Introduction
The purpose of this report is to determine the cost per hour difference between a minimum wage employee working 40 hours per week for 52 weeks located in Cornwall, Ontario and Pittsburgh Pennsylvania. The result of this report will be used for the establishment of a new distribution centre. All the elements of employee’s salary in the city of Cornwall and Pittsburgh will be covered in this report. The report will make the use of exchange rate for comparing the difference in wages in two countries now and after the completion of 5 yrs.
An employee working anywhere across the globe, the employer is required to offer certain benefits to the employee for his economic and social welfare. The report will be covering all those
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The currency exchange rate has to be considered when the decision is based on cost figures of from two countries with different currencies. The Consumer Price Index (CPI) used to calculate inflation rate in a country has to be used in forecasting the future minimum wages as minimum wages are in proportion with the inflation rate.
Discussion and Analysis
Structure of Payroll in Cornwall, Ontario
1. Minimum Wage
The minimum wage rate in Ontario is $11.60 per hour for 2017 and the minimum wage rates are subject to annual indexation based on the inflation rate as per the Government of Ontario website.
Since, Inflation rate is measured through Consumer price index so, by taking the CPI data of 10 years we have forecasted the CPI of 2022. As per the CPI the forecasted minimum wage of 2022 is estimated at $12.51 per hour.
2. Health care costs
The employer health tax (EHT) is a payroll tax on remuneration paid to former employees and employees.
The EHT rate varies from 0.98% to 1.95% of the wages depending upon the total payroll of the Ontario employer.
3. Employment Insurance
The federal government directs the employer to deduct the employment insurance (EI) premium out of the employee’s insurable earnings on a condition that the employee must be in insurable employment.
The employer also has to make the contribution of 1.4 times the amount deducted from
Employers are able to get a tax break for offering health coverage to their employees
The working conditions, wage rates, working hours and gender issues should be taken into account.
The first federal minimum wage mandated by the government was in 1938. When the first minimum wage became law in 1938, it was set at just 25 cents. Today, the federal minimum wage mandated by the government is set at $7.25 an hour. “Many states have their own set minimum wages, which are currently above $7.25 per hour already. Currently, 29 states and the District of Columbia (D.C.) have minimum wages above the federal minimum wage of $7.25 per hour. D.C. 's new wage of $10.50 an hour makes it the first jurisdiction to cross the $10 threshold among the states,” (Halvorson). The last time that the federal minimum wage mandated by the government was changed was over 8 years ago. “The last time Congress voted to raise the minimum wage to its current rate of $7.25 an hour was on May 24, 2007. Since then, the cost of life 's essentials has shot up. Groceries cost 20% more, a gallon of gas costs 25% more, and average tuition at a community college increased 44%. But the minimum wage remains at
Now the question is what is minimum wage. “An amount of money that is the least amount of money per hour that workers must be paid according to the law” (Merriam Webster’s learner’s dictionary). According to United States department of Labor “The federal minimum wage for covered nonexempt employees is $ 7.25 per hour effectively July 24, 2009” (Department of labor/ Minimum wage).
The minimum wage is intended to protect workers and fight poverty. In the United States, the federal government sets the minimum wage at $7.25 per hour although many states set higher minimums. There is currently a movement to raise the federal minimum wage to $15 per hour. This movement is called the “Living Wage Movement” (Living Wage Resource Center, 2016) or the “Fight for $15” (Fortunato, 2016) and purports to address the problem of poverty in America.
"According to a 2014 Congressional Budget Office report, increasing the minimum wage to $9 would lift 300,000 people out of poverty, and an increase to $10.10 would lift 900,000 people out of poverty.” Currently the federal minimum wage is $7.25. The government should raise the minimum wage to $9.25 per hour. We need to raise the minimum wage to the point where the lowest paid worker can afford their basic needs. Raising the minimum wage would strengthen the workforce and the economy.
As John Wihbey states in his article “Minimum Wage: Updated research roundup on the effects of increasing pay” if the Fair Labor Standards Act were to have increased at the same rate as inflation the minimum wage would be around $10.00 per hour. This article is once again stating that the minimum wage should be increased. Yes, I do find that increasing by nearly $3.00 per hour is a little outrageous but, I do feel that the minimum wage could see a slight increase to around $8.00 or $9.00 per
For many years, there has been an ongoing and strong debate in the United States on whether or not minimum wage should be raised from $7.25 an hour to over $10.00 an hour. Minimum wage is the lowest amount a company or employer can pay their employees. Many argue that the benefits of raising minimum wage surpass the negatives, yet many also disagree. But as a whole, the benefits of a higher minimum wage clearly outweigh the costs that come with it. Minimum wage should be raised because it would increase economic activity, reduce poverty levels, and allow for less government spending.
The Additional Medicare Tax requires employers to withhold .9% of wages in excess of $200,000. These funds help fund
A. Since July 24, 2009, the federal minimum wage has been $7.25, but as of 2016 the living wage – the hourly rate a single person must earn to support themselves or their family – is quite a bit higher.
According to Daniel Tencer’s article “Too-Fast Minimum Wage Hike Will Cost Ontario 90,000 Jobs: TD Bank” (2017) on huffpost website, thousands of people might lose their jobs by 2020 as the result of today’s minimum wage hike. Some economists claim that it ‘can potentially generate more benefits to society than costs in terms of any resulting job loss’ (2017) while others concern about short period of time allotted on making these changes. As for minimum wage in the coming years, it will be $14 per hour in January 2018 and $15 in 2019. The author also stated that not only Ontario is planning to raise minimum wage, but also Alberta will increase it to $15 per hour. Furthermore, even though government says that there will be a ‘positive household
The Medicare and Medicaid EHR Incentive Program will provide incentive payments to eligible professionals and hospitals that exhibit significant use of certified EHR technology. Participation can begin as early as 2011. Eligible professionals and hospitals can receive up to $44,000 over five years under the Medicare EHR Incentive Program. There is an additional incentive for eligible professionals and hospitals that provide services in a Health Professional Shortage Area (HSPA). In order to receive the maximum incentive payment, Medicare eligible professionals must begin participation by 2012. Health care professionals and hospitals that do not meet the requirements by 2015 will be subject to a decrease in reimbursement (CMS, 2011).
In the 2014 State of the Union address, President Obama called on Congress to raise the national minimum wage from $7.25 to $10.10 an hour, and soon after signed an Executive Order to raise the minimum wage to $10.10 for the individuals working on new federal service contracts. An increase in the minimum wage has been a topic of
In United States the minimum wage is been set by a network of federal, state, and local laws. Workers are generally been paid no less than the statutory minimum wage as specified by the government. As of July 2009, the federal government officially ordered a nationwide minimum wage level of $7.25 per hour. The federal minimum wage was at its highest at 10 dollars in 1968, as measured in 2014. Since then there were controversial debates over the
Challenges for the employer and the situation include the issues related to government taxes such as Medicare and Social Security. In addition, the employer is bound to pay reasonable benefits to all of its employees equally. If the utility does not do this, and it is determined that Karen is an employee of the utility, and Karen is a legitimate case against the utility to recover the lost benefits. To rectify this situation, the utility should clarify exactly what Karen’s individual situation is, and hopefully with the help of a tax advisor. The advisor may suggest that Karen's work responsibilities be clearly delineated and that she be afforded the requisite benefits. Lastly, all necessary taxes, including payroll amounts for charges such as Medicare and Social Security need to be paid in full.