Employer compliance

From: Employment and Social Development Canada

Notice: On April 1, 2019, changes to Part III of the Canada Labour Code will improve compliance and enforcement measures. To learn more please consult Recovering unpaid wages page.

Through enhanced awareness and education the Labour Program supports and encourages voluntary compliance with Part III of the Canada Labour Code (Code). When voluntary compliance proves ineffective, compliance is sought through enforcement measures that are fair, foreseeable and nationally consistent.

Keeping records

An employer must keep employment and payroll records for a minimum 36 months. These records must include: the name, address, social insurance number, job title, start and end date of employment, hours of work, rate of pay and sex of the employee. The age must also be collected for employees under the age of 17.

When employment or payroll records are not provided, the Labour Program can determine the amount of wages owed using the best available evidence

The Labour Program can recover wages and other amounts up to 24 months of unpaid wages (up from 12 months).

For general information, please consult Keeping of records (Publication 14 – Labour Standards).

For technical guidance, please consult Determining the employer/employee relationship (IPG-069) and Determining the "Real employer" (IPG-068).

Compliance with federal labour standards

Part III of the Code regulates employment conditions for wages, benefits, policies and practices. Establishing employment conditions ensures a level playing field for all federally regulated industries. The federal government prohibits employers and employees from operating below these conditions even if they voluntarily agree to do so.

The Labour Program’s response to non-compliance of federal labour standards involves eight key actions that escalate:

  1. Assurance of voluntary compliance: an employer's written commitment to the Labour Program that a monetary or non-monetary violation(s) will be corrected within a specified period of time.
  2. Letter of determination: a formal written request that the employer correct the non-compliance situation. The employer may, for example, be asked to pay wages or other amounts owing immediately, or to implement appropriate workplace policies and practices.
  3. Payment order: if an employer does not comply with a letter of determination, the Labour Program may issue a payment order to the employer or director to collect unpaid wages. The Labour Program will add an administrative fee (15% of the total amount or $200; whichever is greater) to the amount owed in a payment order to an employer.
  4. Collecting money: when an employer or director does not pay a payment order, the Labour Program can collect from an employer’s or director’s debtors or financial institution.
  5. Reviews: those directly affected by a payment order may request a review of the Labour Program’s decision. When a request for review is made on a payment order, the Labour Program will accept a letter of credit in lieu of a monetary payment. Orders to debtors of employers, however, cannot be reviewed.
  6. Appeals: those directly affected by a review decision may appeal if they disagree with the findings of the reviewer or if they believe there is a question of law or jurisdiction in their case.
  7. Filing in federal court: a payment order may be filed in federal court to ensure it is enforceable as a judgment of that court. Payment orders may also be published on the Labour Program’s website.
  8. Prosecutions: prosecutions may be undertaken when an employer does not correct a Canada Labour Code Part III breach or willfully breaks the law while fully aware of all legal obligations. Repeat violations are one indication of an intentional or willful action.

For information on how complaints are handled, please consult the following Labour Program publications:

For information on Payment orders filed in the Federal Court of Canada consult Canada Labour Code - Payment orders filed in the Federal Court of Canada

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