What is Ontario's homeworkers' minimum wage, and why is it higher than general minimum wage?

A man sits in front of three computer monitors at a home office in this undated stock image. (Olia Danilevich/CTV News)

The Ford government is raising Ontario's minimum wage by 65 cents on Oct. 1.

Come Tuesday, people making minimum wage in the province will see their hourly wage rise from the current $16.55 per hour to $17.20 per hour.

Students under 18-years-old will see their minimum wage go from $15.60 per hour to $16.20 per hour.

But there is another category seeing a jump that many people may not know about. It's called homeworkers' minimum wage and it will go from $18.20 per hour to $18.90 per hour. That's $1.70 more per hour than the general minimum wage.

"My initial reaction was confusion. I didn't quite understand why," said Brad Davis, an associate professor with the Lazaridis School of Business & Economics at Wilfrid Laurier University.

Davis admits, like many others, he hadn’t heard of it despite the wage being in place in Ontario since 1994.

The Ministry of Labour, Immigration, Training and Skills Development defines homeworkers simply as "employees who perform paid work from their own homes." For example, that could be anyone who sews clothes for a manufacturer or develops software for a tech company.

Still, having a separate minimum wage category for this perplexes Davis, he says.

"I mean, typically we provide greater compensation for one of two reasons. One is because the job may entail more expenses than normal. So if you're working in downtown Toronto, you're going to get a higher salary because it's just more expensive to work there," said Davis. "The other thing you do is you want to incentivize, to attract people to the position."

In an email to CTV News Kitchener, a spokesperson for the Ministry of Labour explained why a higher minimum wage was brought in for homeworkers.

"The special minimum wage for homeworkers was introduced … to address the unique overhead costs that homeworkers incur, such as heating, electricity, and property taxes," the email reads. "These costs are not typically covered by employees working at a traditional workplace, which is why the homeworkers' minimum wage is set higher than the general and student minimum wages. This higher rate ensures fair compensation for the additional expenses related to their employment.

Davis says he's not fully on board with that reasoning.

"A lot of those are what we could call sunk cost, meaning you have a home anyway. You pay property taxes anyway. You have heating bills anyway. Those are not new expenses because now you suddenly are working at home," Davis said.

He also mentions the tax breaks when declaring your home as an office space and the costs saved by not commuting to work.

But even with homeworkers having a higher minimum wage, Davis suggests it's not enough to push more people to work from home than there already are.

"Minimum wage is a little bit irrelevant in a lot of workplaces where employers have to pay well above minimum wage if they want to attract and retain people," he said.