Rules Regarding Equal Treatment For Federally Regulated Employers Coming Into Force October 2026

New rules for federally regulated employers regarding equal treatment are coming into force on October 20, 2026. These rules were included in Bill C-86, Budget Implementation Act, 2018, No. 2, which contained amendments to the Canada Labour Code (the “Code”).

The federal government has already published an Interpretations, Policies and Guidelines (“IPG”) called Equal Treatment – IPG – 122 ^[1] in anticipation of these rules coming into force this fall.

Equal Treatment

The rules under sections 182.1 and 182.2 of the Code prohibit employers from paying different wage rates to employees based on employment status if they: 

• work in the same establishment; 

• perform substantially the same kind of work; 

• apply substantially the same skill, effort and responsibility in the performance of that work; and 

• the work is under similar working conditions. 

However, the Code provides for exceptions for different wage rates where they are based on systems of seniority, merit or quantity/quality of each employee’s production. Such a system must apply to all employees whose rates of pay are comparable and the details of such a system must be either communicated in writing to the employees or be readily available for them to review. The Equal Treatment – IPG – 122 provides further clarification on these various factors and criteria.

An employee is able to request a review of a wage rate and the employer must, within 90 days, review and provide a written response that either states (with supporting reasons) that the wage rate will be increased or that the wage rate already complies with the Code. An employee may file a complaint with the Labour Program following receipt of the employers’ response or after the 90-day period has expired.

Importantly, an employer may not reduce an employee’s wage rate to comply with these new requirements. An employer can only remedy wage disparities by increasing the wage rate of an employee who is being paid less due to their employment status.

Takeaways

These rules mean that, for instance, an employer cannot pay someone less just because they are part-time instead of full-time, temporary instead of permanent, or fixed-term instead of indefinite-term. If two employees are doing essentially the same job under similar conditions, differences in employment status alone are not enough to justify different wage rates.

If an employer wants to rely on an exception such as seniority or merit to justify differences in wage rates, employers should ensure the pay system is transparent and applied consistently to its employees. 

Employers should also be aware of an employee’s right to request a review of their wages and the 90-day timeline to provide a response.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.