Wednesday, October 5, 2022

NBU stance on minimum wage and OT rate

The Department of Post-Secondary Education Training and Labour recently requested feedback on the minimum wage rate and minimum overtime rate in the province.
This is part of the statutory review of the minimum wage which must take place every two years as per the Employment Standards Act.
The following is the submission from the New Brunswick Union:
1. Is the current minimum wage rate appropriate?
In the opinion of the NBU, the current minimum wage rate is not appropriate. Just consider trying to live in one of the three cities (Fredericton, Moncton and Saint John) as evidence. As of October 1, 2022 the rate is $13.75 per hour.
This equates to earnings of $2,200 per month before taxes. A two-bedroom apartment in one of those cities as per August 2022 was between $1,050 and $1,300. This means half or 50 per cent of a minimum wage earners money is spent on rent. The Canada Mortgage and Housing Corporation (CMHC) recommends monthly housing costs not exceed more than 32 per cent of your average gross (pre-tax) monthly income.
This leaves just $1,100 a month for essentials such as food, clothing, transportation, utilities, and childcare (in some cases).
Based on the CMHC recommendation of housing accounting for 32 per cent of your average gross (pre-tax) monthly income, minimum wage in the province should be between $21-22.
*Please note, calculations above are based on a 40-hour work week.
2. Is the current method of adjusting the minimum wage effective?
No. Given the above, the current minimum wage is more than eight dollars below what is needed to live in the province. Indexing the rate to the Consumer Price Index will not get minimum wage earning New Brunswickers anywhere close to an appropriate level any time soon. This is not even factoring in the rate of inflation.
3. Should the minimum wage rate in other Atlantic provinces be a factor in New Brunswick’s minimum wage adjustments?
No, given all of the other Atlantic provinces are under the threshold set by the CMHC.
4. Is setting the minimum overtime rate at 1.5x the minimum wage (for hours worked beyond 44 hours in a week) effective?
No. The Employment Standards Act does not set either minimum or maximum hours of work per week, so having the overtime rate kick in a 44 is essentially an arbitrary number. Most people view full-time employment as 40 hours per week. We believe the overtime pay should begin before 44 hours worked. It should kick in somewhere between 36-40 hours worked.
Second, a person should receive overtime pay on their actual rate of pay. If someone is making $20 per hour, their overtime rate should be based on their hourly rate and not the minimum wage.