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3 Things to Consider when Minimum Wage Increases

But what about me? I’m already trained and I have proven to be loyal….On October 1, 2015 in Manitoba, the new minimum wage rate of $11 per hour goes into effect – up from the current $10.70. At first glance it seems straight forward – difficult for the business and welcomed by the employees. But there is another angle to consider. The new rates will be welcomed by those being paid minimum wage but what will the reaction be from your other hourly employees who are earning slightly more?

Walmart recently implemented a new minimum wage rate for all new hires. While this was great for the new employees, those employees who had worked their way up to greater-than-minimum wage levels didn’t see it quite so favourably. The new minimum only served to close the gap between new staff and those who had loyally served the company for a longer period of time.

It would be easy if everyone on the payroll received the same hourly increase when minimum wage goes up. But that isn’t what happens. It doesn’t happen for a multitude of reasons not the least of which is affordability. So what is an employer to do?

Here are some options for consideration:

  1. Look at all of the hourly employees. Is possible to give them all the $ .30 per hour increase? If not, could you provide a smaller increase that would send a message of appreciation for their loyalty and experience?
  2. Do you have an annual bonus program? If so, the bonus value could be linked to the length of time they have worked for your company.
  3. Are there non-monetary ways to recognize the contribution of your experienced employees? Highlighting them in the company newsletter and/or praising them at a staff meeting for their extra efforts and dedication are options.

A rising minimum wage occurs somewhat regularly and is always a challenge for business owners. Be as transparent as possible about what is happening with wages. Your employees know that you have overhead and are taking many risks but they still want to know they are valued. Keep in mind the need to show your staff appreciation and implement the new minimum wage knowing the challenges that it can bring.

Best of luck,

– Cindy Ruth