Equal Pay and Temporary Help Rules

Summary#

These are proposed changes, published on February 22, 2025, to the rules that support new equal‑pay and temporary‑help‑agency rules in the Canada Labour Code. The proposals (to amend the Canada Labour Standards Regulations and the Administrative Monetary Penalties (Canada Labour Code) Regulations) mainly define key terms, add a few permitted exceptions to pay‑comparisons, create new record‑keeping duties, and make some new failures punishable by administrative fines.

What it does#

• Defines who can be compared for equal‑pay purposes by spelling out what “industrial establishment” and “employment status” mean (including what counts as full‑time and part‑time).
• Clarifies how wages must be compared — only the same type of pay (e.g. hourly, mileage, piece rate, commission) can be used for an “apples‑to‑apples” comparison.
• Adds specific, limited exceptions that can justify pay differences, for example:
  • keeping a higher previous wage after a reclassification or demotion (“red‑circling”);
  • higher pay to deal with labour shortages;
  • geographic differentials (e.g. northern bonuses) and travel‑status pay;
  • pay differences for employees in training or development programs.
• Adds matching provisions for temporary help agencies, including prohibitions on charging fees to workers for placement and a ban on paying agency workers less than a client’s employees when they do the same work.
• Creates a formal review step: an employee can ask their employer to review their wage, and the employer must respond in writing (the underlying Code requires a response within 90 days).
• Adds new record‑keeping rules for employers (records of review requests and justifications, client assignment records for temp agencies, etc.).
• Updates what employers must post in workplaces and lists the new violations that can attract administrative monetary penalties (AMPS), with violations classified into types A/B/C depending on seriousness.
• Anticipated timing: these regulations would come into force when the related Canada Labour Code amendments do — expected in late 2025 or early 2026 (exact date will be set by order).

Who's affected#

• Federally regulated employers and employees — that means workplaces covered by Part III of the Canada Labour Code, such as parts of banking, telecommunications, rail, air, marine, long‑distance trucking, some federal Crown corporations and similar undertakings.
• Temporary help agencies that operate under federal jurisdiction (the government says few appear to be federally regulated now, so exact impacts on agencies are uncertain).
• Human‑resources and payroll staff: extra work to keep records, run reviews, and update pay systems.
• Employees most likely to notice: part‑time, temporary, casual, seasonal and “perma‑temp” workers who do the same work as full‑time or permanent staff.
• Small businesses were specifically modelled; the analysis estimates 19,250 small businesses could be affected.
• The federal Labour Program (in Employment and Social Development) will handle complaints, investigations and guidance materials.

Why it matters#

• Workers doing the same job could use a clearer, formal route to ask for equal pay. That could raise wages for some part‑time and temporary workers.
• The government’s cost–benefit numbers show the estimated present‑value costs of putting the rules in place are $6,115,860, while the directly monetized wage benefits are estimated at $1,428,172, leaving a net monetized cost of $4,687,688 over a 10‑year period. The proposal says important benefits — like reduced discrimination, higher morale and lower turnover — are hard to quantify and aren’t fully captured by those numbers.
• Employers will face new administrative duties (record keeping, responding to reviews, possible pay adjustments) and could face AMPs if they break the new rules.
• For most Canadians these changes matter mainly if you work in or with a federally regulated workplace, or if you are a temp‑agency worker whose placement and pay are governed federally. The exact scope for temporary help agencies and how many will be caught by federal rules remains unclear.