2 New Canada Worker Pay Rules Coming In October 2026

2 new major worker pay rules take effect across federally regulated Canadian workplaces in October 2026, under the Canada Labour Code.

The first rule targets wage gaps between employees who do substantially the same work but hold a different employment status.

The second rule protects employees of federally regulated temporary help agencies from earning less than comparable staff employed by the agency’s client.

Workers in banking, telecommunications, transportation, broadcasting, postal and courier services, and other federal industries could see the effects on their pay.

A separate set of protections starting the same day bars federally regulated temporary help agencies from charging workers several kinds of fees.

Both pay rules use detailed comparison tests to determine when equal-wage protection applies.

New Rule 1: Workers Cannot Be Paid Less Just Because Of Employment Status

Section 182.1 of the Canada Labour Code bars paying one employee less than another because their employment status differs.

The amended Canada Labour Standards Regulations define employment status as being full-time, part-time, permanent or temporary.

Temporary covers fixed-term, seasonal, casual and irregular employment, while permanent means employment for an indeterminate period.

Full-time generally follows the collective agreement, contract or employer policy, with a fallback threshold of 30 or more weekly hours.

Immigration applicants may recognize that threshold, since the LMIA workforce cap calculation also treats 30 average weekly hours as full-time.

The prohibition applies only when two employees meet every one of the following conditions at the same time:

They work in the same industrial establishment.
They perform substantially the same kind of work.
The work requires substantially the same skill, effort and responsibility.
The work is performed under similar working conditions.
Their wages are calculated using the same type of wage rate.

If even one condition is missing, the equal treatment rule does not require the two wage rates to match.

What Counts As The Same Industrial Establishment

The regulations treat all branches, sections and divisions of a federal business within one Employment Insurance economic region as one establishment.

These are the same regions Employment Insurance uses when applying regional rules to benefit claims across Canada.

Two workers can therefore be compared even when they report to different buildings located within the same EI economic region.

Most employees are assigned to the establishment where they most often report for work in person.

Motor vehicle drivers and workers on trains, aircraft or ships belong to the establishment housing their home terminal, base, station or port.

Fully remote employees are generally tied to the establishment where they reported in person before their remote work agreement began.

Federal guidance also confirms that one industrial establishment can cover several geographic areas, which keeps legitimate regional pay systems possible.

What Substantially The Same Work Means

The two jobs do not have to be identical, and matching job titles are not what decides the comparison.

What matters is the work each person actually performs day to day, including its skill, effort and responsibility demands.

A part-time customer service agent and a full-time account representative can be comparable when their daily duties are substantially the same.

The same logic runs through the National Occupational Classification, which also matches jobs by main duties rather than job titles.

An employee in training who performs the same work as a colleague outside training must receive the same wage rate.

A trainee who mostly shadows others, needs closer supervision or carries fewer responsibilities is not performing substantially the same work.

What Same Type Of Wage Rate Means

Both employees must be paid using the same type of rate, such as time-based, mileage, piece, per-load or commission pay.

All time-based pay counts as one type, so an hourly worker can be compared with a salaried colleague doing matching work.

A commission-paid seller, however, is not compared under this factor with a coworker earning a straight hourly wage.

Rates for extra-duty work such as overtime, shift work, on-call time and call-backs can also be compared between employees.

Employment Status Gaps The Rule Covers

The rule reaches gaps such as full-time versus part-time, permanent versus fixed-term, and permanent versus seasonal or casual employment.

A casual agent at a federally regulated telecom call centre can compare pay with a permanent agent handling the same calls.

If an employer has a practice of informing employees in writing about employment or promotion opportunities, it must inform all employees regardless of employment status.

What Equal Pay Does Not Mean

The new rule does not require everyone doing similar work to receive exactly the same wage.

Section 182.1 allows a difference when it results from a system based on seniority, merit, or the quantity or quality of production.

The 2026 regulations add five more permitted criteria that employers can rely on when a proper system is in place:

Keeping an employee’s previous wage after reclassification or demotion, often called red-circling, until the new position’s rate catches up.
Higher rates needed to recruit or retain employees with the required skills during a shortage of skilled workers.
The geographic area where the employee works.
The geographic area where an employee on travel status works.
A different rate for employees on travel status compared with employees doing the same work without travel status.

Each exception depends on a genuine pay system, and the regulations set two firm conditions for what qualifies as one.

The system must apply to every employee whose wage rates are comparable, not just the worker who raised a concern.

Its details must also be communicated to those employees in writing or be readily available for them to examine.

Employers can document a system through contracts, pay policies or employment statements, but they cannot improvise one after a worker complains.

Federally regulated employers must also keep records describing any system they use to justify paying one employee less than another.

Unionized workers should know about one transition rule that can delay the practical effect of these equal treatment requirements.

Where a collective agreement in force on October 20, 2026, permits status-based wage differences, it prevails over the conflict for two years.

That transition window runs until October 20, 2028, after which the Code’s equal treatment requirements apply to those workplaces in full.

Employers Cannot Cut The Higher-Paid Worker’s Wage

Subsection 182.1(3) prohibits an employer from reducing any employee’s wage rate in order to comply with the equal treatment rule.

An employer facing a prohibited gap cannot solve it by lowering the full-time worker’s pay to match the part-time rate.

The legal fix works in one direction only, which means the lower rate must rise to close the gap.

The penalty regulations classify an illegal wage reduction as a Type C violation, a category linked to workers’ financial security.

Paying a lower rate because of employment status carries the same Type C classification under the updated penalty regulations.

Workers Can Request A Wage Review

An employee who believes their pay breaks the equal treatment rule can make a written request asking the employer to review it.

The employer then has 90 days after receiving the request to complete the review and provide a written response.

That response must state either that the wage has been increased to comply or that the current rate complies with reasons.

If the wage is raised, the employer must pay the difference from the request date until the higher rate actually begins.

Employers cannot dismiss, suspend, lay off, demote or discipline a worker because that worker requested a wage review.

The request also cannot be held against the employee in any later decision about promotion or training opportunities.

Once a worker submits a review request, a Labour Program complaint cannot be filed until one of two things happens.

Either the worker receives the employer’s written response, or the 90-day period for the review and answer has expired.

A worker who disagrees with the employer’s explanation can then take the matter to the Labour Program through its complaint process.

Employers must keep each written review request and their written response as part of their required employee records.

Full details on the process appear in the ESDC guide titled Equal Treatment – IPG – 122, effective October 20, 2026.

New Rule 2: Temporary Agency Workers Get New Equal Pay Protection

The second pay rule sits in section 203.2, inside a new Division VI.1 of Part III dealing with temporary help agencies.

A federally regulated temporary help agency cannot pay its employee less than the client pays its own comparable employee.

The comparison works only when the agency worker and the client’s employee meet all of these conditions:

They work in the same industrial establishment.
They perform substantially the same kind of work.
The work requires substantially the same skill, effort and responsibility.
The work is performed under similar working conditions.
Their wages are calculated using the same type of wage rate.

Picture an employee of a federally regulated temporary help agency assigned to a federally regulated airline cargo operation alongside the airline’s own cargo handlers.

If they share the same establishment, substantially the same work, similar conditions and the same pay type, the agency cannot pay less.

The agency worker’s lower rate cannot be justified simply because that worker arrived through a temporary help agency.

The same seniority, merit, production and regulatory exceptions apply, but they depend on the client’s own qualifying pay system.

That client system must be communicated in writing to the assigned agency worker or be readily available for them to examine.

Subsection 203.2(3) also stops the client from lowering its own employee’s wage just to help the agency meet the rule.

Agency workers get the same written review right under section 203.3, including the 90-day response deadline and back pay.

The ESDC guide Temporary help agencies – IPG – 123 sets two conditions that must both be met before these provisions apply.

First, the agency must be the worker’s real employer, which the Labour Program determines using its established real employer method.

Second, the agency itself must be federally regulated, because most staffing agencies in Canada fall under provincial jurisdiction.

The federal regulatory analysis states that few temporary help agencies are currently federally regulated, so this rule reaches a narrower group.

Student interns are excluded from both sets of provisions, although other interns covered by the Code are included.

New Temporary Agency Fee Ban Starts The Same Day

This fee ban is not one of the two pay rules, but it gives agency workers important protection starting October 20, 2026.

Under section 203.1, a federally regulated temporary help agency cannot charge a worker fees connected to any of the following:

Becoming the agency’s employee.
Being assigned, or the agency attempting to assign them, to work for a client.
Assignment or job preparation services, including résumé preparation and interview preparation.
Establishing an employment relationship with one of the agency’s clients.

The ban covers direct one-time fees, lump sums, percentages deducted from pay and any other fee charged for these purposes.

If a worker pays one of these prohibited fees, the agency must pay the worker an amount equal to that fee.

The agency also cannot prevent, or try to prevent, a worker from establishing an employment relationship with a client.

A separate rule governs what the agency may charge the client when that client hires the agency worker directly.

The agency cannot charge the client that fee if more than six months have passed since the worker’s first assignment there.

A fee to the client remains allowed when the hiring happens six months or less after that first assignment began.

The design removes a financial barrier that could discourage clients from offering longer-serving agency workers a direct job.

Several provinces already prohibit comparable fees charged to workers.

Who Will Be Covered By The New Canada Worker Pay Rules?

The federal List of federally regulated industries and workplaces identifies the private-sector industries that must follow Part III.

Banks, including authorized foreign banks
Airlines, airports and other air transportation
Telecommunications, including telephone, internet and cable systems
Radio and television broadcasting
Postal and courier services
Trucking and bus operations crossing provincial or international borders
Railways crossing provincial or international borders, and some short-line railways
Marine shipping, ferries and port services
Oil and gas pipelines crossing provincial or international borders
Grain elevators, feed and seed mills, feed warehouses and grain-seed cleaning plants
Uranium mining and processing, and atomic energy
Most federal Crown corporations, such as Canada Post
Certain activities of First Nations band councils and Indigenous self-governments
Businesses that are vital, essential or integral to any of these federally regulated operations

The federal regulatory analysis notes that more than 90% of the Canadian workforce falls under provincial or territorial labour jurisdiction.

Workers should first confirm which jurisdiction covers their employer before assuming these new pay rules apply to them.

Pay floors already show the split, since federal employers pay the federal minimum wage of $18.15 or any higher provincial rate.

These federal rules are also separate from the federal Pay Equity Act, which addresses gender-based pay gaps for work of equal value.

Employment status here means full-time, part-time, permanent or temporary terms, not a worker’s immigration status or permit type.

Workers on employer-specific permits should still review the rights temporary foreign workers already hold under their own program.

These changes target a long-standing pattern in which part-time and temporary workers can earn less for substantially the same work.

The federal regulatory analysis points to research showing that part of this pay gap cannot be explained by job characteristics.

Starting October 20, 2026, federally regulated employers must pay equal wage rates across employment statuses when every comparison condition is met.

Federally regulated temporary help agencies must also match their clients’ comparable wage rates and stop charging workers the banned fees.

For workers in banking, telecom, transportation, broadcasting and other federal sectors, employment status alone can no longer justify a lower wage rate.

Frequently Asked Questions (FAQs)

How can I tell if my employer is federally regulated?

Start with what your employer’s business actually does, not what your own job involves.
A cashier at a bank is federally regulated, while an accountant at a local grocery chain is not, because jurisdiction follows the employer’s core operations.
Operating in several provinces does not make a business federal on its own, since national retail chains and restaurants remain provincially regulated.
Businesses that are vital, essential or integral to a federal undertaking can also be federal, which makes some contractor situations harder to judge.
When in doubt, the Labour Program can confirm jurisdiction before you file a wage review request or complaint.

What happens if my employer ignores my written wage review request?

Failing to conduct the review and provide a written response within 90 days is a designated violation under the federal penalty regulations.
Once the 90-day period expires without a response, you can file a complaint with the Labour Program.
Keep a dated copy of your written request.
The 90-day review period begins when the employer receives it, and if a wage increase is required, the wage difference is payable from the date of the request.

Will I get back pay for the months before I asked for a review?

Generally, no, if an employer increases your wage after a written review request, the Code requires payment of the wage difference from the date you made the request until the higher rate begins.
For an equal-treatment complaint, any payment order can only take into account wage differences from the earlier of the complaint date or the wage-review request date.
Workers should therefore not assume an adjustment will automatically be retroactive to October 20.

My collective agreement pays part-timers less. Does the new rule apply to me right away?

Not necessarily, because a transition rule protects collective agreement terms already in effect on October 20, 2026.
Where such an agreement permits status-based wage differences, it prevails over the conflicting Code provisions for two years, until October 20, 2028.
A renegotiated agreement during that period should be checked carefully, and your union local is the best first contact.

Do these rules protect temporary foreign workers and other newcomers?

A temporary foreign worker employed by a federally regulated employer is an employee under Part III, so the same comparison test applies.
The rule compares full-time, part-time, permanent and temporary employment terms, and it does not create a separate category based on immigration status.
The Temporary Foreign Worker Program’s prevailing wage requirement is a different standard from equal treatment, so both can matter for the same worker.

Fact-Checked: All equal treatment and temporary help agency criteria cited in this article were verified against the official Equal Treatment – IPG – 122 and Temporary help agencies – IPG – 123 as published on Canada.ca with an effective date of October 20, 2026.

Disclaimer: This article is general information only; consult a qualified employment professional or review the federal list of federally regulated industries and workplaces before acting.

Kamal Deep Singh, RCIC

Kamal Deep Singh, RCIC (Regulated Canadian Immigration Consultant) licensed by CICC (formerly known as ICCRC) with member number R708618. He brings extensive knowledge of immigration law and new changes to rapidly evolving IRCC.