Employers in Canada don’t have to give employees an annual pay raise just because they have worked for the company for another year.
A raise can become legally required if your pay falls below the applicable minimum wage, your employment agreement guarantees an increase, or withholding the raise violates employment or human rights laws.
Samfiru Tumarkin LLP helps non-unionized employees in Ontario, Alberta and British Columbia understand their compensation rights and respond to improper changes to their pay.
⚠️ Offered a raise in exchange for signing a new contract?
Don’t focus only on the new salary. The agreement could also change your severance rights or other important terms of employment. Have the entire contract reviewed before signing.
On This Page:
- 1. Are Raises Required?
- 2. Minimum Wage
- 3. Annual Raises
- 4. Promised Raises
- 5. Different Raises
- 6. Pay Cuts
- 7. Common Questions
Are Pay Raises Required in Canada?
No law requires every employee in Canada to receive an annual raise. Employers can decide whether to provide discretionary salary increases based on performance, seniority, responsibilities, market conditions or company policy.
Your employer may have to increase your pay when:
- Your current wage falls below the applicable minimum wage
- Your employment contract guarantees a raise
- An enforceable compensation plan entitles you to an increase
- A compensation decision violates employment standards, pay equity or human rights protections
Employment standards differ by province. Samfiru Tumarkin LLP represents non-unionized employees in Ontario, Alberta and British Columbia.
| Province | Annual raise required? |
|---|---|
| Ontario | No. Read our complete guide to pay raises in Ontario. |
| Alberta | No. A raise is required when another legal or contractual entitlement applies. |
| British Columbia | No. A raise is required when another legal or contractual entitlement applies. |
Do You Get a Raise When Minimum Wage Goes Up?
If a new minimum wage would put your current rate below the legal minimum, your employer must increase your pay to at least the new rate.
If you already earn more than minimum wage, your employer doesn’t have to increase your pay by the same amount or percentage.
💡 Example: If minimum wage increases by 50 cents, an employee already earning several dollars above minimum wage doesn’t automatically receive an extra 50 cents per hour.
Minimum wage rules and rates are set provincially for most employees. Ontario employees can read our guide to minimum wage in Ontario.
Should You Get a Pay Raise Every Year?
You don’t have a legal right to a raise after six months, one year or any other set period of employment.
Many employers review compensation annually, but a salary review doesn’t guarantee an increase.
Raises can be tied to:
- performance
- a promotion
- new responsibilities
- seniority
- market adjustments
- a company-wide compensation review
What is a reasonable annual raise?
There is no legally required percentage. The size of a discretionary raise depends on the job, employer, industry, performance and labour market.
Do employers have to give cost-of-living raises?
No. Inflation or a higher cost of living doesn’t automatically require an employer to increase your salary.
What If Your Employer Promised You a Raise?
A guaranteed raise in an employment agreement is different from being told that your salary will be reviewed.
If your contract states that your salary will increase by a specific amount or on a specific date, the employer may be required to honour that agreement.
A promise that you will be “considered” for a raise or have an “annual salary review” doesn’t guarantee that your pay will increase.
⚠️ Asked to sign something before getting the raise?
A new employment contract can contain more than a salary change. It could restrict the severance you receive if you’re fired in the future. Before you sign, always check first.
Can Your Coworker Get a Raise While You Don’t?
Yes. Employers don’t have to give every employee the same raise.
Differences in compensation can be based on legitimate factors such as performance, experience, seniority, responsibilities or results.
But an employer can’t make compensation decisions that violate employment standards or discriminate against an employee because of a protected characteristic such as disability, sex, race, age or another protected ground.
Learn more about workplace discrimination and employee rights.
Can you get a promotion without a raise?
Yes. A new title or promotion doesn’t automatically create a legal right to higher pay.
However, major changes to your duties or position can affect your employment rights, particularly when they are imposed without your agreement.
A Denied Raise Is Different From a Pay Cut
Your employer keeping your existing salary unchanged is very different from reducing compensation you already receive.
A major reduction to your salary, hourly wage, commission, bonus or other compensation can amount to constructive dismissal.
If that happens, you could be entitled to treat your employment as terminated and pursue a full severance package.
⚠️ Your employer cut your pay?
Don’t resign or accept the reduction before getting legal advice. How you respond to the change can affect your rights.
Pay Raises in Canada: FAQs
Are annual raises mandatory in Canada?
No. Employees don’t automatically receive a legal right to a salary increase each year.
Do you automatically get a raise after one year?
No. One year of service doesn’t trigger an automatic pay increase unless your employment agreement or another enforceable term provides for one.
Can you ask for a raise?
Yes. You can ask your employer to review your compensation and explain how your responsibilities, performance, experience or market value have changed.
Does a performance review mean you get a raise?
No. An employer can review your salary without increasing it.
Can an employer take back a promised raise?
It depends on what was promised and whether the increase became part of your employment agreement. A discretionary proposal is different from compensation your employer has contractually committed to pay.
Can your employer freeze your salary?
Yes. Your employer can keep your salary at its current level as long as the arrangement complies with minimum employment standards, your contract and other applicable laws.
What if you’re unionized?
Your collective agreement governs negotiated wage increases and salary grids. Contact your union about your pay rights. Samfiru Tumarkin LLP’s employment law team does not assist with unionized workplace disputes.
Concerned About Your Pay?
Not receiving a discretionary raise is different from having your existing compensation reduced or being denied money your employer agreed to pay.
If your employer cut your compensation, broke a pay agreement or asked you to sign a new contract for a raise, get advice before agreeing to anything.
The employment lawyers at Samfiru Tumarkin LLP help non-unionized employees across Ontario, Alberta and British Columbia understand their rights and pursue the compensation they are owed.
Before you sign, always check first.
➡️ Get Legal Advice or call 1-855-821-5900.