Work Expense Reimbursement and Employment Statements

Summary#

The final rule Regulations Amending Certain Regulations Made Under the Canada Labour Code: SOR/2023-79 sets out what counts as a reimbursable work-related expense and what must be in a written employment statement. It also updates the enforcement rules so employers can face penalties for not following the new requirements. The item was published in the Canada Gazette, Part II on May 10, 2023.

What it does#

• Adds a required list of items that must be given to employees in a written employment statement under the Canada Labour Standards Regulations. That list includes:
  • names of the parties, job title and duties, and ordinary place of work;
  • start date, term of employment, and any probationary period;
  • required qualifications and training;
  • hours of work, how hours are calculated, and overtime rules;
  • rate of pay, overtime rate, pay frequency, and mandatory deductions;
  • how employees can claim reimbursement for reasonable work-related expenses.
• Defines factors employers and inspectors should use to decide whether an expense is a “work-related expense” and whether it is “reasonable.” These factors cover things like whether the expense was needed to do the job, whether the employer required it, and whether receipts are provided.
• Sets a default time limit for employers to reimburse employees: employers must pay any amount owed within 30 days after an employee files a claim, unless a different time is agreed in writing.
• Updates the Administrative Monetary Penalties (Canada Labour Code) Regulations to add and classify new violations tied to these rules, so fines can be issued for non-compliance.
• Says the regulations come into force when related parts of the Budget Implementation Act, 2018, No. 2 come into force. If they are registered after that, they will come into force 60 days after publication in the Canada Gazette, Part II.

Who's affected#

• Employees and employers covered by Part III of the Canada Labour Code. That includes many federally regulated private-sector workplaces such as airlines, railways, trucking and bus companies, ports, telecommunications and broadcasting companies, banks, and postal and courier services.
• The rule is likely to matter most to the road transportation (trucking) and air transportation sectors, where work-related expenses (fuel, vehicle costs, uniforms, dry-cleaning, etc.) are more common.
• Small employers, especially very small trucking firms, may feel the cost and administrative impacts more than larger firms.
• Unionized workplaces remain governed by collective agreements; if a collective agreement already deals with expense reimbursement, that agreement continues to apply.

Why it matters#

• Workers gain a clearer, quicker way to recover reasonable work-related expenses without having to sue their employer. The government expects employers to reimburse claims within 30 days when no other written agreement exists.
• Workers will get a written statement early in employment that spells out key terms (hours, pay, duties, place of work). That makes job terms clearer for new, temporary, or vulnerable workers.
• Employers get clearer rules about what counts as reimbursable and how to handle claims. That should reduce disputes but may add some administrative and cash costs. The government’s analysis estimates an annualized employer cost for reimbursements of about $90,833, and annualized costs for producing statements of about $258,036; total annualized costs were estimated at $456,042 against total annualized benefits of $633,978, for a net annualized benefit of about $177,936 (these are government estimates).
• The changes also make non‑compliance enforceable through administrative monetary penalties under the Administrative Monetary Penalties (Canada Labour Code) Regulations, so employers who don’t follow the rules may face fines.