What Ontario’s $15 Minimum Wage Means for Restaurants

What Ontario’s $15 Minimum Wage Means for Restaurants

The current minimum wage in Ontario is $11.40. On May 30, 2017, Ontario Premier Kathleen Wynne announced a plan to increase the minimum wage in the province to $15 an hour by January 2019. The wage increase will be phased in over the next year and a half. In January 2018, it will be increased to $14 and then to $15 the following January.

Wynne stated that “People are working longer, jobs are less secure, benefits are harder to come by and protections are fewer and fewer.”

But what does this mean for restaurants who already operate on razor-thin profit margins? According to Shanifa Nasser for CNC News, Restaurants Canada says the 31.6% increase in wages “betrays the trust” of the industry. The organization states that the increase would cost an additional $47,000 per year which would likely wipe out the profit margin of the average Ontario restaurant.

Toronto restaurant owner, Fred Luk told the CBC that the minimum wage hike is “the biggest small business killer in the history of Ontario.” And that he now needs to consider whether or not he will need to close his doors. Luke argues that because restaurants are a “training ground for employees,” the industry can’t be expected to operate in the same way as bigger businesses.

The Canadian Federation of Independent Businesses says that the wage hikes will force business owners to make difficult decisions. The organization demanded that Ontario “stop punishing small businesses with higher costs they can’t afford.”

However, others argue that although it will be tough on businesses in the short term, it will have a positive longer-term effect because staff will be engaged in thinking about how they’re going to pay their bills and put food on the table according to Shanifa Nasser for CBC News.

Staffy’s Founder & CEO, Peter Faist believes that it will solve the issue with not being able to find decent line cooks, and fix the industry issues that are inherent to the current compensation model (through no fault of their own).

What do you think? Let us know in the comments below.

Credit: Shanifa Nasser for CBC News. “Ontario’s minimum wage raise a ‘small business killer’ say critics, but for many it means feeling ‘human’

To learn more about Staffy, visit us at www.staffy.com

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