Dear Employment Specialist,
I have been at the same job for seven years and have received a wage increase only once. Is it mandated or am I entitled to have an annual wage increase to match inflation rates for permanent positions?
Please help me to understand my rights as an employee.
Signed: Wage Increase Rights (WIR)
Employment lawyers confirm that the only place there can be such a mandate is in the employment agreement with your employer. Although a common misconception from many employees, wage increases are purely at the discretion of the employer. Ontario labour law does not specify when or how much a job should be paid or if and when pay increases are to be awarded (Note from Editor: Read more about Ontario Employment Standards here)
Many lawyers recommend to their employer clients that, in some cases, they consider offering cost of living allowance adjustments to their employees – assuming the business can afford to do so. Additional compensation should be linked to performance such as bonuses, and merit-based raises.
Employees seeking a wage increase should consider the following:
1. Identify the right person in your company who would be responsible for giving you a raise. It could your boss or the head of human resources. Make sure you do some research before “the ask”.
2. Ensure that you research the compensation and packages of other comparable positions and industries in the labour marketplace. The standard salary rate for your role is critical information before approaching your boss for a raise.
3. Prepare and present to your manager a brief business plan that justifies the wage increase. DO NOT react emotionally if the employer turns you down. Remember, it could be a business decision or perhaps your performance isn’t adequate and you do not deserve a raise! Try to find out the reasoning behind this decision in a rational and clear way.
4. Wage increases are not the main driver that keeps employees with the company. Research has proven that employees stay at their job because of a good direct manager. The second reason is employee recognition and appreciation. Retention is not only about the salary. A simple thank you note or email, a certificate or even a gift card to acknowledge an employee’s achievements are meaningful initiatives. This is what employees value. The third reason that employees stay with a company is for the diversity of the work.
5. Union environments defer to the collective agreement that generally includes annual wage increases and typically is re-negotiated on a yearly basis.
Best of luck with your campaign for a wage increase.