Dylan Snowdon

September 9, 2026

New rules for federally regulated employers are coming into force on October 20, 2026, addressing pay equality and the use of temporary help agencies.

The equal treatment legislation was introduced as part of the 2018 federal budget, but the date of coming into force was delayed until the introduction of supporting regulations under the Canada Labour Code. The regulations that bring the new rules into effect are:

Regulations Amending Certain Regulations Made Under the Canada Labour Code (Equal Treatment and Temporary Help Agencies)
Equal Treatment Interpretation, Policy and Guideline (IPG) – 122

Like the equal treatment provisions of the Pay Equity Act that seeks to address gender-based discrimination, the new equal treatment provisions under the Canada Labour Code focus on employment status rather than gender. Full-time, part-time, and temporary employees are now required to receive the same wage rate when performing substantially the same kind of work. Exceptions to the equal pay rules apply when there is a difference in seniority or where the quality or quantity of work justifies the variation.

Equal Wages

The new rules prohibit employers from paying one employee less than the rate paid to another employee due to a difference in their employment status (i.e.: full-time, part-time, temporary) if:

They work in the same industrial establishment: This is defined as all branches, sections and other divisions of federal works, undertakings and businesses that are in the same Employment Insurance economic region. In other words, even if they work in different locations, employees are considered to work in the same industrial establishment if their workplaces are situated in the same EI economic region.
They perform substantially the same kind of work: To determine whether the work performed by two employees is substantially the same, the actual work performed by each employee, not job titles, should be considered.
The performance of that work requires substantially the same skill, effort and responsibility: When evaluating the skill and effort required to perform the job, it is essential to focus on the requirements of the job rather than an individual employee’s skill level or potential effort and capabilities.
Their work is performed under similar working conditions: Examples of conditions include the environment (noise level, varying temperatures), the shift on which the employee works, or exposure to hazardous substances.
Any other factor that may be prescribed by a regulation in the future is present.

Employers are not allowed to reduce an employee’s pay to comply with equal treatment requirements. Employers can only address disparities in rates of wages by increasing the rate of the employee who was paid less due to their employment status.

Record Keeping

The Regulations introduce new record-keeping requirements to the Canada Labour Standards Regulations, requiring all employers to keep the following records related to each review of rates of wages requested by an employee:

A record of any system an employer has in place that is being provided as a justification for paying different rates; and
The written request for review made by the employee and the employer’s response.

Employers must also keep records of written notices of employment or promotion opportunities provided to employees.

An employer that is a temporary help agency must also keep:

A record of each client for whom the employee performs a work assignment, and
The dates of commencement and termination of the assignment.

Requests for Review

If an employee believes they are being paid unequally due to their employment status, they may ask their employer to review the wage rate. The employer must then conduct a review and provide the employee with a written response within 90 days that includes either a statement that the employer has increased their rate of wages to comply with the Code, or a statement, including reasons, explaining that the employee’s current rate of wages complies with the provisions.

Notices of Opportunities

Employers must also inform their employees in writing about job opportunities or promotions, regardless of their employment status.

Temporary Help Agencies

A new division of the Canada Labour Code is being added to extend similar protections to employees of temporary help agencies; also taking effect on October 20, 2026.

This new division prohibits temporary help agencies from paying employees working for one of their clients a lower rate of wages than what a client pays its own employees when they perform substantially the same kind of work under similar working conditions, requiring substantially the same skill, effort and responsibility, and do so in the same industrial establishment.

Federally regulated temporary help agencies will also be prohibited from:

charging a fee to a person in connection with them becoming an employee;
charging a fee to an employee for assigning or attempting to assign them to perform work for a client;
charging a fee to an employee for assignment or job preparation services;
charging a fee to an employee for establishing an employment relationship with one of its clients;
charging a fee to a client for establishing an employment relationship with an employee, if this is more than six months after the start of the employee’s first assignment with the client; and
preventing or attempting to prevent an employee from establishing an employment relationship with a client.

Unionized Workplaces

If an existing collective agreement permits differences in wage rates based on employment status, then a transitionary period will apply, and the terms of the collective agreement will remain effective until October 20, 2028.

Steps for Employers

Federally regulated employers may want to consider steps to ensure they are compliant with the new rules before they come into force on October 20, 2026:

Review and compare all full-time, part-time, temporary, and casual wage rates to identify areas of potential concern.
For employers operating in multiple locations, determine which employees are considered to work in the same industrial establishment due to their workplaces being situated in the same EI economic region.
Ensure systems, policies, and procedures are in place so that any wage review request is properly documented and responded to within the required 90-day period.

If you have any questions about the new equal pay rules, please contact Carbert Waite’s Employment Law team.

Author

Dylan Snowdon

Partner
T: 403.705.3632
E: [email protected]

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New Equal Pay Rules for Federally Regulated Employees

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