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How to Prepare for Minimum Wage Increases

Posted by Karen McMullen

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Jun 12, 2015 9:00:00 AM

How_to_Prepare_for_Minimum_Wage_Increasesminimum wage increase impacts millions of businesses. But small businesses in particular can be crippled by it. They can’t simply write bigger cheques to their employees without increasing their revenue or they’ll be out of business. It’s a tough spot to be in—but one that must be dealt with.

Even with tough margins and a slow economy, the government can force a minimum wage increase on business owners. Once a minimum wage increase goes into effect, it might be too late to take the steps needed to ensure your business’s survival. So to ensure that your business doesn’t get hit too hard by it, you need to keep your head in the game and prepare for it.

Use these tips below and you might be able to weather the storm.

Raise Your Prices

We know, you don’t want to raise your prices—you risk losing valued customers if you do. But sometimes, this is your only option. You’ll need more revenue to make up the cost of the minimum wage increase. If you’re paying your employees minimum wage, chances are your competitors are, too, so they’ll likely increase their prices as well, putting you all on an even playing field. If you prepare ahead of time, you can gradually increase your prices instead of making one big increase at once, so it’s not as difficult for your customers to handle.

Meet with Your Accountant

You have an accountant for a reason—he can help you look through the books and find ways to cut expenses where possible. He’s an expert in finances so even though you’ve probably poured through your books and squeezed every penny that you could, your accountant might be able to find ways to cut costs that hadn’t occurred to you.

Increase Productivity

If you can’t find any area of your business where you can reduce your expenses, you can try increasing your productivity. Take a close look at your schedules to see if you’re maximizing your workforce. Outsource your time-consuming back office responsibilities so you can spend more time on your core responsibilities, such as sales and services.

Analyze every department and consider how you can optimize performance—how you can get the most out of your workforce. The more productive your business is, the more money you can save in the long run.

Hire Smart

If you’re going to have to pay your hourly employees more, you should find the best talent that can give you more for your money. Hiring the right workers from the start and focusing on retention can increase productivity and reduce turnover costs. You should also consider whether or not you could benefit from hiring independent contractors and temp workers rather than permanent employees. This can significantly cut your payroll costs.

Invest in Technology

Technological advances have come a long way in recent years and you should be taking advantage of them to get more done with fewer resources. Consider what type of automation would help your business. Which type of technology will allow you to have fewer employees on staff? If you’re in retail or the restaurant business, online ordering could benefit your company. Using direct deposit can save you valuable time at every pay period. Using a CRM system can streamline the way you sell your products or services, so you can sell more with less effort. The type of technology you invest in will depend on the type of business you run.

Though they won’t guarantee you’ll stay afloat, these tips can help you deal with a minimum wage increase.

7 Signs It's Time to Outsource Payroll

Topics: Minimum Wage Increase

5 Steps to Prepare for Minimum Wage Increases

Posted by Stacey Duggan

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Apr 4, 2014 9:05:00 AM

5 steps to prepare for minimum wage increasesOntario is all set to implement minimum wage increases on June 1st of this year. With only four months of lead-time, businesses haven’t had a lot of time to prepare for these minimum wage increases. Prepared or not, businesses must begin paying employees at the new rate as soon as the new law takes effect. If you’re not prepared already, it’s time to start putting serious effort into getting ready. While these minimum wage increases aren’t huge, they can have a huge impact on businesses that have a lot of employees. Even small businesses will feel the pinch from higher wages and taxes. The five steps below can help you prepare, and stay prepared, for these and future minimum wage increases.

Employee Audit

Before you can determine what you will be paying employees, you need a complete record of what you’re currently paying them. You need to know how many hours they’re working, and which minimum wage applies to them. You probably already know what you’re spending on payroll, but you’ll still need to break it down to individual employees. There are several minimum wages depending on the employee’s job and status. If you have employees that work varying hours, the calculations will be even more difficult. To know what you’ll be spending after the minimum wage increases, you’ll need to crunch the numbers for each and every employee.

Determine Additional Wages

Once you’ve crunched the numbers, you can calculate how much more you’ll be paying after the minimum wage increases. For many employees, this will be a simple math problem. Multiply their current hours by the current minimum wage, then subtract that number from their expected hours multiplied by the new minimum wage. As long as they have fixed, predictable hours, the numbers aren’t hard to figure out. If you have employees that work variable schedules, or who work different hours during different times of the year, then the math gets quite a bit harder. It may come down to figuring out an average, and making a best guess as to the overall change.

Calculate Additional Taxes

Of course, the minimum wage increases also bring an increase in taxes. You’ll need to have your payroll department ready to begin withholding and remitting more taxes from your employees’ paycheques. As wages increase, so do payroll taxes, and it’s your responsibility to adjust to the new calculations. Like the current payroll calculations, if you get them wrong, there are serious legal consequences. You’ll need to make sure that the changes are accurate for each employee, and that you’re ready to implement the changes on June 1st.

Prepare for the Future

Pay attention to the process as you’re going through it, and make notes of any difficulties you have along the way. Ontario is proposing tying future minimum wage increases to inflation, so you may end up doing this every year. While they’re promising more lead-time, you’ll still have to spend time and effort preparing for annual increases. You can save yourself some aggravation by learning from your mistakes along the way.

Get Help From a Pro

Of course, you can save yourself a lot more aggravation by letting a professional payroll service handle the minimum wage increases for you. They can quickly and efficiently perform all of the necessary steps to prepare for the change, without taking up your time or disrupting your business. They have the experience, personnel, and equipment to roll out the wage increases accurately and on time. With their help, you won’t have to worry about whether you’ve missed something that could attract the CRA.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Service Provider, Minimum Wage, Minimum Wage Increase

Alberta's Minimum Wage Increases September 1, 2013

Posted by Stacey Duggan

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Sep 3, 2013 10:40:00 AM

Alberta Human Services

 

 

Canadian payroll providers take note; the minimum wage in Alberta increases as of September 1st.

Most Alberta employers must pay their employees, including students and youth, at least the minimum wage. The minimum wage in Alberta is set out in the Employment Standards Regulation and is as follows:

  • an hourly minimum wage of $9.75 ($9.95 effective September 1, 2013) for most employees;
  • an hourly minimum wage of $9.05 for employees serving liquor as part of their regular job;
  • a weekly minimum wage of $389 ($397 effective September 1, 2013) for many salespersons, including land agents and certain professionals; and
  • a monthly minimum wage of $1,854 ($1,893 effective September 1, 2013) for domestic employees.

However, certain categories of employees are exempt from the minimum wage requirement in the Regulation.

For more information visit the Government of Alberta Website

 

Topics: workforce compliance, Employment Standards Act, Government Compliance, Minimum Wage, Minimum Wage Increas, Minimum Wage Increase

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