Pay and minimum wage, deductions, and wage recovery

From: Employment and Social Development Canada

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As an employee working in a federally regulated business or industry, you have certain protections related to the payment of wages and other amounts. This section provides information about your rights and the steps you can take if you believes that your employer has not complied with the Canada Labour Code (Code).

Minimum wage

In this section

Effective December 29, 2021, the federal minimum wage is $15.00 per hour. However, if the minimum wage set by the province or territory you are employed in is greater than the federal minimum wage, the provincial or territorial wage rate will apply to you.

As a federally regulated employee, you are entitled to receive at least the minimum wage. This also applies if you are an intern.

For more information, refer to the Minimum Wage Database.

Annual federal minimum wage adjustment

On April 1st of each year, the federal minimum wage may increase to account for inflation. Increases to the federal minimum wage are based on Canada's Consumer Price Index for the previous calendar year, as published by Statistics Canada.

Effective April 1, 2022, the federal minimum wage will be adjusted to $15.55 per hour.

Employees under 17 years of age

If you are under the age of 17, you may work if:

If you are under the age of 17, the minimum wage also applies to you. However, if your province or territory fixes the minimum hourly rate based on age, your minimum wage is the highest of those rates (either provincial or federal rate).

If you are not paid on an hourly basis

If your employer does not pay you on an hourly basis, you must receive at least the equivalent of the minimum wage.

Where the basis of payment is not time, the Minister of Labour may fix at a rate that is equivalent to the minimum wage.

Reporting to work at the call of your employer

If you report to work at the call of your employer, you must receive wages for not less than 3 hours at your regular rate of wages. This applies whether or not your employer asks you to do any work after reporting to work.

Exemptions for apprentices and employees receiving room and/or board

If you are registered under and paid according to a provincial apprenticeship Act, your employer is exempt from the application of the minimum wage.

If your employer provides you with room and/or board, and you accept that arrangement, your employer may reduce your wages below minimum wage. Your employer cannot reduce your wages more than:

  • 50 cents, for each meal, and
  • 60 cents, per day, for living quarters

Getting paid for work

Your employer must pay your wages on the regular payday established.

Any vacation pay you are owed must be paid at the time you take your vacation. If your employment ends and you are owed vacation pay, your employer must pay it within 30 days after your last day of work.

Deductions

As an employee, your employer can make certain deductions from your pay, including those:

  • required by federal or provincial law, such as:
    • taxes, and
    • employment insurance premiums
  • authorized by a court order, such as garnished child support payments
  • authorized by a collective agreement, such as union dues, and
  • intended to collect any overpaid wages

You can also authorize your employer to make other deductions, including for the following:

  • charitable donations
  • savings plan contributions
  • medical and dental premiums
  • life insurance and long- term disability premiums, and
  • pension plan or RRSP contributions

For your authorization to be valid, it must be in writing and set out the following:

  • specific amounts
  • purpose, and
  • frequency of the deductions

This ensures that you understand what you are signing and how/when it will affect your pay.

Note: Your employer can only deduct traffic tickets and fines from your wages if you provide a written authorization.

Your employer cannot force you to sign an authorization. You must voluntarily consent.

Your employer cannot deduct money from your pay for property damage without your written consent. If your employer feels that you are responsible for the property damage, an alternative is civil court. In this case, an impartial third party will judge the matter.

For technical guidance, please consult Deductions from wages or other amounts due to an employee (IPG-060).

Wage recovery assistance

The Code has a wage recovery system for federally regulated employees.

The system allows the Labour Program to collect some amounts allegedly owed using a fair and standardized process.

For example, the Labour Program can collect:

  • wages for hours worked including overtime
  • vacation pay
  • general holiday pay
  • severance pay, and
  • pay in lieu of notice of termination of employment

The Labour Program can recover up to 24 months of unpaid wages or other amounts owed. When your employer does not provide payroll records, the Labour Program can determine wages or other amounts owed using the best available evidence.

The wage recovery system also includes a review and appeal process if you or your employer disagree with the Labour Program’s findings.

Complaints

As an employee, you may file a complaint about unpaid wages and/or other amounts owed to you by your past or present employer.

For general information, please consult the Filing a complaint web page.

Handling cases of non-payment of wages

The Labour Program will investigate any complaints that you (the employee) file within 6 months from the last day your employer was required to pay you.

Actions taken by the Labour Program after you filed a complaint

The Labour Program will investigate to determine whether:

  • a complaint is founded, and
  • the employer owes wages or other monies

When you file a complaint, you may receive a written communication related to your complaint from the Labour Program.

It is important to note that the Labour Program will consider your complaint abandoned and a Notice of Complaint Rejection will be sent to you if you do not respond to the Labour Program:

  • within a period it considers reasonable, and
  • if at least 30 days has passed from the day you made your complaint

If the above occurs, the Labour Program may send you a written notice indicating that you have 30 days to advise in writing that you wish to continue with your complaint.

The Labour Program may find that your complaint of non-payment of wages is founded and that your employer owes you monies. In this case, the Labour Program will first try to get your employer to voluntarily pay the wages or other monies they owe you. If this happens, and you agree with the amount your employer will pay, the Labour Program will close your case.

However, if you do not agree with the amount your employer will pay, the Labour Program may issue a Notice of Voluntary Compliance to your employer. This will provide you the opportunity to request a review.

If your employer does not voluntarily comply, the Labour Program may issue a Payment Order to collect unpaid wages.

The Labour Program may find that your employer does not owe you monies. In this case, you (and your employer) will receive a Notice of Unfounded Complaint from the Labour Program with the findings. This will provide you the opportunity to request a review.

If the Labour Program finds a pattern of non-compliance during an investigation, it will advise the employer on their responsibilities under the Code. If the employer does not comply with the Code, they may be subject to enforcement action up to and including an administrative monetary penalty.

Administrative fees

The following administrative fee will be added to the Payment Order when issued to the employer:

  • a fee of $200, or
  • a fee of 15% of the total amount owed

Note: If the 15% of the total amount owed is more than $200, the Labour Program will apply that amount to the Payment Order along with the wages or other monies owed to the employee.

Director’s liability

Sometimes, wage recovery from an employer is unlikely or impossible. In this case, the Labour Program may hold the corporation’s directors liable for amounts employers owe to employees during their time as director. Corporate directors are jointly and individually liable for employees’ wages and other amounts to which employees are entitled, up to a limit equivalent to 6 months’ wages.

When an employer or director does not pay a payment order, the Labour Program can collect from a director’s debtors or financial institution.

Review and appeal of a Notice of Unfounded Complaint or a Notice of Voluntary Compliance

If you do not agree with the Labour Program’s decision, you may request that the Labour Program review the Notice of Unfounded Complaint or Notice of Voluntary Compliance. To do this, you must make your written request to the Labour Program, with reasons and within 15 days after notice is served.

Upon completion of the review, the Labour Program may, in writing:

  • confirm the Notice of Unfounded Complaint,
  • confirm the Notice of Voluntary Compliance, or
  • rescind the notices

In the case of a rescinded notice, the Labour Program will re-examine the complaint.

If you are not satisfied with the review decision, you may request an appeal at the Canada Industrial Relations Board (CIRB), only on a question of law and jurisdiction. You must make your request to the CIRB, in writing and with reasons, within 15 days after the Labour Program served the review decision.

Note that the Labour Program may refer some requests for review directly to the CIRB for hearing.

Review and appeal of a Payment Order

As an employee, employer or a director of the corporation, you may request a review of the Payment Order if you do not agree with the decision. To do this, you must make a request to the Labour Program, in writing and with reasons, within 15 days after the Labour Program served the order.

As the employer or the director, you must also include:

  • a full payment for the amount indicated in the Payment Order or a Letter of Credit in lieu of payment, and
  • the applicable administrative fees

Upon completion of the review, the Labour Program can confirm, vary or rescind the Payment Order.

If you do not agree with the review decision of the Payment Order, you may request an appeal at the Canada Industrial Relations Board (CIRB). You must make the request to the CIRB, in writing and with reasons, and within 15 days after the Labour Program served the order. The CIRB can only hear the appeal if it based on a question of law or jurisdiction.

Note that the Labour Program may refer some requests for review directly to the CIRB to be heard.

Failure to comply with an Order may result in an administrative monetary penalty.

Claims against a debtor

The Labour Program may issue a written Order up to the amount stated in the Payment Order to:

  • debtor of employers, or
  • debtor of corporate director

If this is the case, the debtor will be required to pay the amount within 15 days of receipt of such an order.

Filing in Federal Court

As an employee, you can register a Payment Order or any other Order issued by the Labour Program in the Federal Court of Canada. Following court proceedings, the order could be upheld as a court judgment.

Once a Payment Order or any other Order is filed in the Federal Court, the statutory authority of the Labour Program ends. This means that the Labour Program no longer has the authority to enforce the Payment Order or the Order. For more information, visit the Federal Court website.

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