Employer compliance with federal labour standards

From: Employment and Social Development Canada

Compliance with federal labour standards

Federally regulated employers and their employees must follow the employment conditions for wages and other benefits set in Part III of the Code. This ensures a level playing field for all federally regulated industries and workplaces.

If the Labour Program finds that an employer is operating below these conditions, the Labour Program may take a number of escalating compliance and enforcement actions, including:

assurance of voluntary compliance: An employer's written commitment to the Labour Program that they will correct a contravention(s) within a specified period of time. A contravention may be:
- monetary, or
- non-monetary
letter of determination: A formal written request that the employer correct the non-compliance situation. For example, the Labour Program may ask the employer to:
- pay wages or other amounts owing immediately, or
- implement appropriate workplace policies and practices
payment order: If you do not voluntarily comply, the Labour Program may issue a payment order to you or your director to collect unpaid wages. The Labour Program will add an administrative fee to the amount owed in this payment order
collecting money: If you or your director do not pay a payment order, the Labour Program may collect the amounts owed from:
- your debtors, or
- financial institution, or
- the debtors or financial institution of your director(s)
compliance order: As of January 1, 2021, the Labour Program may issue a compliance order to stop non-compliance. This order prevents recurrence of any contravention of the Code and its Regulations, including a contravention related to an ‘excess hours’ permit
administrative monetary penalty: As of January 1, 2021, the Labour Program may issue a notice of violation with an administrative monetary penalty (AMP). The Labour Program may issue the notice if you do not correct a contravention of the Code
filing in federal court: The Labour Program may file a payment order and a notice of violation in federal court to ensure that it is enforceable as a judgment of that court. The Labour Program may also publish information on the Labour Program website concerning a:
- payment order, and
- notice of violation
prosecutions: If you do not correct a contravention with the Code or Regulations, the Labour Program may choose to prosecute you. The Labour Program may also take this route if you are fully aware of your legal obligations and still willfully break the law. Repeat contraventions indicate an intentional or willful action. If found guilty, you may be subject to the following fines:
- corporations will receive a fine up to:
  - $50,000 for the first offence
  - $100,000 for the second offence, and
  - $250,000 for the third (and subsequent) offences
- an employer who is not incorporated is liable to a fine of up to:
  - $10,000 for the first offence
  - $20,000 for the second offence, and
  - $50,000 for the third (and subsequent) offences
public naming of employers: The Labour Program will publish information about employers who violate the Code, including:
- all payment orders of $5000 or greater filed in federal court
- administrative monetary penalties, and
- prosecutions

Misclassification of employees

Federally regulated employers are prohibited from misclassifying employees in order to avoid their obligations under the Code and Regulations. The following are some examples of situations in which an employee may be misclassified:

an incorporated driver who meets the criteria to be an employee is misclassified as a self-employed/independent worker
an intern or employee is misclassified as a student intern
employees who have shares in a business are misclassified as an associate if they do not have any control over:
- ownership, or
- business operations

Any employer who knowingly misclassifies an employee is contravening the Code. They may be subject to enforcement action by the Labour Program, up to and including an administrative monetary penalty (AMP) or prosecution.

Providing information related to employment

As an employer, you must provide your employees with information related to their employment.

The Canada Labour Code, Part III (Code) requires you to provide your employees with a written employment statement (statement) containing information relating to their employment.

Employment statement

The statement must include the information that is listed in the Canada Labour Standards Regulations. You can also find the information in the Canada Gazette, Part II, Volume 157, Number 10.

Employers can use the Employment Statement template made available online. Employers are not required to use this template and can provide the information through other written documents. For example, the information can be provided in a:

letter of offer
contract of employment
policy manual, or
collective agreement

The required information can also be provided through a combination of written documents.

Employer’s obligations

The statement must be given to your employees within the first 30 days of their employment.

If you make any change to an employee’s statement, send them an updated copy within 30 days of making the change.

Written employment statements must be kept for 36 months after employment ends. Upon request, an employee can request additional copies of their statement.

Note: Employers have 90 days from July 9, 2023, to provide the statement to employees hired before that date.

Keeping records

As an employer, you must keep employment and payroll records for each employee for at least 36 months. When employment ends, you must also keep the employee’s records for another 36 months.

In addition, you must post Schedule II “Notice Related to the Canada Labour Code – Part III” in the workplace. This is so your employees know their rights and where to get more information about the federal labour standards.

You must also keep records for each student intern for at least 36 months after the internship ends.

What must be in the record for employees

The Canada Labour Standards Regulations (Regulations) list in detail what you must include in each employee record file. In general, each employee’s employment and payroll record file must contain the following:

General records

Start and end date of employment of each employee (section 24(1) of the Regulations)
Name
Address
SIN
Classification
Sex
Age (only recorded for employees under the age of 18)
Rate of wages (hourly/weekly/monthly/or other basis) and any changes in the rate (section 24(2)(b) of the Regulations)
Explanation of wages if on any other basis (section 24(2)(c) of the Regulations)
Hours of work provided each day, except where the employee is:
- a manager, superintendent, or an employee who exercises management functions
- a member of the architectural, dental, engineering, legal, or medical professions
- a member of any of the following classes of employees exempt from the application of standard and maximum hours of work (section 24(2)(d) of the Regulations):
  - Commission salespeople in the broadcasting industry
  - Commission salespeople in the banking industry
  - Railway running-trades employees

Earning records

Amounts paid each pay day (section 24(2)(e) of the Regulations)
Overtime pay recorded (section 24(2)(e) of the Regulations)
Vacation pay recorded (section 24(2)(e) of the Regulations)
General holiday pay recorded (section 24(2)(e) of the Regulations)
Personal leave pay recorded (section 24(2)(e) of the Regulations)
Pay for leave of victims of family violence recorded (section 24(2)(e) of the Regulations)
Bereavement leave pay recorded (section 24(2)(e) of the Regulations)
Medical leave of absence pay recorded (section 24(2)(e) of the Regulations)
Termination pay recorded (section 24(2)(e) of the Regulations)
Severance pay recorded (section 24(2)(e) of the Regulations)
Details of pay and deductions made each pay day (section 24(2)(f) of the Regulations)
Start and end date(s) of each vacation period (section 24(2)(g)(i) of the Regulations)
If an employee interrupted their vacation, the date of interruption and if applicable, the date the employee resumed the vacation (section 24(2)(g)(ii) of the Regulations)
If the employee postponed their vacation, the new start and end dates (section 24(2)(g)(iii) of the Regulations)
Year of employment in respect to each annual leave granted (section 24(1)(g.01) of the Regulations)
Copy of any written notice of an interruption or resumption of (section 24(2)(g.02) of the Regulations):
- vacation
- parental leave
- maternity leave
- compassionate care leave
- leave related to critical illness
- leave related to death or disappearance
Start and end date of any leave granted to the employee under Division VII – Maternity related Reassignment and Leave and Other Leaves, including any notices and documentation/medical certificate provided by the employee for such leave requests (section 24(2)(h) of the Regulations)
Start and end date of any maternity reassignment/modifications/notices (section 24(2)(h.1) of the Regulations)
General holidays or another day with pay granted, notices of substitution (not subject to a collective agreement), proof that the substitution was approved in writing (section 24(2)(i) of the Regulations)
Employer’s pay periods (section 24(2)(k) of the Regulations)

Averaging records

Posted notice (section 24(2)(j) of the Regulations)
Periods of averaging (section 24(2)(j) of the Regulations)
Start date of averaging (section 24(2)(j) of the Regulations)
Details of reductions (section 24(2)(j) of the Regulations)
Number of overtime hours paid if applicable or granted time off for overtime worked (section 24(2)(j) of the Regulations)

Additional requirements

Copy of any notices of termination under Division IX – Group Termination of Employment and Division X – Individual Terminations of Employment (section 24(2)(l) of the Regulations)
Copy of employer’s written request for medical certificate under Division XIII – Medical Leave (section 24(2)(n.7)(iv) of the Regulations)
Copy of any medical certificates under Division XIII – Medical Leave (section 24(2)(n.7)(v) of the Regulations)
Copy of any medical certificates under Division II.1- Breaks for Medical Reason or Nursing, VII – Maternity related Reassignment and Leave and Other Leaves (section 24(2)(h) of the Regulations) and XIII.1 – Work-related Illness and Injury (section 24(4)(b) of the Regulations). Note: The employer must maintain the confidentiality of these documents
Dates of any bereavement leave granted and a copy of the written notice provided under Division VIII – Bereavement Leave (section 24(2)(m) of the Regulations)
Record of unforeseeable emergencies that an employee had to deal with and as a result of which the employer:
- could not provide the employee with 24 hours’ notice of a change to their shift (section 24(2)(n.41) of the Regulations)
- had to either postpone or cancel the employee’s 30-minute break (section 24(2)(n.21) of the Regulations)
- had to require the employee to work additional hours which resulted in them having a rest period of fewer than 8 hours (section 24(2)(n.22) of the Regulations)
Written approval of modified work schedules (section 24(2)(n) of the Regulations)
Every work schedule and modification that is provided to an employee (section 24(2)(n.1) of the Regulations)
Every written notice or request as per Division I – Hours of Work or I.1 – Flexible Work Arrangements (section 24(2)(n.2) of the Regulations)
Record of any refusal made as per the employee’s right to refuse overtime or work scheduled with less than 96 hours’ notice (section 24(2)(n.3) and (n.5) of the Regulations)
Record describing any situation whereby an employee’s refusal to work was prevented by a situation that the employer could not have reasonably foreseen (section 24(2)(n.4) and (n.6) of the Regulations)
Leave granted under Division XV.2 – Leave of Absence for Members of Reserve Force:
- a record of start and end date or interruption of the leave
- a copy of the notice
- a copy of any medical certificate of document provided, and
- a copy of any notice issued
Detailed reasons for employee’s absence due to work-related illness or injury (section 24(4)(a) of the Regulations)
Date of return to work or notification with reasons that employee cannot return (section 24(4)(c) of the Regulations)

What must be in the record for student interns

The Standards for Work-Integrated Learning Activities Regulations (Regulations) list in detail what you must include in each student intern’s record file.

In general, you must keep records of the following information:

full name and address of the student intern and their age if under 18 years (section 4(1)(a) of the Regulations)
Internship agreement (section 4(1)(b) of the Regulations)
any written agreement between you and the student intern (section 4(1)(c) of the Regulations)
any correspondence between you and the educational institution concerning the internship (section 4(1)(d) of the Regulations)
the dates that the internship began and ended (section 4(1)(e) of the Regulations)
the number of hours and dates on which the student intern performed activities (section 4(1)(f) of the Regulations)
all general holidays granted and the student intern’s written agreement if another day was substituted for a general holiday (section 4(1)(g) of the Regulations)
the dates that the student intern began or ended a leave of absence. In addition, any notice of the leave the student intern gave (section 4(1)(h), 4(1)(j) of the Regulations)
written approval of the student intern of any modified work schedule that was put in place (section 4(1)(i) of the Regulations):
any certificate from a health care practitioner related to the student intern’s (section 4(1)(k) of the Regulations):
- medical breaks
- maternity-related reassignment, or
- a leave of absence
detailed reasons for any absence due to illness or injury related to the internship (section 4(1)(l)(i) of the Regulations), and
- a copy of any certificate from a health practitioner certifying that the student intern is fit to resume the activities. Note: The employer must maintain the confidentiality of these documents (section 4(1)(l)(ii) of the Regulations), and
- date the internship resumed or a copy of a notification from the employer explaining why the student intern could not return to their placement (section 4(1)(l)(iii) of the Regulations)
the beginning and end dates of any maternity-related modification to the student intern’s activities (section 4(1)(m) of the Regulations)
every work schedule and modification of a work schedule that is provided to a student intern (section 4(1)(n) of the Regulations)
every refusal to work made by a student intern due to not receiving 96 hours’ written notice of their work schedule (section 4 (1)(o) of the Regulations)

Sharing records with the Labour Program

While it is mandatory for you to keep employee and payroll records, it is also beneficial. The Labour Program may ask to see your employment and payroll records when:

inspecting your workplace, or
investigating a complaint

If you do not provide the requested records, the Labour Program may decide to issue enforcement actions. These can be up to and including an administrative monetary penalty based on:

the information provided by the person making the complaint, and
failure to keep records

For more information on keeping records, please consult: Section 24 of the Canada Labour Standards Regulations.

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Date modified:: 2023-08-18

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