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Minimum Wage in Northwest Territories: 2024 Updates
The minimum wage is the lowest hourly wage an employer can legally pay workers. It is an important labor standard that helps protect low-wage workers from exploitation and poverty.
This article comprehensively guides minimum wage laws and regulations in Canada’s Northwest Territories (NWT). We will cover the current rate, its determination, historical increases, comparisons to other regions, rules for minimum wage workers, considerations for remote parts of the NWT, and workers’ rights and recourse.
With clear explanations, accurate data, and actionable advice, you will gain valuable insight into this critical workplace protection.
Minimum Wage in Northwest Territories 2024
The current minimum wage in the Northwest Territories is $16.05 per hour as of September 1, 2023.
This gives the NWT one of the highest minimum wages not just in Canada but across North America. It reflects the high costs of living in parts of the territory and an effort to provide a decent standard of living to low-income workers.
How the Minimum Wage is Determined in Northwest Territories
The process of setting the minimum wage rate in the Northwest Territories has evolved over time. Historically, a Minimum Wage Committee reviewed economic and social factors every two years and made recommendations to the Minister of Education, Culture and Employment (ECE), who established the rate.
However, since September 2023, the minimum wage has been determined by a formula that is adjusted on an annual basis on September 1 each year based on:
- Consumer Price Index (CPI) – The CPI measures inflation based on the changing cost of a basket of consumer goods. The NWT formula uses explicitly the CPI for the capital city of Yellowknife to track local living costs.
- Average Hourly Wage (AHW) – The AHW represents the overall average wage rate for all occupations in the territory. It benchmarks the minimum wage against broader pay trends.
Basing the annual adjustment on the CPI and AHW ensures the minimum wage keeps pace with the higher living costs in the NWT while providing fair compensation compared to overall pay scales. It also gives employers greater certainty in planning.
Historical Minimum Wage Rates in Northwest Territories
The first minimum wage introduced in the Northwest Territories in 1968 was just $1.25 per hour. Over the next 25 years, increases ranged from $0.25 to $1.00, typically occurring every one to five years:
| Year | Minimum Hourly Wage |
| 1968 | $1.25 |
| 1970 | $1.50 |
| 1973 | $2.00 |
| 1974 | $2.50 |
| 1976 | $3.00 |
| 1980 | $3.50 |
| 1982 | $4.25 |
| 1986 | $5.00 |
| 1991 | $7.00 |
After 1991, gaps emerged in how frequently the minimum wage was raised. Rates stayed at $7.00 per hour until 2003, when it went up to $8.25. Another gap followed until 2010, when it increased to $9.00. Since then, more regular increases have occurred:
| Year | Minimum Hourly Wage |
| 2003 | $8.25 |
| 2010 | $9.00 |
| 2011 | $10.00 |
| 2015 | $12.50 |
| 2018 | $13.46 |
| 2021 | $15.20 |
| 2023 | $16.05 |
Switching to predictable annual adjustments based on economic conditions provides stability and fairness for both workers and businesses.
Source: https://loanscanada.ca/minimum-wage/northwest-territories/
Rules and Regulations for Minimum Wage Workers in NWT
In addition to understanding the basic minimum wage rate, workers should be aware of key rules and regulations that come with it. Some of the most important ones in the NWT are summarized below:
Overtime Pay
- Overtime pay of 1.5 times the regular wage is required in the NWT for hours over 8 per day or 40 per week.
Holiday Pay
- Employees qualify for holiday pay if they meet eligibility criteria, work the day before and after, and work on the holiday itself.
- The NWT has 11 paid statutory holidays. Holiday pay is an average day’s regular wages while working the holiday is paid at 1.5 times the regular wage.
Allowable Deductions
- Deductions for board/meals and lodging are allowed only if the wage does not fall below the minimum.
- Maximum deductions are $0.65 per meal and $0.80 per day for lodging.
Illegal Deductions
- Wages cannot be deducted for breakage, shortages, uniforms, unpaid debts, or other losses.
Termination
- After 90 days of employment, workers are entitled to written notice or termination pay unless fired for cause.
Impact of Cost of Living in Remote NWT Communities
The Northwest Territories covers a vast 1.3 million km2 but only has around 45,000 residents. Many live in extremely remote communities where the cost of living is dramatically higher, up to 37% above the Canadian average. (Source)
Essential goods like food, housing, utilities, and fuel can cost exorbitantly more in remote areas. For example, in Paulatuk, milk is $15 per bag, apples are $15 each, and a case of water is $45 (Cabin Radio, 2020). These high costs explain the need for higher minimum wages.
The NWT formula accounts for this through the Yellowknife-specific CPI and by benchmarking against broader territorial wages. This ensures workers can afford reasonable living standards regardless of where they reside.
Rights and Recourse for Minimum Wage Workers in NWT
Employees who earn minimum wage have workplace rights and options for recourse if those rights are violated:
- They can file employment standards complaints if paid less than the legal minimum, have unlawful deductions, or are terminated improperly.
- Rules govern the proper notice period or termination pay in lieu for wrongful termination. This depends on the specific circumstances of the termination.
- Minimum-wage workers are entitled to vacation time and vacation pay based on years of service. Any accrued vacation must be paid out when employment ends.
- Violating employers may face orders to pay compensation, fines up to $10,000 for individuals and $50,000 for corporations, and prosecution under the law.
Key Takeaways on Minimum Wage in Northwest Territories
The minimum wage in the Northwest Territories is $16.05 per hour, among the highest rates in Canada. Driven by high living costs, especially in remote communities, the NWT minimum wage aims to provide fair compensation and economic security.
Annual indexing based on inflation and average wages ensures regular increases while giving predictability to employers. Workers should understand their rights and protections around minimum wage, overtime, vacation, termination, and recourse options. Overall, the NWT strikes an effective balance with its minimum wage policies.
In Canada, the federal government sets a national minimum wage that applies to workers who fall under federal labor regulations.
Additionally, each province and territory in Canada has the autonomy to set its own minimum wage rate that applies to provincially-regulated workers. Provincial/territorial minimum wages may be higher or lower than the federal rate based on local economic conditions, business factors, and cost of living. Currently, minimum wage in Canada vary across the different provinces and territories.
- Minimum Wage in Newfoundland and Labrador
- Minimum Wage in New Brunswick
- Minimum Wage in Manitoba
- Minimum Wage in British Columbia
- Minimum Wage in Alberta
FAQs related to minimum wage in the Northwest Territories
What is the minimum wage in the Northwest Territories?
The current minimum wage in the Northwest Territories is $16.05 per hour as of September 1, 2023.
How is minimum wage determined in the NWT?
Minimum wage is determined by a formula that accounts for changes in the Consumer Price Index (CPI) and Average Hourly Wage (AHW) and is adjusted annually on September 1st.
When was the last increase to minimum wage in the NWT?
The most recent increase was in September 2023, when minimum wage went from $15.20 to $16.05 per hour, an increase of 5.3%.
What are the rules for overtime pay in the Northwest Territories?
Overtime pay of 1.5 times the regular wage rate is required in the NWT for any hours worked over 8 hours in a day or 40 hours in a week.
How many paid holidays do minimum wage workers get in the NWT?
There are 11 paid statutory holidays that minimum wage workers qualify for if they meet eligibility requirements.
Can employers make deductions from minimum wage workers' paychecks in the NWT?
Yes, employers can make limited deductions for meals, lodging, and accommodation provided it does not reduce the wage below the minimum rate.
Is there a training wage for youth in the Northwest Territories?
No, there is no special training wage for youth under 18 in the NWT - they must be paid the full minimum wage.
Does minimum wage increase if you live in a remote area of the NWT?
No, the same minimum wage applies across the territory, but it is set higher to account for the increased cost of living in remote areas.
Where can minimum wage workers report violations in the Northwest Territories?
Violations can be reported to the Employment Standards section of the NWT Department of Education, Culture and Employment.
Why is minimum wage higher in NWT than many other parts of Canada?
The high cost of living, especially in remote areas, means a higher wage is required to provide a decent standard of living in the territory.
Article Sources
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Minimum Wage in Northwest Territories: 2024 Updates
Ben Nguyen