Regulations Amending Certain Regulations Made Under the Canada Labour Code (Equal Treatment and Temporary Help Agencies)

Overview

Canada is introducing new federal regulations, titled "Regulations Amending Certain Regulations Made Under the Canada Labour Code (Equal Treatment and Temporary Help Agencies)," aimed at ensuring equal treatment and compensation for employees in federally regulated workplaces. These regulations specifically target precarious work by prohibiting differences in wage rates based on employment status and by protecting employees of temporary help agencies from unfair practices.

The regulatory initiative supports amendments to Part III of the Canada Labour Code (CLC) that were introduced by the Budget Implementation Act, 2018, No. 2 (BIA 2018), which received Royal Assent in December 2018. The overarching goal is to foster fairness in the workplace and address issues related to precarious employment.

Scope and Coverage

These regulations apply to federally regulated workplaces across Canada, which include sectors such as banking, telecommunications, interprovincial transportation, and federal Crown corporations. The provisions are designed to cover a broad range of employees, including full-time, part-time, casual, term, and temporary help agency workers.

Specifically, the equal treatment requirements apply when employees work in the same industrial establishment, perform substantially the same kind of work, require substantially the same skill, effort, and responsibility, and work under similar working conditions. The regulations also directly apply to employers operating as temporary help agencies and their employees who are assigned to work in clients' industrial establishments.

Key Obligations

• Equal Pay for Equal Work: Employers are prohibited from paying an employee a lower rate of wages than another employee due to a difference in their employment status (e.g., full-time, part-time, permanent, temporary, seasonal, casual, or irregular) when they perform substantially the same work under similar conditions.
• Temporary Help Agency (THA) Wage Parity: Temporary help agencies are prohibited from paying their employees less than the client's employees who perform substantially the same kind of work under similar conditions.
• Prohibition on Certain THA Fees: THAs are prohibited from charging fees to individuals for becoming an employee, for assigning or attempting to assign work, or for job preparation services. They are also prohibited from charging a fee to a client for establishing an employment relationship with an employee if it occurs more than six months after the start of the employee's first assignment.
• Worker Mobility Protection: THAs are prohibited from preventing or attempting to prevent an employee from establishing an employment relationship with a client.
• No Wage Reduction: Employers are explicitly prohibited from reducing an employee's rate of wages to comply with these new requirements.
• Employee Right to Wage Review: Employees have the right to request a review of their wages if they believe their current rate does not comply with the equal treatment provisions.
• Employer Response to Review: Upon receiving a wage review request, employers must conduct the review within 90 days and provide a written response. This response must either confirm an increase to comply with the Code or provide reasons explaining why the current rate is compliant. If an increase is made, it will apply retroactively to the date the request was made.
• Additional Record-Keeping: New record-keeping requirements will be added to the Canada Labour Standards Regulations (CLSR) to facilitate investigations and ensure compliance. Employers are generally required to keep records for 36 months after the date of termination of employment.
• Workplace Notices: The new provisions pertaining to equal treatment and temporary help agencies will be added to the list of labour standards that employers are required to post in their establishments, along with an updated link to a website containing additional information.
• Permissible Exceptions: Differences in wage rates are allowed if they are based on established systems such as seniority, merit, or the quantity or quality of each employee's production. Other prescribed criteria may include addressing hiring difficulties during labour shortages, accommodating geographical differences (e.g., northern bonuses), compensating employees on travel status, and supporting employee training and development programs.

Pay Transparency Specifics

This federal regulation primarily focuses on ensuring equal pay for equal work and wage parity between different employment statuses and for temporary help agency workers. It clarifies that for comparison purposes, only the same types of wages should be compared (e.g., hourly wage to hourly wage, commission rate to commission rate). While the regulation introduces a mechanism for employees to request a review of their wages, it does not explicitly mandate salary range disclosures in job postings or prohibit pay history inquiries at the federal level. These types of pay transparency measures are more commonly found in specific provincial legislation, such as in Ontario.

Reporting and Pay Gap Analysis

The regulations will introduce additional record-keeping requirements under the Canada Labour Standards Regulations (CLSR). These records are intended to enable the Labour Program to investigate complaints effectively and to ensure employer and employee compliance with the new equal treatment and temporary help agency provisions. However, the available information does not specify requirements for regular, proactive reporting of pay gap analyses or a defined reporting cadence for employers under this particular regulation. The focus appears to be on facilitating complaint-driven investigations.

Enforcement and Penalties

To support the enforcement of these new provisions, amendments are being made to the Administrative Monetary Penalties (Canada Labour Code) Regulations (AMPs Regulations). The Labour Program is also reviewing the AMP regulations more broadly, including plans to consult on increasing penalties for wage theft, suggesting that current penalty levels may be deemed insufficient to deter violations.

Employers are prohibited from taking reprisals, such as intimidation, dismissal, or discipline, against employees who exercise their right to request a wage review or make inquiries about their rights under these regulations. If an employer is found to be non-compliant and a wage increase is required, the increase will apply retroactively to the day the employee's request for review was made.

Implementation Timeline

The foundational amendments to the Canada Labour Code were introduced by the Budget Implementation Act, 2018, No. 2, which received Royal Assent on December 13, 2018. However, these provisions are not yet in force. Draft regulations were pre-published in Part I of the Canada Gazette in February 2025, initiating a public consultation period.

The final regulations are projected to be published in Part II of the Canada Gazette in spring 2026. The amendments to the Code are expected to be proclaimed by Order in Council in late 2025 or early 2026, with some sources indicating an expected in-force date in the early months of 2026 or in the next few months. The specific effective date remains to be determined by an Order in Council.

Practical Implications for Employers

Federally regulated employers should proactively prepare for these upcoming changes. Key actions include:

• Review Compensation Structures: Conduct a thorough review of existing compensation structures and policies to identify and address any potential discrepancies based on employment status.
• Define Comparator Roles: Clearly define comparator roles within the organization to ensure that "substantially the same kind of work" and "similar working conditions" can be objectively assessed.
• Justify Wage Differentials: Ensure that any existing wage differentials are properly supported by permissible criteria such as seniority, merit, or productivity, and are not based on employment status.
• Strengthen Internal Wage Review Processes: Develop or refine internal processes for handling employee wage review requests to ensure they are robust, transparent, and capable of withstanding regulatory scrutiny.
• Adjust Payroll Systems: Make necessary adjustments to payroll systems to accommodate the federal equal pay requirements.
• Enhance Record-Keeping: Implement new systems or strengthen existing ones to meet the additional record-keeping requirements, ensuring all relevant wage and employment status data is maintained for the prescribed period.
• Mandatory Training: Provide mandatory training for HR staff and hiring managers on the new equal treatment rules, permissible exceptions, and anti-reprisal provisions to ensure consistent application and compliance.
• Proactive Policy Updates: Update internal policies and procedures to reflect the new regulations, particularly concerning wage practices and employee rights to wage review.

Sources and References

Source (linked)	Type
Labour Program Forward Regulatory Plan: 2026 to 2028 - Canada.ca	Official Government Source / Regulatory Plan
Canada Labour Code (RSC, 1985, c. L-2) - Justice Laws Website	Official Government Source / Legislation