Recent and Upcoming Changes Affecting Federally Regulated Employers

Canadian employers in federally regulated industries (which include industries such as telecommunications, air/rail travel, and banking, among others) may want to note a number of recent and upcoming changes that will impact their workplaces. Here are the key changes at a glance. 

Pay Equity Plans 

Deadlines regarding Canada’s Pay Equity Act, and its associated regulations, are fast approaching.

The Pay Equity Act applies to any federally regulated employer with ten or more employees. Any such employer must develop a pay equity plan within three years of becoming subject to the act. With the act having become effective on August 31, 2021, if an employer was subject to the act on this date, a pay equity plan is due by August 31, 2024.

A pay equity plan must:

• “identify the different job classes made up of positions in [the] workplace”;
• “determine whether each job class is predominantly male, predominantly female or gender neutral”;
• “determine the value of work of each predominantly female or male job class”;
• “calculate the compensation of each predominantly female or male job class”; and
• “compare the compensation between predominantly female and male job classes doing work of equal or comparable value.”

Increases deemed to be necessary can be phased in by certain employers over a three to five-year period. The plan must be updated every five years to ensure the maintenance of pay equity and to adjust any new gaps that emerge.

Canada Labour Code—New Paid Sick Leave Benefit (10 Days Annually)

As of December 1, 2022, amendments to the Canada Labour Code (CLC) granting employees ten days of paid sick leave are now in effect. These paid sick leave provisions establish the following:

• Employees will be provided with up to a maximum of ten days of paid sick leave each calendar year.
• New employees will earn three days of paid sick leave after completing thirty days of continuous employment with the employer.
• After completing one additional month of continuous employment with the employer, employees will earn one day of paid sick leave for every month of employment.
• Unused paid sick leave days carry over to the next calendar year and count toward that year’s ten-day maximum.
• Employers may request a medical note for medical leaves of absence with pay that are five consecutive days or more. 

These paid sick leave days can be taken for illness or injury, organ or tissue donation, attending medical appointments, or quarantine. Employers may want to assess how these new paid sick days factor in to other types of paid leave provided under policy or contract to avoid potentially needing to stack benefits (i.e., offer ten sick days in addition to other types of paid leave). 

New Applicable Age Restrictions

On March 9, 2023, the federal government imposed new restrictions on an employer’s utilization of employees under a certain age. The government increased the applicable age on restricted work from seventeen to eighteen years old, and it introduced the following restrictions:

• The employees may not work at any time they are required by provincial law to be at school.
• They may not work underground in a mine.
• They may not do work that would cause them to enter a place that involves activities with explosives as defined under the Explosives Regulations, 2013.
• They may not work as a “nuclear energy worker” as defined in the Nuclear Safety and Control Act.
• They may not do work that they are prohibited from doing under the Canada Shipping Act, 2001 by reason of their age.
• They may not do work that is likely to be injurious to their health or to endanger their safety.
• An employer may not cause or permit an employee under the age of eighteen years to work between 11:00 p.m. on one day and 6:00 a.m. on the following day.

These changes are set to become effective on June 12, 2023. 

Employment Insurance (EI) Sickness Benefits Increased and Increased Medical Leave 

On December 18, 2022, the number of weeks of EI sickness benefits that employees may claim was increased from fifteen weeks to twenty-six weeks. On this same date, unpaid medical leave under the CLC was increased from seventeen weeks to twenty-seven weeks.

Changes to Canada’s Competition Act (Prohibiting Wage Fixing/No-Poaching Agreements)

Finally, on June 23, 2022, Canada’s federal government announced changes to the Competition Act that are set to become effective on June 23, 2023. The new amendments involve wage-fixing and no-poaching agreements between employers. These will now be criminally prohibited in the “Criminal Conspiracy” provisions, with the new section 45(1.1). Please note that these amendments also apply to provincially regulated employers.

The prohibited wage-fixing agreements are those that would fix, maintain, decrease, or control salaries, wages, and/or terms and conditions of employment (which include the responsibilities, benefits, and policies associated with a job, broadly defined). A no-poaching agreement is one by which employers agree to refrain from hiring or trying to hire each other’s employees. The potential criminal penalties for a person found to have violated these provisions include imprisonment for up to fourteen years and/or a fine to be set at the discretion of the court. These activities could also result in significant civil liability through a potential class action brought under section 36 of the Competition Act.

The Toronto and Montréal offices of Ogletree Deakins will continue to monitor these and other changes as they develop and will post updates on the Cross-Border blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.

Ryan Martin is an associate in the Montréal office of Ogletree Deakins.

John T. Wilkinson is a 2022 graduate of Queen’s University, Faculty of Law, and he is an articling student in the Toronto office of Ogletree Deakins.