Employment and Social Development Canada’s Labour Program has published equal treatment guidance (IPG-122) for federally regulated employers. Sections 182.1 and 182.2 of the Canada Labour Code took effect on October 20, 2026. Part-time and temporary employees can’t earn a lower rate for substantially the same work.
So what does that mean if you run a bank operations team, an airline crew, or an interprovincial trucking fleet? Every gap between full-time and part-time pay now needs a lawful, documented reason.
What Canada’s equal treatment rules cover
Canada’s equal treatment rules stop federally regulated employers from paying someone less because of their employment status. The test compares employees doing substantially the same work in the same industrial establishment. Supporting regulations (SOR/2026-75), published in the Canada Gazette, Part II on May 6, 2026, add exceptions and define temporary work as fixed-term, seasonal, casual, or irregular.
- Who’s covered: Employers in federally regulated industries such as airlines, banks, interprovincial rail and trucking, ports, telecommunications, and most federal Crown corporations
- Who isn’t: Provincially regulated employers and student interns, although other interns are included
- Comparison test: Work must call for substantially the same skill, effort, and responsibility, under similar working conditions
- Industrial establishment: All branches of your federal business located in the same Employment Insurance economic region
- Rate types: Rates are comparable only if they’re the same type, such as time, mileage, piece, per-load, or commission
- Job titles: Matching titles aren’t enough, because actual duties decide whether work is substantially the same
- Exceptions: Seniority, merit, or production systems that apply to all comparable employees and are in writing or readily available
- Regulatory exceptions: Red circling after reclassification or demotion, labour-shortage recruitment or retention (case by case), geographic area, and travel status
- No pay cuts: You can’t reduce anyone’s wages to comply, so the only fix is raising the lower rate
In the guidance, a bank pays full-time IT specialists CAD 50 an hour and part-time ones CAD 45, and a written seniority system justifies the gap. A trucking company pays drivers hauling dangerous goods on mountain routes CAD 0.60 per mile and seasonal drivers CAD 0.50, which working conditions justify.
What this means for part-time and temporary workers
Part-time and temporary employees in federally regulated workplaces can now ask their employer to review a lower wage rate. The employer must answer in writing within 90 days.
That answer either explains, with reasons, why the current rate complies, or confirms the employer raised it. Employees can’t file a Labour Program complaint until they receive it or 90 days pass.
For you, that’s a 90-day clock that starts when a request lands.
What it means for employers
If you’re a federally regulated employer, you need to show that every status-based pay gap has a lawful reason. Start with these four steps.
- Audit pay by status: Compare rates for similar work across employment types in each Employment Insurance economic region
- Document your systems: Write down seniority, merit, and production systems and make them available to every comparable employee
- Fix gaps upward: Raise lower rates where no exception applies
- Build a review process: Name an owner, track the 90-day deadline, and template your written responses
Expanding into Canada without a local entity? This is where an Employer of Record becomes critical. It acts as the legal employer, runs payroll, and applies local employment standards, so you don’t start from scratch.
Staying compliant in the evolving Canadian market with Multiplier
Multiplier helps you hire, pay, and manage your Canadian team compliantly, without setting up a local entity.
Our Employer of Record acts as the legal employer for your Canadian employees.
Working with independent professionals? Contractor of Record covers compliant contractor engagements. Already have a Canadian entity? Global Payroll helps you pay your team there.
Before you hire, read our Canada hiring guide and model total costs with the employee cost calculator.
FAQs
Who do Canada's equal treatment rules apply to?
They apply to federally regulated employers, including airlines, banks, interprovincial rail and trucking, ports, telecommunications, and most federal Crown corporations. These employers can't pay part-time, temporary, casual, or seasonal employees less for substantially the same work. Interns are covered, but student interns aren't.
Do the rules apply to provincially regulated employers?
No. Sections 182.1 and 182.2 sit in the Canada Labour Code, which covers federally regulated workplaces only. Provincially regulated employers follow their own province's employment standards. Confirm which regime governs your business before you change any pay structures or employment terms.
Can I pay part-time employees less than full-time employees?
Only if a recognized exception applies. A seniority, merit, or production system can justify a gap if it applies to all comparable employees and is in writing or readily available. Regulatory exceptions also cover red circling, labour shortages, geographic area, and travel status.
Can I lower full-time wages to close a pay gap?
No. IPG-122 says employers can't reduce anyone's wages to comply with the equal treatment rules. Your only option is raising the lower rate to match. Budget for those wage increases when you audit pay across full-time, part-time, and temporary roles.
How long do I have to respond to a pay review request?
You have 90 days to respond in writing. Your response must explain, with reasons, why the rate complies or confirm that you raised it. Employees can't file a Labour Program complaint until they receive your response or the 90 days pass.
