[Canada] New wage rate restrictions for federally regulated employers

In Canada, new equal pay provisions are set to come into force on October 20, 2026, under amendments to the Canada Labour Code and the Canada Labour Standards Regulations, MLT Aikins reports. 

Under these Amendments, federally regulated employers will be prohibited from paying different wage rates based on employment status to employees who perform substantially the same kind of work. Meaning employees will receive the same rate whether they are employed on a full-time, part-time, permanent or temporary basis.

According to MLT Aikins, the Amendments are a unique addition to the other pay equity regimes applicable to federally regulated employers in Canada. The Pay Equity Act focuses on ensuring pay equity between genders. The Employment Equity Act ensures equitable employment opportunities between various marginalised groups. The focus of the Amendments is to ensure thar employees are treated equally despite their employment status.

The new Amendments reportedly prohibit an employer from paying an employee a lower rate of wages than another employee because of a difference in employment status, where those employees:

• perform substantially the same kind of work;

• hold roles that require substantially the same skill, effort and responsibility;

• work in the same industrial establishment; and

• are paid wages calculated using the same kind of wage rate

If all of these conditions are met, employers are prohibited from paying a lower wage rate to an employee because of their employment status. Most significantly, employers cannot reduce any employee’s wage rate to comply with the new requirements. Disparities can only be corrected by raising the lower rate.

In addition, the Amendments state that if it is the employer’s practice to inform employees of promotional opportunities in writing, the employer must inform all employees, irrespective of employment status.

Source: MLT Aikins

In Canada, new equal pay provisions are set to come into force on October 20, 2026, under amendments to the Canada Labour Code and the Canada Labour Standards Regulations, MLT Aikins reports. 

Under these Amendments, federally regulated employers will be prohibited from paying different wage rates based on employment status to employees who perform substantially the same kind of work. Meaning employees will receive the same rate whether they are employed on a full-time, part-time, permanent or temporary basis.

According to MLT Aikins, the Amendments are a unique addition to the other pay equity regimes applicable to federally regulated employers in Canada. The Pay Equity Act focuses on ensuring pay equity between genders. The Employment Equity Act ensures equitable employment opportunities between various marginalised groups. The focus of the Amendments is to ensure thar employees are treated equally despite their employment status.

The new Amendments reportedly prohibit an employer from paying an employee a lower rate of wages than another employee because of a difference in employment status, where those employees:

• perform substantially the same kind of work;

• hold roles that require substantially the same skill, effort and responsibility;

• work in the same industrial establishment; and

• are paid wages calculated using the same kind of wage rate

If all of these conditions are met, employers are prohibited from paying a lower wage rate to an employee because of their employment status. Most significantly, employers cannot reduce any employee’s wage rate to comply with the new requirements. Disparities can only be corrected by raising the lower rate.

In addition, the Amendments state that if it is the employer’s practice to inform employees of promotional opportunities in writing, the employer must inform all employees, irrespective of employment status.

Source: MLT Aikins