As Newfoundland and Labrador's minimum wage increases to $10.50 per hour, the Canadian Federation of Independent Business has urged "caution on future adjustments."

Effective Thursday, every Newfoundland and Labrador employer has to pay their employees at least $10.50 an hour.

Government announced in 2013 that it would increase the minimum wage by 25 cents in 2014 and again in 2015. The move came a year after a review panel recommended the increases.

In a statement Thursday, the CFIB said "the provincial government must resist calls for radical steps like those taken by the Alberta government, which has promised to increase minimum wage to $15 per hour by 2018."

Vaughn Hammond, CFIB's Newfoundland and Labrador director of provincial affairs, said that between 2005 and 2010, the minimum wage grew by two thirds.

"Many small businesses struggled to adjust, and had to reduce hours, delay hiring or raise prices as a result," he said.

"Since that time, the provincial government has taken a more measured approach, giving business owners ample time to adjust and plan within their operations."

The CFIB commended the provincial government for supporting more low-income earners.

The federation said improved accessibility to post-secondary education are initiatives that help low-income earners more than a large increase to minimum wage.

Hammond said when the minimum wage goes up, governments tend to take more, while low-income earners keep less.

"If the goal is to ensure low-income earners have more money in their pockets, the answer lies in the tax system rather than minimum wage increases," Hammond said.

According to the Retail Council of Canada, the minimum hourly wage in the Northwest Territories is the highest in the country at $12.50, while New Brunswick is the lowest, at $10.30.