Although paying the city’s part-time and casual employees a minimum of $15 per hour won’t break the bank, future changes to supervisory wages could have a serious impact on civic finances, says an internal report.
Initial cost estimates show that increases to minimum wage will cost an additional $65,000 per year, but could likely require an extensive overall compensation review.
Upon taking office, the NDP government followed through on its promise to increase the minimum wage to $15 per hour. To allow businesses the time to adjust, the changes were slated to take place gradually over the next three years.
In anticipation of the first phase, set for Oct. 1, 2015, Mayor Nolan Crouse asked administration for a report outlining the effect to the city’s budget.
The report, received last week, indicated that while the initial hike from $10.20 to $11.20 per hour – applicable to only 13 non-union casual employees – will have minimal impact, the full implementation to $15 per hour in 2018 will cost the city upwards of $65,000 per year.
Currently, there are 129 casual city employees that make under $15 per hour.
Crouse said he is pleased by the figure outlined in the report, but is concerned about the compression on positions classified at higher wage levels.
Although the direct impact to the city’s payroll is that of one full-time equivalent (FTE), the report indicates that changes in remuneration could be required to ensure that supervisors are compensated at a higher rate than their subordinates.
“You’re going to have more supervisory staff that are compressed against (the new minimum wage),” said Crouse. “The gap is not wide enough for good human relations in a corporation. I think it’s going to push other salaries up as well.”
A compensation review is being proposed for the upcoming year to ensure adequate gaps are maintained. The cost impact of subsequent changes has yet to be determined.
While the changes coming into effect next month can be absorbed into the city’s current budget, future increases will require adjustments to property taxes and user fees.
Much like corporations are expected to raise prices, Crouse said municipalities are likely to pass the buck to the taxpayer by increasing taxes.
“We’ll raise the taxes because that’s our customer. That’s where we get our money,” he said.
