Administrative Monetary Penalties - Canada Labour Code, Part IV - IPG-106

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Overview

This policy sets out national guidelines of Part IV of the Canada Labour Code (Code) and Administrative Monetary Penalties (Canada Labour Code) Regulations. Both came into force on January 1, 2021.

The Administrative Monetary Penalty (AMP) system allows for the issuance of monetary penalties. An AMP can deter non-compliance with requirements under Part II and Part III of the Code and their associated regulations.

It is an additional tool to supplement current compliance and enforcement measures when they are ineffective or inappropriate in a particular situation.

The Labour Program can use AMPs alone. However, it is expected that they will operate in conjunction with the Code’s other compliance and enforcement tools.

All compliance and enforcement tools including the AMP should be considered at all times during the compliance and enforcement process.

Consideration for prosecution will be given prior to issuing a Notice of Violation (NoV). A NoV is the legal instrument used to impose an AMP.

Addressing any contravention as a violation under Part IV of the Code (the AMP) precludes proceeding with the same contravention as an offence (prosecution) under:

Objectives

The objectives of this document are to:

Administrative monetary penalties model

Where the Labour Program identifies non-compliance, the AMP process will typically follow:

Current policy provides reasonable timeframes at every stage of the compliance process to allow the employer to achieve compliance before escalation.

Concepts for an AMP

Education and awareness

Support to improve understanding and compliance with the Code is provided through:

In most circumstances, the Labour Program will provide information and awareness of the requirements of the Code prior to imposing an AMP.

Enforcement of the Code

Enforcement of the Code and its regulations is done through a variety of existing time-specific compliance methods. For further information, see the Compliance Policy for Part II of the Code and Employer Compliance for Part III of the Code. The Labour Program can use an AMP as:

Enforcement tool

Violation

The Labour Program may impose an AMP for a violation of a:

Person or department

Reasonable grounds to believe a violation occurred

A designated official who has reasonable grounds to believe that a violation occurred may issue a NoV containing an AMP to:

Responsibilities for compliance

Regulated parties are responsible for understanding and complying with all applicable legislative requirements under which they operate. Where non-compliance with legislation and regulations is identified and compliance methods have failed, enforcement actions taken are meant to be fair, impartial and transparent.

The onus is on the employer to ensure compliance with the Code at all their workplaces, when applicable.

Administrative monetary penalties process – General principle

This Interpretation Policy Guideline outlines the general AMP process on the following diagram that shows the progression to an AMP or prosecution. Depending on the circumstances of the contravention(s), the Labour Program may use various interventions and compliance activities within specified timeframes.

1. Education and enforcement

Work continues with employers to:

Where non-compliance continues despite these measures, the Labour Program will consider an AMP to deter further non-compliance.

2. Non-compliance with provisions of the Code

In most cases, non-compliance with the Code and its regulations will follow the general AMPs process. Typically, the Labour Program will reserve AMPs, barring some exceptions, for continued, recurring or systemic non-compliance despite attempts at attaining voluntary compliance.

3. Review and appeal

Completion of any review or appeal of a compliance order or direction, if applicable, must be completed before escalation to an AMP. This is the next step of the compliance and enforcement process.

AMP phased-in approach

The Labour Program will impose AMPs with respect to type A (administrative in nature) violations of Part II and Part III of the Code as of January 1, 2022. This will allow time for education, awareness and compliance.

Limitations

AMPs process – General principle diagram

The following diagram provides an overview of the AMPs process for Part II and Part III of the Code:

General principle diagram

Exceptions to the general principle of the AMPs process

AMP by exception

In certain circumstances the Labour Program can impose an AMP by exception to the AMPs Process general principle. There are examples listed below.

AMP by exception means that the Labour Program may issue a NoV immediately or without proceeding through the full AMPs Process general principle in response to a particular violation.

These AMPs by exception:

Compliance tools such as the following under Part II and Part III of the Code are intended to address the non-compliance and are remedial in nature:

The AMP is an intermediate enforcement tool to further encourage compliance and falls between compliance measures and prosecution. It may be used when prosecution is not appropriate.

Examples of AMP by exception

The following examples include some instances in which the Labour Program may impose an AMP by exception:

Exceptions to the general principle of the AMPs process – Labour standards

The following are instances where AMPs may be levied by exception to the AMPs Process – General Principle.

Labour Standards – Part III of the Code (References to the Code sections, sub-sections or Canada Labour Standards Regulations are included in brackets.)

Exceptions to the general principle of the AMPs process – Occupational health and safety

The following are instances where AMPs may be levied by exception to the AMPs Process – General Principle.

Occupational Health and Safety – Part II of the Code (References to the articles or paragraphs of the Code and pursuant Occupational Health and Safety Regulations are included in brackets.)

Record keeping and reporting provisions

Notice for information

Exceptions to the general principle of the AMPs process – Labour standards and occupational health and safety

The following are instances where AMPs may be levied by exception to the AMPs Process – General Principle.

Part II and Part III of the Code (References to the Code sections or sub-sections are included in brackets.)

Repeated/Continuing non-compliance

If the person or department was previously non-compliant with the Code or its regulations, the Labour Program may escalate enforcement action if non-compliance with the same provision is repeated within 5 years or if continued. No further (or repeat) assurance of voluntary compliance, direction or compliance order may be written if the circumstances are the same or similar to the initial non-compliance.

The repeated/continued non-compliance could be at the same workplace or at any other workplace operated by the employer.

Example

If an assurance of voluntary compliance was previously signed for a certain provision, a repeated or continuing contravention regarding the same provision may result in a compliance order, without issuing another assurance of voluntary compliance.

If a direction or compliance order was previously issued for the same provision, a repeated or continuing violation regarding the same provision may result in a NoV, without issuing another direction or compliance order.

Transitional provision

Compliance is an ongoing process. Therefore, the Labour Program can use the AMP process if the violation:

If, prior to coming into force of Part IV of the Code, non-compliance with a provision of the Code or its regulations was determined and compliance tools were applied then once it is confirmed that non-compliance with a provision has continued after January 1, 2021, the Labour Program may use further compliance tools to address the issue, including a NoV.

Classification of violations: A, B, C, D and E

The Administrative Monetary Penalties (Canada Labour Code) Regulations prescribes the classification of each violation using a scale from A to E.

Classification of violations under Part II

Classification A

Related to administrative provisions (See Appendix A).

Classification B

Related to low-risk hazards that may result in a minor injury or illness that requires medical treatment but that do not result in disabling injuries.

Classification C

Related to medium-risk hazards that may result in a serious injury or illness that prevents an employee from effectively performing their regular work duties.

Classification D

Related to high-risk hazards that may result in serious injury or fatality. Non-compliance with a direction. Non-compliance with an order from the Canada Industrial Relations Board.

Classification E

Involves immediate life-threatening hazards or hazards known to cause latent occupational disease. These hazards give the employee little to no opportunity to avoid or minimize severe injury or death or occupational disease

Classification of violations under Part III

Classification A

Related to administrative provisions (See Appendix A).

Classification B

Related to the calculations and payment of wages and other amounts.

Classification C

Related to leave or other requirements which could have an impact on financial security or health and safety of:

Classification D

Related to the employment and protection of employees under 17 years of age in accordance with s. 179 of the Code and s. 10 of the Canada Labour Standards Regulations. Non-compliance with a compliance order. Non-compliance with a payment order. Non-compliance with specified orders from the Canada Industrial Relations Board. Non-compliance with conditions of a ministerial permit.

Classification E

N/A

Base penalties amount

The following is the base penalty amount per size of business and classification.

Classification of Violation Individual Micro Business <5 Employees Or < $30,000 in annual gross revenues Small Business <100 Employees Or < $5 million in annual gross revenues And is not a micro business Large Business/ Department 100 + Employees And is not a micro or small business
A $200 $250 $500 $2,000
B $500 $750 $1,500 $6,000
C $1,000 $1,500 $3,000 $12,000
D $2,000 $3,500 $7,000 $25,000
E $4,000 $7,500 $15,000 $50,000

Size of business

Calculations for each AMP is based on the size of the employer as a whole, including all of its workplaces. The Labour Program determines size of business primarily based on the number of employees. The Labour Program will consider information on annual gross revenue, if required.

Employers categorized as individuals

Federal Ministers and sole proprietorships will be considered employers and categorized as an Individual for calculating the base penalty amount.

Calculation of the penalty amount – Base amount

AMP amount – First penalty

The Labour Program will calculate the total amount of the AMP using:

Calculating base penalty amount

Step 1

Identify the provision(s) of the Code and/or associated regulations contravened. Then locate the violation classification(s) in the Administrative Monetary Penalties (Canada Labour Code) Regulations.

Result: Violation A, B, C, D, or E identified for each violation.

Step 2

Identify the size of the person or department.

Result: Individual, micro business, small business or large business/department identified

Step 3

Determine the penalty amount using the violation(s) classification identified and the size of the person or department from the base penalties amount.

Result: Penalty amount of the AMP determined. A single NoV could include several individual violations calculated separately and added together for the total AMP amount

Calculation of the penalty amount – Subsequent penalties

AMP amount – Subsequent penalties

The Labour Program will calculate a subsequent AMP with an additional amount, an aggravating factor, if there is a history of non-compliance as follows:

Step 1

Using the methodology from the calculation of the penalty amount – base amount, determine the base penalty amount.

Result: Base penalty amount identified

Step 2

Add to the base penalty amount an additional amount of 2 times the base penalty amount as an aggravating factor when there is a history of non-compliance. A person or department has a history of non-compliance when, within the 5 years preceding the day on which the Labour Program issues a NoV they:

Result: The aggravating factor = base penalty amount multiplied by 2

Total penalty = base penalty amount + aggravating factor

Thus, where there is a history of non-compliance the total amount for any subsequent AMP to the same person or department will be 3 times the base penalty amount.

Coming into force

The Labour Program will consider prosecutions under Part II of the Code, finalized before January 1, 2021

as history of non-compliance in the calculation of a subsequent AMP.

Contents of a NoV

A NoV includes the following:

To person or department

The name of the person, business (including legal and/or common name, if applicable) or department that is alleged to have committed the violation. Address where the NoV is served.

Violation (where applicable, the Labour Program will attach copies of directions, orders or permits to the NoV)

Short form description and relevant facts to describe the contravention and the failure to comply. Non-compliance with:

Calculation

Calculation of the AMP, including an aggravating factor, if applicable; and the total amount of the AMP.

Disagree with the penalty

Information on:

Payment

Information about:

No action

Statement that where the penalty is not paid and a review or appeal is not requested, then the violation is considered to have been committed. The person or department is liable for the penalty set out in the NoV. The violation will also be used as a history of non-compliance potentially adding the aggravating factor to any AMP in the future.

Publication

Information about publication.

Further information

Name and telephone number of the contact person from the local office who identified the violation(s) that gave rise to the NoV. For example, the:

Who issued the NoV

Name and title of who issued the NoV:

Who could receive a NoV

Every person or department could be issued a NoV if they violate or fails to comply with a designated:

This includes:

This also includes private sector employers that fall under:

Generally, an AMP will be imposed on employers and departments. Imposing an AMP on an employee would be rare and is reserved for:

The Labour Program may issue a NoV to anyone who directed, authorized, assented to, acquiesced in or participated in the commission of the violation.

This includes:

Whether an individual and/or an employer would receive an AMP would be determined based on the evidence obtained during an investigation or an inspection.

Issuance of a NoV to employer

The Labour Program will issue an NoV where an AMP is determined necessary. They will issue it to the employer legally responsible for the workplace at which the violation occurred.

Some contraventions of the Code are local in nature and specific to that workplace location. Therefore the failure to comply in one workplace may not apply in all the other workplaces.

Other contraventions of the Code may not be local in nature. As such, it is expected that the employer will address non-compliance at all workplaces including the workplace where the contravention was discovered. This will normally be indicated in the assurance of voluntary compliance, compliance order or direction.

If non-compliance with the same provision is detected, it may be deemed a violation subject to an AMP. This includes if the non-compliance (continued or re-occurring) occurred at the same workplace, or a different workplace of an employer.

If there is further non-compliance of the same provision of the Code, the Labour Program may:

The application of history of non-compliance, may include non-compliance at any workplace of the employer (employer as a whole).

Service of the NoV will be done in accordance with s. 8 of the Administrative Monetary Penalties (Canada Labour Code) Regulations.

If the Labour Program issues an employer a NoV with respect to a violation under Part II of the Code, the employer must, without delay, give a copy of the NoV to the:

Who issues a NoV

The Head of Compliance and Enforcement:

The issuance of the NoV has been designated to the:

Oversight on AMP issuance

A centralized Labour Program team of experts will provide guidance and oversight for all AMPs issued. This will ensure accuracy and consistency and build knowledge and history.

Variation or cancellation of the NoV

At any time before a request for review in respect of a NoV comes before the Head of Compliance and Enforcement, or delegate, the person who issued the NoV may:

Payment of an AMP

Payment of an AMP will be made to the Receiver General for Canada to the address indicated in the NoV.

Early payment of the AMP within 20 days

If the penalty is paid within 20 days after the Labour Program serves the NoV, the penalty amount for any type A, B, or C classification violation will be reduced by 50%. For example, a $200 penalty for an A-classification violation is reduced to $100 if paid within 20 days after the Labour Program serves the NoV.

Full payment

Full payment is required within:

Method of payment

You must make payment to the Receiver General for Canada. You may pay them by:

Payment made

Once a person pays the AMP, that person will be considered to have committed the violation. All proceedings (review and appeal) in respect of the NoV will no longer be available or will end if already underway.

Failure to act

A person or a department is considered to have committed the violation and are liable for the full penalty if they do not:

Publication

Employers to whom the Labour Program issues a NoV for a type B to E violation will have their name published. Publication is indefinite unless the employer pays the AMP and achieves compliance with the provision that gave rise to the AMP. Once the employer achieves both, publication will remain for an additional 2 years.

Recovery of an AMP

All unpaid AMPs will be referred to the Canada Revenue Agency for collection.

Limitations – Recovery of penalties

No recovery of a penalty can be initiated beyond 5 years after the penalty became payable.

Request for review of the NoV

A person or a department that is served with a NoV may make a request for review. This must be done within 30 days after the day the notice is served. It must be in writing, including a statement of the grounds for review.

In exceptional circumstances the Head of Compliance and Enforcement, or delegated official may accept a request for review beyond the specified 30-day period. Reasons must be provided to substantiate the request along with supporting evidence.

The Head of Compliance and Enforcement, or delegated official, will decide if a request for review received beyond the specified 30-day period is accepted. They will inform the party in writing.

Payment of the AMP is not required to request a review of the NoV.

Grounds for the review

Detail in writing to substantiate the grounds for the review request of either:

For instance, they may explain:

Conducting the review after acceptance by the Head of Compliance and Enforcement or delegated official

The AMP Review Unit under the Workplace Directorate of the Labour Program will determine whether the request is to be treated as:

Treated as a review

If the Labour Program makes a decision to treat the request as a review, they will review the NoV.

Treated as an appeal

If the Labour program makes a decision to treat the request for review as an appeal, they will forward it to the Canada Industrial Relations Board.

Review-decision made

After the review has been completed:

Distribution of decision (Part II of the Code)

If a review decision is made with respect to a NoV under Part II of the Code, the employer must, without delay, give a copy of the decision to the:

Appeal of the review decision

Following a review decision, a person or a department to which the Labour Program issued a NoV may appeal the review decision:

Outcomes of the appeal

The Canada Industrial Relations Board is to determine:

If the Canada Industrial Relations Board determines that the amount of the penalty for the violation was not determined in accordance with the Administrative Monetary Penalties (Canada Labour Code) Regulations, they are to correct the amount of the penalty.

In accordance with the legislation, the Canada Industrial Relations Board shall provide its decision in writing, with reasons, to the appellant. They will also provide a copy of the decision to the Head of Compliance and Enforcement or its delegate.

If the NoV is upheld, the decision and the order will stipulate the due date for the payment of the penalty amount.

Where the Canada Industrial Relations Board cancels the NoV, no payment will be required.

Distribution of appeal decision (Part II of the Code)

If an appeal decision is made, with respect to a NoV under Part II of the Code, the employer must, without delay, give a copy of the decision to the:

Employee who attends an appeal hearing

Employees summoned to appear at an appeal proceeding at the Canada Industrial Relations Board are entitled to be paid their regular rate of wages by their employer for time spent at the proceedings that would otherwise have been time at work (s.10 of the Administrative Monetary Penalties (Canada Labour Code) Regulations).

Public naming for Part IV of the Code

An employer who has committed a violation for which a NoV was served will be publically named.

The following general principles have been established to allow for the public naming of employers and departments:

Publication

The following are contents and duration of the publication:

Once the employer makes a payment and there is confirmation that the employer corrected the contravention(s), the employer’s name will remain published for an additional 2 years. This will start from the date of correction or payment, whichever is later.

Terms and definitions

Administrative provisions

Classified as type A designated violations under Schedule 1 or 2 of the Administrative Monetary Penalties (Canada Labour Code) Regulations made under Part IV of the Code. (See Appendix A).

Administrative Monetary Penalties (AMP)

Aggravating factor

The additional amount added to an AMP when the violator has a history of non-compliance.

Assurance of voluntary compliance

The written commitment of the employer or employee to the Labour Program that the employer will voluntarily correct a situation of non-compliance within a specific period.

Canada Labour Code (Code)

Workplace legislation administered by the Labour Program.

Canada Industrial Relations Board

An independent, representational, quasi-judicial tribunal that is responsible for the interpretation and administration of Part I (Industrial Relations) and certain provisions of the Canada Labour Code:

Compliance history

Historical compliance data of an employer based on interventions and engagement with the Labour Program. For example:

Compliance order

A compliance tool issued by a labour affairs officer – labour standards, ordering an employer, in writing, to:

Non-compliance may result in the issuance of a NoV for a designated violation within Schedule II of the Administrative Monetary Penalties (Canada Labour Code) Regulations.

Designated official

Designated by the Head of Compliance and Enforcement to carry out duties under Part IV of the Code. This includes the issuance of NoVs. For the purposes of this document this refers to:

Department

Refers to:

Direction

A compliance tool issued by a health and safety officer, senior investigator or regulatory partner ordering an employer or employee, in writing, to:

Non-compliance may result in the issuance of an NoV for a designated violation within Schedule I of the Administrative Monetary Penalties (Canada Labour Code) Regulations.

Head of Compliance and Enforcement

Official designated by the Minister of Labour who is:

Hindrance or obstruction

Action that prevents reactive or proactive compliance and enforcement activity by the Labour Program in the workplace.

History of non-compliance (Administrative Monetary Penalties (Canada Labour Code) Regulations)

An aggravating factor that increases the penalty amount of an AMP. Where a person or department, within the 5 years preceding the day on which the Labour Program issued a NoV:

Individual

Natural persons, and includes: federal Minister and sole proprietorships.

Large business or department

A business with 100 or more employees that is not a micro business or a small business.

Micro business

A business with fewer than 5 employees or less than $30,000 in gross annual revenue.

Small business

A business, other than a micro business, with fewer than 100 employees or less than $5 million in annual gross revenue.

Notice of violation

A legal instrument that the Labour Program will serve on a person or department by a designated official who has reasonable ground to believe that they have a committed a violation under Part IV of the Code and the Administrative Monetary Penalties (Canada Labour Code) Regulations. Contains details about the violation and the AMP.

Offence

A contravention of any provision of Part II or Part III proceeded through a court of law and subject to a punishment on conviction by indictment or by summary conviction.

Payment order

An order issued by a labour affairs officer – labour standards, after an investigation or inspection, to an employer or a Director of a corporation, to pay wages or other amounts that are owed to an employee under Part III of the Code.

Person

Natural persons, or any word or expression descriptive of a person includes:

Legal persons under Part IV of the Code includes a corporation or a registered business.

Regulated parties

Regulatory partners (formerly extended jurisdiction)

Other federal government departments that carry out the administration and enforcement of the Code on behalf of the Labour Program for certain employees:

Systemic non-compliance

A pattern of repeated non-compliance:

Violations

Related Resources

Appendix A: list of administrative violations

Provisions that have been designated as type ‘A’ classifications, described as ‘administrative’, fall within the general categories. Examples within each category have been provided:

Part II

Recordkeeping provisions

Notification requirements

Requirements to post or provide information

Prescribed policy requirements

Prescribed reporting requirements (occurrence-based and annual reports)

Prescribed testing, inspection and written instructions

Part III

Recordkeeping provisions

Notification requirements

Requirements to post or provide information

Prescribed reporting requirements

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