Alberta to Raise and Index Minimum Wage

Summary#

• This bill changes Alberta’s Employment Standards Code to raise and index the minimum wage and to protect workers’ tips.

• It sets a schedule to raise the minimum wage to $18 by 2027 and then ties future increases to inflation. It also says tips belong to employees and limits when employers can handle or share them.

• Key changes:

  • Raises minimum wage to $16/hour on Dec 15, 2025; $17 on Oct 1, 2026; and $18 on Oct 1, 2027.
  • From Oct 1, 2028, adjusts the minimum wage every year based on the Consumer Price Index (inflation), rounded to the nearest 5 cents, and never lowers it.
  • Requires the Minister to publish the upcoming Oct 1 wage by April 1 each year.
  • Defines “tips or other gratuities,” including mandatory service charges customers would reasonably think go to staff.
  • States tips are the employee’s property. Employers cannot keep, deduct, or treat tips as wages, except if required by law or under a valid tip pool.
  • Allows tip pooling only with a written agreement among employees, with clear rules for collection and redistribution. An employer can help administer a pool only with employees’ consent and only if the employer does similar front-line work.
  • Bars the government from setting lower minimum wages based on a worker’s age or high school status (except formal for-credit work placements).

What it means for you#

• Workers (hourly)

  • Your minimum wage will rise to $16 (Dec 15, 2025), $17 (Oct 1, 2026), and $18 (Oct 1, 2027).
  • Starting Oct 1, 2028, your minimum wage will increase automatically with inflation each year. It will not go down in years when inflation falls.
  • The government will announce the next Oct 1 rate by April 1, so you can plan ahead.

• Workers (tipped: servers, bartenders, delivery, salons, hotels, etc.)

  • Your tips are your property. Employers cannot keep or deduct from them or count them as wages, unless required by law (for example, taxes) or under a valid tip pool you agreed to.
  • Mandatory service charges that customers reasonably think go to staff must be treated as tips for employees.
  • If your employer withholds your tips, the amount owed is treated as a debt to you, enforceable like unpaid earnings.

• Tip pooling

  • Any tip pool must be in writing and say how much is pooled, who is included, the time period, and how tips are shared.
  • Employees can choose to let the employer collect and redistribute pooled tips, but only with employees’ agreement.
  • An employer can be part of the pool only if everyone agrees and the employer does a substantial amount of the same customer-facing work as tipped staff.

• Young workers and high school students

  • The government cannot set a lower minimum wage for you based on your age or student status.
  • The only exception is for formal school work placements where you earn course credit or a similar educational benefit.

• Commission-only workers

  • For overtime and general holiday pay calculations, your wage rate is tied to the current minimum wage rate set in law. As the minimum wage rises, these calculated rates rise too.

• Employers

  • Plan for phased-in wage increases in 2025, 2026, and 2027, and annual inflation adjustments from 2028 onward.
  • Review any service charges and tip policies. Charges that customers think benefit staff must go to employees.
  • If you use tip pools, ensure you have written agreements that meet the new rules.
  • You cannot rely on lower youth or student minimum wages (other than specific for-credit placements).

• Timing

  • Tip protections and related definitions take effect when the bill becomes law (Royal Assent).
  • Minimum wage increases, indexing rules, and related calculation references take effect Dec 15, 2025.

Expenses#

No publicly available information.

Proponents' View#

• Boosts pay for low-wage workers and helps them keep up with rising prices by tying wages to inflation.
• Gives predictability to workers and businesses with a clear schedule and annual publication of new rates.
• Protects service staff by making clear that tips and certain service charges belong to employees.
• Creates fairer workplaces by preventing lower minimum wages for young people and most students.
• Reduces disputes over tips by setting simple, written rules for tip pooling and enforcement if tips are withheld.

Opponents' View#

• Raises labour costs for small businesses, which may respond with higher prices, fewer hours, or fewer jobs.
• Automatic inflation indexing could limit flexibility during downturns or in sectors under stress.
• Tip pooling rules and service charge limits may add admin work and reduce funds businesses use for admin or banquet costs.
• Removing lower youth or student wage options could reduce entry-level job opportunities for young workers.
• Compliance and payroll updates will take time and may be harder for small employers with limited HR capacity.