Equal Pay Rules for Non‑Standard Workers

Summary#

This is a proposed regulatory package published in the Canada Gazette on February 22, 2025 that would add rules to help put into effect new equal-pay and temporary-help-agency protections in the Canada Labour Code. The proposals would add definitions, new record-keeping duties for employers, and make some failures subject to administrative penalties; the government estimates total discounted costs of $6,115,860, monetized benefits of $1,428,172, and a net monetized cost of $4,687,688 over 10 years.

What it does#

• Adds or clarifies terms in the Canada Labour Standards Regulations so it is clearer who counts as full‑time, part‑time, permanent or temporary, and what an “industrial establishment” is for equal‑pay comparisons.
• Explains how to decide which work location an employee is attached to (including rules for remote workers and for transportation workers with home terminals).
• Requires “apples‑to‑apples” wage comparisons: only the same type of pay (hourly, mileage, piece rate, commission, etc.) should be compared when checking for unequal pay.
• Lists additional legitimate reasons employers can pay different rates (exceptions), for example:
  • keeping a higher pay rate after a demotion (“red‑circling”);
  • increased pay to address a labour shortage;
  • geographic pay differences (e.g. northern bonuses) or travel status pay;
  • pay for employees in training or development programs.
• Adds new record‑keeping rules. Employers must keep records of:
  • any written request from an employee asking for a wage review and the employer’s written response;
  • any system relied on to justify different pay;
  • for federally regulated temporary help agencies, a record of each client assignment and its dates.
• Updates the Administrative Monetary Penalties (Canada Labour Code) Regulations to make many failures (for example, paying an employee less because of employment status, failing to do the required wage review, charging prohibited fees) subject to fines. Those failures are sorted into different seriousness categories in the AMPs schedule.
• Reinforces the review process in the Code: employees can ask their employer to review a pay rate, and employers must respond in writing (the Code sets the review time frame; the regulations support enforcement).
• This is a proposal (Part I notice). The government asked for public comments for 30 days after publication and anticipates bringing the measures into force in late 2025 or early 2026 (the exact date is to be set).

Who's affected#

• Employers and employees in federally regulated sectors covered by Part III of the Canada Labour Code — for example banks, air/rail/maritime/road transport, telecommunications and broadcasting, and other federal undertakings.
• Employees working part‑time, on fixed‑term or seasonal contracts, casual workers, and those placed by temporary help agencies who perform the same work as permanent or full‑time staff.
• Federally regulated temporary help agencies, though the government says the number of such agencies under federal jurisdiction is currently small and unclear.
• Human resources and payroll teams (who will handle reviews, record keeping and possible pay adjustments) and the federal Labour Program (which will handle complaints and enforcement).
• Small businesses in the federal jurisdiction — the Regulatory Impact Analysis estimates about 19,250 small businesses could be affected by administrative and compliance costs (as modeled).

Why it matters#

• Gives clearer rules for equal pay when two workers do substantially the same work but have different employment status (e.g., part‑time vs full‑time, temporary vs permanent). That means some lower‑paid non‑standard employees could get higher pay if a review finds unequal treatment.
• Sets out practical details employers and inspectors need to compare wages fairly (same type of pay, where employees are attached, what exceptions apply). That reduces confusion about who can be compared and when.
• Imposes new record‑keeping and administrative duties on employers and allows administrative penalties where employers fail to follow the rules. The government estimates the rules will cost employers and the federal government $6,115,860 (present value) over 10 years, while the directly monetized wage gains to employees are estimated at $1,428,172.
• Affects groups that are over‑represented in precarious work (e.g., some women, younger workers, recent immigrants) by aiming to reduce wage differences tied to employment status. The analysis notes many benefits (better morale, lower turnover, reduced discrimination) that are hard to put into dollars.
• Some uncertainty remains: the actual number of affected temporary help agencies under federal jurisdiction is unclear, and many qualitative benefits were not monetized. The measures are proposed and not yet in force; the public comment period and final regulatory decisions could change details.