably also going to have to increase the prices for the goods and services they provide because they have to compensate for the fact that their labour costs will eventually increase,” she says.

Koldorf says price increases for goods and services are often felt most acutely by those who earn minimum wage, so their new pay raise may not go very far if things are more expensive.

She says businesses may also consider automation to compensate for not being able to afford to hire new people.

The changes that took effect on Jan. 1 include a rise in minimum wage to $14 an hour; allowing 10 days of personal emergency leave per year for all employees; and three weeks paid vacation after five years of service with the same employer.

The minimum wage will be increased again on Jan. 1, 2019, to $15 per hour.

Koldorf says businesses should work closely with their accountants to plan for the impact of the recent changes.

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