Ontario’s general minimum wage will increase from $17.60 to $17.95 per hour on October 1, 2026.
For an employee working 40 hours each week, the increase represents approximately $14 more per week, or $728 more per year before deductions, assuming the employee works throughout the year.
Although the change may appear straightforward, minimum-wage compliance is not limited to employees who are described as hourly workers. It can also affect employees paid through a salary, commission, piece rate or other compensation arrangement.
Employees who believe they are not being paid correctly can learn more about their rights under Ontario’s employment standards laws.
The current and forthcoming rates are available through the Government of Ontario’s official minimum-wage guide.
Minimum Wage Is Not Only for Hourly Employees
One common misconception is that minimum-wage rules protect only employees whose offer letter lists an hourly rate.
Under Ontario’s Employment Standards Act, 2000, most eligible employees must receive at least the applicable minimum wage whether they are paid:
- hourly;
- through a salary;
- by commission;
- by piece rate;
- at a flat rate; or
- through a combination of payment methods.
A salaried employee is not automatically exempt from minimum-wage or overtime requirements. Depending on the position and any applicable exemptions, the salary must still provide at least the minimum compensation required for the employee’s hours of work.
Similarly, an employer generally cannot avoid minimum-wage obligations simply by describing an employee’s compensation as “commission only.” The employee’s total earnings must still satisfy the applicable statutory minimum, subject to any special rules governing the position.
Compensation terms involving salary, commissions, bonuses or other incentive payments should be clearly addressed before an agreement is signed. Employees considering a new position can obtain an employment contract review, while employers can reduce uncertainty through properly prepared employment contracts and workplace policies.
The Increase Can Also Affect Overtime Pay
Most Ontario employees who are entitled to overtime must receive overtime pay after working more than 44 hours in a workweek. The general overtime rate is one-and-a-half times the employee’s regular rate of pay.
An employee earning the new general minimum wage would therefore have a minimum overtime rate of approximately $26.93 per hour.
Not every employee is covered by the general overtime rule. Ontario has exemptions and special rules for certain occupations and industries. Whether an exemption applies usually depends on the employee’s actual duties and working arrangement—not merely their job title.
For example, calling someone a “manager” does not necessarily determine whether that person is excluded from overtime protection. The substance of the position matters.
Employees who have worked unpaid hours or have questions about their entitlement to overtime can review Pelsmakher Law’s information on unpaid wages and employment standards.
What About Salaried Employees?
A salary does not give an employer unlimited access to an employee’s time.
Where a salaried employee is covered by minimum-wage requirements, the employer must ensure that the employee’s compensation remains sufficient for the hours worked. Long or irregular hours can create problems where an employee’s effective hourly rate falls below the statutory minimum.
Salaried employees may also be entitled to overtime unless a specific exemption applies. Employers should therefore avoid assuming that every employee receiving an annual salary is excluded from Ontario’s hours-of-work or overtime rules.
Employers concerned about the classification of salaried, managerial or commission-based employees should consider a broader employment standards compliance review.
What About Federally Regulated Employees in Ontario?
The Ontario minimum wage does not govern every workplace located in the province.
Employees working in federally regulated sectors, such as banking, telecommunications, broadcasting, airlines, railways and certain interprovincial transportation businesses, are governed by the Canada Labour Code, rather than Ontario’s employment standards legislation.
Different minimum wage and overtime rules may therefore apply. Employees who are uncertain which legal regime covers their workplace can review Pelsmakher Law’s information for federally regulated employees.
The distinction can affect more than wages. Federally regulated employees may also have different rights concerning hours of work, termination, severance and unjust dismissal.
What Employees Should Check
Employees earning at or near minimum wage should review the first pay statement covering work performed on or after October 1, 2026.
Important information to check includes:
- the hourly or effective hourly rate;
- the number of hours recorded;
- whether all working time was included;
- overtime calculations;
- commission or piece-rate earnings;
- deductions from wages; and
- whether the correct provincial or federal rules were applied.
Employees should consider keeping their own records of hours worked, schedules, pay statements and relevant communications, particularly where there is a disagreement about unpaid time or compensation.
The ESA also prohibits employers from penalizing employees because they ask about or attempt to enforce their employment standards rights.
What Employers Should Do Before October 1
Employers should not wait until the first October payroll is processed to address the increase.
Before October 1, employers should:
- Update payroll systems and wage schedules.
- Identify employees earning at or near the new minimum.
- Review salaried, commission and piece-rate arrangements.
- Confirm that overtime is being calculated correctly.
- Update offer letters and compensation templates.
- Examine whether any employee classifications or exemptions may be incorrect.
- Determine whether any workers fall under federal jurisdiction or an Ontario special rule.
- Consider whether the increase creates wage compression between entry-level and more senior positions.
A minimum-wage increase may also create employee-relations concerns where the wages of newer employees move closer to those of longer-serving or more experienced employees. Although employers are not generally required to increase every employee’s wage by the same amount, businesses should consider whether broader compensation adjustments are appropriate.
Employers requiring assistance with workplace compliance, payroll practices or employee classification can obtain ongoing HR advisory support.
Can an Employer Reduce Hours After the Minimum Wage Increases?
Employers can generally make legitimate scheduling and staffing decisions, subject to the employee’s contract, statutory protections and human-rights obligations.
However, a significant unilateral reduction in an employee’s hours, wages or overall compensation may create additional legal issues. Where the change substantially alters a fundamental term of employment, the employee may have grounds to allege constructive dismissal.
Not every reduction in hours will amount to constructive dismissal. The analysis depends on factors such as:
- the size and duration of the reduction;
- the terms of the employment agreement;
- the employer’s past practices;
- whether the employee agreed to the change; and
- the effect on the employee’s overall compensation.
Employees should obtain advice before resigning in response to a workplace change, as resignation can affect their available legal remedies.
Frequently Asked Questions
Does every Ontario employee receive a 35-cent raise?
No. The ESA establishes a minimum wage floor. It does not generally require an employer to provide the same increase to employees already earning more than $17.95 per hour, unless an employment contract, collective agreement or workplace policy provides otherwise.
Does the increase apply to salaried employees?
It can. Being paid a salary does not, by itself, remove an employee from minimum-wage or overtime protection. The employee’s duties, hours, compensation structure and any applicable exemptions must be considered.
Does an employer have to increase commission rates?
Not necessarily. However, the employer must ensure that an eligible employee’s overall compensation continues to satisfy minimum-wage requirements. Employers should carefully review commission agreements and any provisions dealing with advances, chargebacks, cancellations or when a commission is considered earned.
Can tips be counted toward minimum wage?
An employer must pay an employee at least the applicable minimum wage directly. Tips and gratuities are generally separate from the employer’s minimum-wage obligation.
Can an employer wait until the next full pay period to apply the increase?
The new minimum wage applies to work performed beginning October 1, 2026. When a pay period crosses that date, the employer should account for the rate that applied when the work was performed.
Is the student rate available for every college or university student?
No. The lower student rate is based primarily on the worker’s age and working circumstances. A worker does not qualify for the student rate simply because they attend college or university.
What can an employee do if they are paid less than minimum wage?
An employee may be able to pursue unpaid wages through an employment standards claim or, depending on the circumstances, through a civil proceeding. The appropriate route depends on the amount owing, the nature of the dispute and whether other claims are involved.
The Bottom Line
Ontario’s October 1, 2026 minimum-wage increase is more than a basic payroll adjustment. It is an opportunity for employees to confirm that they are being paid correctly and for employers to review whether their compensation practices comply with applicable employment standards.
Questions about minimum wage, unpaid wages, overtime, commission pay or employee classification often depend on the employee’s actual duties and working arrangement.
Employees and employers seeking advice about a specific situation can contact Pelsmakher Law for a consultation.
This article provides general information only and does not constitute legal advice. Employment standards rules may include exemptions and special rules depending on the employee’s occupation, industry and workplace.
The internal links were also checked against the live pages on your website, including your employment standards, contract review, federal employee, employer compliance, HR advisory and contact pages.
