Impact of Minimum Wage Increase

March 2018

Ensuring employees are able to survive on what they earn is the impetus for an increase in the minimum wage to $15 per hour. The current rate has recently risen from $11.60 per hour to $14.00 per hour; a 20% increase. It rises to $15.00 per hour on January 1, 2019. A condo corporation supporting ten full-time employees at or near minimum wage will require an estimated additional $50,000 during 2018.

Without doubt providing a living wage is a worthy goal but one sure to affect condo corporations and residents.  Higher condo fees are a virtual certainty without a re-evaluation of how each community chooses to operate.  A high-rise building can have a dozen or more employees working at or near minimum wage.  This likely includes concierge, security and cleaning staff.

The only way to blunt the impact of wage increases is to operate with fewer employees.

For security, some condo corporations may choose to rethink 24/7 on-site security and consider alternatives such as remote concierge services in place of a physical presence during off-peak hours. There may be greater reliance on security technologies to compensate for reduced staffing levels.  Other communities may be content to lock doors and place the onus on residents to admit and supervise their guests during these hours.  In practice, keeping a large building secure generally requires a minimum of two individuals at any time while maintaining the varied concierge services expected by residents.  The cost of keeping doors unlocked, ensuring common areas are secure, accepting packages and monitoring security cameras is one many condo communities are likely to maintain.

Wage increases are only one cost pressure on condo corporations during 2018.  Condo budgets must now support the monthly condo tax, recently implemented changes to the Condo Act that require more frequent and extensive disclosure, and licensing costs relating to condominium management.

Condo corporations that have failed to reflect these higher costs in their budgets could run a deficit for the current fiscal year or have a lower surplus than anticipated.