Equal Pay and Temporary-Help Rules

Summary#

This notice (published February 22, 2025) proposes regulations to help put into effect the new equal-pay and temporary-help-agency rules added to the Canada Labour Code by the Budget Implementation Act, 2018, No. 2. The rules would add definitions, set out when two workers can be compared for pay, create some specific exceptions, require new record-keeping and posting, and make these requirements enforceable through the Administrative Monetary Penalties (Canada Labour Code) Regulations and changes to the Canada Labour Standards Regulations.

What it does#

• Defines key terms for the equal-pay rules, including industrial establishment, employment status, full-time, part-time, permanent and temporary.
• Says how to decide which workplace (industrial establishment) an employee “belongs to” when an employer has multiple sites. Rules cover normal offices, transportation workers (home terminal/base/port) and fully remote workers.
• Says wages may only be compared if they use the same kind of rate (for example, hourly, mileage, piece rate, per load, or commission).
• Adds specific exceptions that allow pay differences, including:
  • keeping an employee’s higher pay after a demotion or reclassification ("red‑circling"),
  • higher pay to deal with a labour shortage,
  • geographic or northern-pay differences,
  • different pay for employees on travel status,
  • different pay for employees in training or development programs.
• Adds new record-keeping rules. Employers must keep records of any system used to justify pay differences, any employee request for a pay review and the employer’s written response, and (for temporary-help agencies) records of client assignments and dates.
• Updates the required workplace posting (Schedule II) to include the new equal-treatment and temporary-help-agency rights.
• Lists the new or changed violations that can attract administrative fines, and groups them by seriousness (type A, B or C) in the Administrative Monetary Penalties (Canada Labour Code) Regulations.
• Opens a public comment period of 30 days after publication.

Who's affected#

• Employers and workers covered by Part III of the Canada Labour Code — that is, federally regulated workplaces such as banks, airlines and airports, rail and road transport, shipping and ports, telecommunications and broadcasting, some resource industries, and federal Crown corporations.
• Federally regulated temporary-help agencies and the people they place, though the notice says it is unclear how many temporary-help agencies are currently federally regulated.
• Small federally regulated businesses: the analysis estimates 19,250 small businesses could be affected.
• The federal Labour Program and its inspectors, who will handle reviews, complaints and enforcement.

If it’s unclear who is covered in a particular case — for example whether a particular temporary-help agency falls under federal jurisdiction — the proposed rules would not change that uncertainty.

Why it matters#

• For some part-time, temporary or “perma‑temp” workers, the rules could mean higher pay when they do the same work, under similar conditions, as full-time or permanent colleagues. The government’s estimate of monetized benefits is $1,428,172 (present value).
• Employers face new compliance and record-keeping costs. The regulatory analysis estimates total present-value costs of $6,115,860, giving a net monetized cost of $4,687,688 (present value). Those figures exclude many non‑monetized benefits such as reduced discrimination or improved morale.
• The proposal introduces a formal review process: workers can ask their employer to review pay, and employers must respond in writing. The analysis assumes employee request rates of 0.2% in the first year and 0.1% in later years, with an assumed approval rate of 15%. Under those assumptions the department estimates 187,549 workers would be in scope in year one, with 375 review requests and 56 successful adjustments that year (subsequent-year estimates: 196,392 in scope, 196 requests, 29 adjustments).
• The changes make non‑compliance subject to administrative penalties. That gives the Labour Program more tools to enforce equal‑pay requirements and the bans on agency fees to workers.
• There will be a trade-off in practice: some workers may gain pay and legal clarity, while employers (including many small firms) will have new administrative burdens and potential payroll costs. The notice highlights likely benefits for groups over‑represented in precarious work (for example, some women, young people and immigrants).