Some jobs may be paid less than established minimum when organizations use salary caps (limits) – green circled level Union Power: - When unions represent portion of workforce, may be able to use their power to obtain wage rates out of proportion to their relative worth - Sometimes union controls most or all of a particular skill such as carpentry or plumbing enabling union to raise prevailing rate for the job Productivity: - Companies must make profit to survive as without it, company cannot attract investment to remain competitive - Companies cannot pay workers for more than they contribute through their productivity - If such happens, company redesigns jobs, trains new workers to increase supply or automate Wage and Salary Policies: - Organizations have wage and salary policies that can be adjusted accordingly such as: o Giving non-union workers same raise as received as unionized workers o Paying premium above prevailing wages to minimize turnover and recruit best workers o Automatic cost-of-living clauses that give employees automatic raises when Statistics Canada COI index increases - Raises/policies that increase employee compensation move wage-trend line upwards Compa Ratio: An index that indicates how an individual/ group’s salary relates to midpoint of their relevant pay grades. - Ratio above 1 will indicate large number of employees bunched at top of the pay-grade - Ratio lower than 1 may be caused by new employees or high turn over Equation: Salary of Employee Midpoint of Pay Grade or Average of Salaries Paid Midpointof PayGrade Government Constraints: Canada Labour Code: Federal law regulating labour relations under federal jurisdiction.
- Sets requirements for minimum wage, overtime pay, equal pay, child labour and record keeping - Minimum wage requires a minimum hourly rate of pay regardless of worth of job - If those just above minimum wage do not also get raises, wage differentials will be squeezed together known as wage compression Ex) Overtime will be 1.5 times more than usual pay (usually anything over 40 hours) - Executive, administrative, professional and other employees exempt from overtime provision Minimum Wages : All provinces will have minimum wage provision applying to most classes of workers other than labourers and domestic servants. Legislation provides for board to set minimum wage rates, and these imposed by all provincial boards for determination of classes of employees which minimum wages are to be established. Contracts with Government: Fair Wages and Hours of Labour Act applies contracts made with Government of Canada for all types of work and is mandatory on part of contractors dealing with government to pay fair wages and provide 8-hour work day Staff Records: Canadian Labour Code requires employers in industries falling under federal jurisdictions to furnish information related to wages on the demand of Ministry of Labour. Similar provisions in provincial legislations as well and accurate records must be kept in order to monitor implementation of fair wages and work hours.
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