Regulations Amending Certain Regulations Made Under the Canada Labour Code: SOR/2022-41
Canada Gazette, Part II, Volume 156, Number 6
Registration
SOR/2022-41 March 4, 2022
CANADA LABOUR CODE
P.C. 2022-196 March 3, 2022
Her Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to subsections 169(2) and 175(1) footnote a, section 181.3 footnote b, subsections 203(2) footnote c, 239.1(3) footnote d and (10)footnote d and 240(3) footnote e, section 245 footnote f, subsection 247.99(3) footnote g, section 247.992 footnote h, subsections 251.01(3) footnote i, and 252(2) footnote j and sections 264 footnote k and 270 footnote l of the Canada Labour Code footnote m, makes the annexed Regulations Amending Certain Regulations Made Under the Canada Labour Code.
Regulations Amending Certain Regulations Made Under the Canada Labour Code
Canada Labour Standards Regulations
1 Subsection 6(11) of the Canada Labour Standards Regulations footnote 1 is replaced by the following:
(11) If, during the averaging period, an employer lays off or terminates the employment of an employee whose hours of work are averaged under subsection (1), the employer shall pay the employee at the overtime rate of wages established under paragraph 174(1)(a) of the Act for any hours worked, but not previously paid, in excess of 40 times the number of weeks in the completed part of the averaging period.
2 Section 16 of the Regulations is replaced by the following:
16 If, in accordance with subsection 195(1) of the Act, any other day is substituted for a general holiday in a written agreement between the parties to a collective agreement, the written agreement shall contain the information set out in paragraphs 15(1)(a) to (e).
3 Subsection 19(6) of the Regulations is replaced by the following:
(6) For the purposes of subsections 177.1(1), 206.6(2), 206.7(2.1), 206.8(1), 210(2), 230(1) and 235(1), paragraph 240(1)(a) and subsection 247.5(1) of the Act, if an employee is engaged in multi-employer employment, that employee is deemed to be continuously employed.
4 Subsection 20(2) of the Regulations is replaced by the following:
(2) The regular hourly rate of wages for the purposes of paragraph 174(1)(a) and subsections 174(4) and (5), 197(1) and 205(2) of the Act may be the rate agreed on under a collective agreement that is binding on the employer and the employee.
5 (1) Paragraph 24(2)(l) of the Regulations is replaced by the following:
- (l) a copy of any certificate provided in respect of medical breaks or medical leave and any request for the certificate made by the employer in accordance with subsection 181.1(2) or 239(2) of the Act, and any notice of termination of employment or intention to terminate employment given in accordance with Division IX or X of the Act;
(2) Subsection 24(2) of the Regulations is amended by adding the following after paragraph (n.2):
- (n.21) a record describing any situation that an employee had to deal with under subsection 169.1(2) of the Act;
- (n.22) a record describing any situation that an employee had to deal with under subsection 169.2(2) of the Act;
(3) Paragraph 24(2)(n.4) of the French version of the Regulations is replaced by the following:
- n.4) un registre décrivant toute situation prévue au paragraphe 173.01(3) de la Loi à laquelle l’employé devait parer;
(4) Subsection 24(2) of the Regulations is amended by adding the following after paragraph (n.4):
- (n.41) a record describing any situation that an employee had to deal with under subsection 173.1(2) of the Act;
(5) Paragraph 24(2)(n.6) of the French version of the Regulations is replaced by the following:
- n.6) un registre décrivant toute situation prévue au paragraphe 174.1(3) de la Loi à laquelle l’employé devait parer;
(6) Paragraph 24(4)(b) of the Regulations is replaced by the following:
- (b) a copy of any certificate of a health care practitioner indicating that the employee is fit to return to work; and
6 The Regulations are amended by adding the following after section 24:
Certificate Referred to in Subsection 181.1(2) of the Act
24.1 A certificate issued by a health care practitioner under subsection 181.1(2) of the Act shall set out, in addition to the information required by that subsection, the dates of commencement and termination of the period in which the breaks needed for medical reasons are to be taken.
7 The Regulations are amended by adding the following after section 29:
Complaint for Unjust Dismissal
29.1 For the purposes of paragraph 240(3)(b) of the Act, the following circumstances are prescribed:
- (a) the making of a complaint under subsection 240(1) of the Act, if a complaint that is based on substantially the same facts was previously made under subsection 246.1(1) or 247.99(1) of the Act in accordance with subsection 246.1(3) or 247.99(2) of the Act, as the case may be, and that complaint was withdrawn; and
- (b) the making of a complaint under subsection 240(1) of the Act, if a complaint that is based on substantially the same facts of unjust dismissal was previously made under that subsection in accordance with subsection 240(2) of the Act and that complaint was withdrawn because it is incomplete or contains an error.
Complaint Related to Genetic Testing
29.2 For the purposes of paragraph 247.99(3)(b) of the Act, the following circumstances are prescribed:
- (a) the making of a complaint under subsection 247.99(1) of the Act, if a complaint that is based on substantially the same facts was previously made under subsection 240(1) or 246.1(1) of the Act in accordance with subsection 240(2) or 246.1(3) of the Act, as the case may be, and that complaint was withdrawn; and
- (b) the making of a complaint under subsection 247.99(1) of the Act, if a complaint that is based on substantially the same facts was previously made under that subsection in accordance with subsection 247.99(2) of the Act, and that complaint was withdrawn because it is incomplete or contains an error.
Complaint Referred to in Subsection 251.01(1) of the Act
29.3 A prescribed circumstance for the purposes of paragraph 251.01(3)(b) of the Act is the making of a complaint under subsection 251.01(1) of the Act, if a complaint that is based on substantially the same facts was previously made under that subsection in accordance with subsection 251.01(2) of the Act and that complaint was withdrawn because it is incomplete or contains an error.
8 Subsection 34(1) of the Regulations is replaced by the following:
34 (1) The employer’s obligation under subsection 239.1(3) of the Act begins on the date that, according to a certificate from the health care practitioner authorized by the plan the employer subscribes to under subsection 239.1(2) of the Act, the employee is fit to return to work with or without qualifications, and ends 18 months after that date.
Standards for Work-Integrated Learning Activities Regulations
9 Subsection 4(1) of the Standards for Work-Integrated Learning Activities Regulations footnote 2 is amended by striking out “and” at the end of paragraph (1) and by adding the following after paragraph (m):
- (n) any work schedule and modification of a work schedule that is provided in writing to the person by the employer; and
- (o) any refusal by the person made under subsection 173.01(2) of the Act.
10 Section 6 of the Regulations is amended by adding the following after paragraph (a):
- (a.1) section 24.1;
Administrative Monetary Penalties (Canada Labour Code) Regulations
| Item | Column 1 Provision |
Column 2 Violation Type |
|---|---|---|
| 52.1 | 24(2)(n.21) | A |
| 52.2 | 24(2)(n.22) | A |
| Item | Column 1 Provision |
Column 2 Violation Type |
|---|---|---|
| 54.1 | 24(2)(n.41) | A |
| Item | Column 1 Provision |
Column 2 Violation Type |
|---|---|---|
| 15.1 | 4(1)(n) | A |
| 15.2 | 4(1)(o) | A |
Coming into Force
14 (1) Subject to subsection (2), these Regulations come into force on the day on which they are registered.
(2) Sections 5, 6, 9, 10, 11, 12 and 13 come into force on the 90th day after the day on which these Regulations are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
The Canada Labour Code (the Code) was amended on September 1, 2019, to introduce provisions modernizing Part III of the Code and supporting work-life balance and flexibility in federally regulated workplaces. Some of these amendments necessitate consequential changes to the Canada Labour Standards Regulations, the Standards for Work-Integrated Learning Activities Regulations, and the Administrative Monetary Penalties (Canada Labour Code) Regulations. The Regulations Amending Certain Regulations Made Under the Canada Labour Code (the Regulations) are required to support implementation of the new provisions and to ensure that they can be enforced. This includes establishing related record-keeping requirements, adjusting rules pertaining to complaints handling, and making other minor technical changes to align the regulations with the Code.
Background
Application of the provisions
Part III of the Code establishes basic labour standards (e.g. payment of wages, protected leaves) for persons employed in federal Crown corporations (but not the public service) and federally regulated private-sector industries, such as
- international and interprovincial transportation by land and sea, including railways, shipping, trucking and bus operations;
- airports and airlines;
- port operations;
- telecommunications and broadcasting;
- banks;
- industries declared by Parliament to be for the general advantage of Canada or of two or more provinces, such as grain handling and uranium mining; and
- First Nations Band Councils.
Part III of the Code does not apply to the federal public service.
All other workplaces, which make up over 90% of the Canadian workforce, are under provincial labour jurisdiction.
New amendments to the Code
Amendments aimed at modernizing Part III of the Code and supporting flexibility in the workplace were introduced in the Budget Implementation Act, 2017, No. 2 (Bill C-63), which received royal assent on December 14, 2017, and in the Budget Implementation Act, 2018, No. 2 (Bill C-86), which received royal assent on December 13, 2018.
Many of the changes included in Bill C-63 and Bill C-86 came into force on September 1, 2019. These include new hours of work provisions that require employers to provide their employees with at least 96 hours’ written notice of their work schedules; at least 24 hours’ written notice of shift changes or additions; an unpaid break of at least 30 minutes during every period of 5 consecutive hours of work; and a rest period of at least 8 consecutive hours between work periods or shifts. The Code provides exceptions to these provisions in the case of unforeseeable emergency situations.
In addition, the Code was amended to introduce unpaid medical breaks; expand the range of health care practitioners who can provide certificates with respect to medical-related matters; eliminate the minimum length of service requirement for entitlement to medical leave (and certain other leaves); allow the substitution of any day for a general holiday if certain conditions are met; permit the compensation of overtime work through time off in lieu of overtime pay; and allow time limits for filing unjust dismissal and genetic testing complaints to be extended in circumstances to be prescribed by regulation.
Consequential amendments are required to align certain regulations made under the Code with the new and amended Code provisions and to support their implementation. Other technical amendments are also required.
Administrative monetary penalties
On January 1, 2021, the new Part IV (Administrative Monetary Penalties) of the Code was brought into force to promote compliance with requirements under Part II (Occupational Health and Safety) and Part III (Labour Standards) of the Code. The Administrative Monetary Penalties (Canada Labour Code) Regulations (AMPs Regulations) designate and classify violations of provisions under the Code and all labour standards regulations, making them subject to an administrative monetary penalty (AMP) in cases of non-compliance. Only designated violations can be subject to an AMP.
Designated labour standards violations are listed and classified under Schedule 2 of the AMPs Regulations. When amendments are made to Part III of the Code and its associated regulations, Schedule 2 of the AMPs Regulations must also be amended to reflect any updates to obligations or provision.
The AMPs Regulations specify the method used to determine the amount of an AMP in a given situation when issuing the notice of violation. The baseline penalty amount applicable to a violation varies depending on the type of person or department believed to have committed a violation (referred to as “violator” for the purpose of this document) and the classification of the violation. Each designated violation is classified as either Type A, B, C or D, in order of increasing severity, according to the level of risk and/or the impact and significance of the violation, as outlined in Table 1.
| TYPE | PART III |
|---|---|
| A | Related to administrative provisions. |
| B | Related to the calculation and payment of wages. |
| C | Related to leave or other requirements, which could have an impact on financial security, or health and safety, of an individual or group of individuals. |
| D | Related to the employment and protection of employees who are minors. |
Amendments to the AMPs Regulations are needed to ensure that requirements set out in the Regulations can be subject to an AMP.
Objective
The primary objectives of the Regulations are to align certain regulations made under the Code with the new and amended Code provisions, to support the implementation of these amended Code provisions, and to ensure that the new AMPs regime can be used to promote compliance with these provisions.
Description
The Regulations introduce new record-keeping provisions, designate and classify violations of new record-keeping requirements as those which could be subject to an administrative monetary penalty, specify additional circumstances under which the deadline to file a complaint can be extended, and make other minor changes of a technical nature to ensure alignment with the Code.
New record-keeping provisions
The Regulations will require employers to keep records 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;
- had to either postpone or cancel the employee’s 30-minute break;
- had to require the employee to work additional hours which resulted in them having a rest period of fewer than 8 hours;
- a copy of any certificate from a health care practitioner related to an employee’s or student intern’s medical breaks and any employer request for such a certificate;
- every work schedule and modification of a work schedule that is provided to a student intern; and
- every refusal to work made by a student intern due to not receiving 96 hours’ written notice of their work schedule.
Moreover, the Regulations require that any certificate issued by a health care practitioner in relation to an employee’s medical breaks specify the beginning and end dates of the period during which the breaks are to be taken.
Designation of violations
As per the classification method outlined in Table 1 above, violations of existing record-keeping requirements are designated as Type “A” violations (related to administrative provisions) for the purpose of calculating the applicable administrative monetary penalty under Part IV of the Code.
To ensure consistency and enforceability, the Regulations will amend Schedule 2 of the AMPs Regulations to designate the new record-keeping requirements that are being introduced through these Regulations as Type “A” violations.
Extension of deadlines for complaints
Complaints made by employees to the Labour Program’s Head of Compliance and Enforcement (the Head) must be made within the applicable period prescribed by the Code.
The Regulations will allow the Head, or a delegated official
- to extend the six-month deadline for filing a monetary or non-monetary complaint if this is required to correct an error made in an initial complaint that was filed within the statutory time limit; and
- to extend the 90-day deadline for filing an unjust dismissal or genetic testing complaint if the complaint was filed within the statutory time limit under the wrong complaint category. An extension could also be granted if this is required to correct an error made in an initial unjust dismissal or genetic testing complaint that was filed within the statutory time limit.
Minor technical changes
The Regulations will also
- correct references to the section of the Code that concerns overtime pay, as this section has been divided and renumbered;
- adjust language to reflect recent amendments to the Code that allow a general holiday to be substituted with any day rather than another holiday;
- replace the term “sick leave” with “medical leave” and the term “qualified medical practitioner” with “health care practitioner” to reflect changes of terminology in the Code; and
- remove references to certain leave types with respect to which an employee engaged in multi-employer employment is deemed to be continuously employed, given that there is no longer a minimum length of service requirement to qualify for these leave types.
The Regulations that were prepublished in the Canada Gazette, Part I, on June 26, 2021, contained a provision to remove a reference to Division XIII (medical leave) of the Code in section 29 of the Canada Labour Standards Regulations (CLSR). This section of the CLSR specifies absences that do not interrupt an employee’s continuity of employment.
The proposed housekeeping amendment reflected the fact that there is no longer a minimum length of service requirement to qualify for unpaid medical leave.
However, An Act to amend the Criminal Code and the Canada Labour Code (Bill C-3), which received royal assent on December 17, 2021, provides for a new medical leave of absence with pay in Division XIII, with leave entitlement based on the length of the employee’s continuous employment.
As a result, the reference to Division XIII should no longer be removed from section 29 of the CLSR because it is required to implement the new paid medical leave under Bill C-3.
Regulatory development
Consultation
In developing the Regulations, the Labour Program consulted with stakeholders comprised of employer and employee representatives, union representatives, national Indigenous organizations, and industry experts. Consultations for these Regulations were part of broader consultations on the new hours of work provisions held during the summer of 2019.
Six industry-specific technical meetings — broadcasting and telecommunications, air transportation, rail transportation, postal and courier services, road transportation and marine sector (pilotage, marine transportation and longshoring) — were held with a total of 68 employer groups and 25 labour and community organizations in attendance. Written submissions were received from 65 stakeholder groups.
Stakeholders were invited to participate in information sessions and consultation meetings between May and August of 2019. They were also invited to provide written comments on a discussion paper that was circulated on May 20, 2019, for a five-week comment period. Submissions received were focused almost entirely on exemptions from and modifications to the new hours of work provisions, as this was the key concern for stakeholders at the time.
Of the comments received relating to record-keeping requirements and definitions, the majority of stakeholders expressed support for regulatory amendments that would provide clarity and support the implementation of the new provisions.
Prepublication in the Canada Gazette, Part I
As previously noted, the Regulations were prepublished in the Canada Gazette, Part I, on June 26, 2021. Following the 30-day consultation period, two submissions were received. The first was from the Canadian Bankers Association (CBA) with respect to the record-keeping provisions. The CBA requested that the coming-into-force date be delayed to permit an implementation period of 18 months. As a result, the coming-into-force date was changed from the date of registration of the Regulations to 90 days after the date of registration. The second submission was from the International Longshore and Warehouse Union Canada (ILWU). During the consultations, ILWU expressed support for the record-keeping provisions and the technical amendments proposed in the Regulations. ILWU suggested extending the 90-day deadline for filing genetic testing complaints if an error was made in the initial complaint. The Regulations will allow for such an extension, and therefore, no adjustments are required. ILWU also took the opportunity to discuss the new labour standards provision added to the Code in September 2019. ILWU expressed its dissatisfaction with these changes, stating that exemptions reduce the impact of the hours of work provisions. These comments were noted by the Labour Program, but are outside the scope of this regulatory initiative.
The Labour Program received an additional comment after the 30-day consultation period from the Federally Regulated Employers in Transportation and Communications Organization (FETCO). It expressed concern that the record-keeping provisions would be difficult to implement in an environment where not all schedules are provided in writing. FETCO also expressed concern regarding the administrative burden associated with the regulatory proposal, especially during certain peak periods where a number of minor last-minute changes to employee schedules can be made to ensure that service failures for customers remain at a minimum. This comment is directly related to the “unforeseeable emergencies” clause of the new record-keeping provision. To address this, FETCO asked that details be provided on what type of information should be kept in order to maintain compliance with record-keeping provisions. In response, the Labour Program is considering improvements to the online information provided to clarify record-keeping requirements.
Modern treaty obligations and Indigenous engagement and consultation
In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, a modern treaty implications assessment was conducted. There have been no impacts on modern treaties identified in relation to these Regulations. However, as on-reserve Indigenous employers and employees are affected by the Regulations, Indigenous stakeholders were invited to participate in the consultation and information sessions held during the summer of 2019, and, as a result, the Labour Program received one submission from an Indigenous organization, the Ontario Federation of Indigenous Friendship Centres. This submission focused mainly on aspects of the new legislation other than hours of work provisions.
Instrument choice
The Regulations are consequential in nature and intended to align existing regulations with the new and amended Code provisions. Consequently, there are no new instruments under consideration.
The Regulations will provide important tools to ensure compliance and enforcement are consistent with existing record-keeping requirements that are already specified under the Canada Labour Standards Regulations and the Standards for Work-Integrated Learning Activities Regulations.
Regulatory analysis
The Regulations will be administrative in nature, requiring employers to keep records of various provisions, and will affect, per year, approximately 19 000 employers, 950 000 employees working in federally regulated sectors, and 1 300 unpaid interns. The associated regulatory impacts on employers and employees are expected to be of low impact.
Benefits and costs
The Regulations are estimated to result in present value costs of approximately $7.5 million for the 10-year period of full implementation (2023–2032), in addition to a partial year of implementation in 2022. The postponement of the implementation to mid-year 2022, compared to the immediate coming into force foreseen at the time of prepublication, results in a decrease of $0.4 million in the discounted present value, since the anticipated costs will be incurred further in the future. This estimate corresponds to an annualized value of approximately $1.1 million. The benefits associated with the Regulations were not monetized. They are described qualitatively.
The Regulations will provide the information needed for Labour Program officers and inspectors to better monitor compliance with the provisions and support enforcement activities when necessary. The Regulations will also bring clarity and contribute to the effective implementation of the legislative provisions already in force by defining certain terms. It will establish additional record-keeping requirements for employers under the federal jurisdiction to ensure the benefits of the legislative provisions are fully realized. Employers will incur a one-time cost to learn about the new administrative requirements and incur ongoing costs associated with the new record-keeping requirements of the Regulations.
By specifying the record-keeping operational details for implementation, the regulatory changes are expected to support the measures introduced by Bill C-63 and Bill C-86 for employees to achieve better work-life balance through greater predictability of working hours, break periods and processing of complaints, which will also benefit employers through increased productivity, decreased absenteeism, enhanced recruitment and retention, and more effective workforce utilization. Better record keeping of employee information will ease the burden on employers during inspections, and will improve the Labour Program’s ability to monitor and enforce legislation.
Assumptions
It is assumed that the new record-keeping requirements will require a combination of both a management representative for approving and explaining the decision-making rationale, a legal advisor and an administrative clerk for processing and maintaining the record. It is assumed that an employer will delegate an administrative clerk to perform these record-keeping activities, who will spend five minutes, on average, to maintain each additional record. The 2018 values of the average hourly wage rate, inflated to 2020 using the Consumer Price Index, for an administrative clerk, a legal professional, and a member of management in the federal jurisdiction were used, in addition to a 25% overhead rate. Furthermore, the populations of both federally regulated employers and employees are assumed to increase by about 0.92% and 0.91% per year, respectively. Unless stated otherwise, all costs are expressed in present value (2020 Canadian dollars, a 7% discount rate, and a 2021 discount base year) over the 10-year period of full implementation (2023–2032) and half-year of implementation in 2022 following introduction of the Regulations.
Learning about new administrative requirements (one-time costs)
Employers will need to familiarize themselves with new record-keeping requirements prescribed in the Regulations when they come into force. It is assumed that each employer in the federal jurisdiction will require management, legal counsel and administrative employees to spend, on average, 90 minutes to learn about the new requirements and implement them within their business accordingly. This one-time activity will cost employers an estimated $847,489 over the 10-year period.
Record-keeping requirements
Exception to eight-hour rest period
It is not expected that serious situations unforeseeable by employers will arise frequently in the workplace, for which employees will be expected to work hours in addition to their scheduled work periods, nor will employers require them to have a rest period shorter than eight consecutive hours between their work periods. When there is an exception to the current minimum eight-hour rest period for employees, a record will need to be kept. In these situations, it is estimated that a management representative will, on average, allocate one minute to provide a reason for the situation and an administrative representative will allocate four minutes to process and file each request. It is estimated that 5% (47 685) of employees in the federal jurisdiction per year may find themselves in a situation that presents an exception to the minimum eight-hour rest period provision. Total anticipated costs amount to approximately $1,164,291 over the 10-year period of full implementation, and half-year in 2022.
96 hours’ notice of a work schedule
A record-keeping requirement outlining a minimum 96 hours’ notice for an employee’s work schedule was included in the Regulations Amending the Canada Labour Standards Regulations that came into force in June 2019. The Regulations will extend existing coverage of that provision to include unpaid interns working in the federal jurisdiction. It is estimated that this new requirement will affect unpaid interns in the federal jurisdiction, requiring employers to allocate an additional five minutes for each record. An additional five minutes is estimated to record instances of interns that refuse to work in cases employers deem to be exceptional cases, due to a lack of 96 hours’ of notice. Total anticipated costs are estimated to be approximately $30,009 over the 10-year period of full implementation, and half-year in 2022.
Exception to 24 hours’ notice of a shift change
Records outlining a minimum 24 hours’ notice of any shift change for employees are already being kept by employers in the federal jurisdiction. Employers will now be required to keep a record explaining the situation that made it necessary to add or modify a work period with less than 24 hours’ notice, why it could not have been reasonably foreseen and the nature of the threat it posed. In these situations, it is estimated that, on average, a management representative will allocate one minute to provide a reason for the situation and an administrative representative will allocate four minutes to process and file each request. It is estimated that 5% (47 685) of employees in the federal jurisdiction per year may find themselves in a situation that presents an exception to the minimum 24 hours’ notice of shift change provision. Total costs are anticipated to amount to approximately $1,164,291 over the 10-year period of full implementation, and half-year in 2022.
Medical breaks
Records outlining additional medical breaks for employees are already being kept by employers in the federal jurisdiction. Existing certificates will now require additional information outlining the period of time in which the breaks will be required. This will introduce additional costs to employers in order to retain and access this information on request. In theory, the action of requiring additional information may constitute an additional burden to health care practitioners and the health care system. It is estimated that health care practitioners may take additional time to complete the existing forms, though it is assumed to be at no additional cost. Generally, prices charged by health care practitioners are a flat fee per completed duty and it will be inaccurate to assume a rise in price due to a small additional amount of information required on a certificate. It is estimated that this new requirement will affect 10% (95 370) of employees and 10% (132) of unpaid interns in the federal jurisdiction per year, requiring employers to allocate an additional two minutes for each record. Total anticipated costs are estimated to be approximately $779,095 over the 10-year period of full implementation, and half-year in 2022.
Postponed or cancelled break
The Regulations will introduce record-keeping requirements pertaining to instances in which employers postpone or cancel a break, which will introduce additional costs to employers related to retaining and accessing this information on request. In these situations, it is estimated that an administrative representative will allocate five minutes to process and file each request. It is estimated that this component will affect, on average, 20% (190 740) of employees in the federal jurisdiction per year, requiring employers to allocate five minutes for each record. Total anticipated costs amount to approximately $3,895,474 over the 10-year period of full implementation, and half-year in 2022.
Extension to the deadline for filing complaints
Employees make labour standards complaints to the Labour Program’s Head of Compliance and Enforcement. In some cases, these complaints can have missing or incomplete information, be filed under the wrong category of complaint, or contain errors. In these particular situations, the complaint must be resubmitted with the required additional or corrected information. This can be problematic if the applicable time limit for submitting the complaint has lapsed. The new regulatory authority extends the time to file a complaint to be as long as necessary in situations where a complaint is withdrawn and resubmitted for the same event because there was information missing in the original complaint or it contained an error. In the absence of direct information on the number of complaints that are deemed inadmissible for these reasons, it is assumed that an average of one case per month will fall under this category once in place, requiring processing time by administrative and operational support personnel, management review and executive approval. It is anticipated that the cost to the Government of Canada of extending the window to process these claims will amount to $13,707 over the 10 years of full implementation, and half-year in 2022, following introduction of the Regulations.
Government of Canada updates to operational materials and training
Costs will be incurred by the Labour Program to develop and provide training materials for Labour Program officers conveying the changes in regulatory requirements for record keeping. Educational materials will be prepared by the Labour Program and conveyed to personnel via operational training and updates to guidance material. The total of these transition costs is anticipated to be $906, and will be incurred in the year of implementation.
Summary
The following table summarizes the cost-benefit analysis.
Cost-benefit statement
- Number of years: 11 (from 2022 to 2032)
- Base year for costing: 2020
- Present value base year: 2021
- Discount rate: 7%
| Impacted stakeholders | Description of costs | Total (present value) | Annualized value |
|---|---|---|---|
| Employers — legal, managerial and HR/administrative personnel | Learning about new record-keeping requirements | $847,489 | $113,018 |
| Employers — HR/administrative personnel | Exceptions to 8-hour rest period | $1,164,291 | $155,266 |
| Employers — HR/administrative personnel | Exceptions to 24 hours’ notice of a shift change | $1,164,291 | $155,266 |
| Employers — HR/administrative personnel | Additional medical breaks | $779,095 | $103,898 |
| Employers — HR/administrative personnel | 96 hour’s notice in writing of work schedule | $30,009 | $4,002 |
| Employers — HR/administrative personnel | Postponed or cancelled break | $3,895,474 | $519,488 |
| Government of Canada | Extension of window for employees to pursue complaints / updates to guidance material and training | $13,707 | $1,828 |
| Government of Canada | Updates to guidance material and training | $906 | $121 |
| All stakeholders | Total costs | $7,895,262 | $1,052,888 |
| Impacted stakeholders | Requirements | Benefits description |
|---|---|---|
| Employees | Keeping records of
|
Employer record keeping will provide the Labour Program with the information required to monitor compliance with the provisions and support enforcement activities. Record keeping will also ensure that the legislative measures to provide employees with access to predictable scheduling and breaks are implemented in a traceable and effective manner by employers. These Regulations will require the demonstration of tangible evidence that employers comply with the legislated break requirements, and that exceptions are limited only to circumstances that can be formally documented and deemed to be acceptable justifications for non-compliance, thereby limiting the use of exceptions. The record-keeping measures will thereby ensure that the benefits of the legislative measures are fully realized by enhancing the consistency of their application, thereby facilitating the goal of allowing employees better work-life balance, rest, and take personal care. |
| Employers | Keeping records of
|
The requirement for employers to document and justify the need to bypass break requirements will help ensure employees miss breaks only in cases that can be justified under the allowable exceptional cases. This will thereby ensure that employees are better rested, resulting in lower instances of workplace injury and burn out, while also facilitating higher rates of productivity, decreased absenteeism, enhanced recruitment and retention, and more effective workforce utilization. |
| Employees | Extension to complaint filing period | This measure will ensure employees who have made a good faith or clerical error when filing a complaint are able to refile their complaint after the applicable statutory deadline has lapsed, provided the original complaint was filed on time. |
Small business lens
The majority of employers in the federal jurisdiction are small business owners (17 858 in 2021). The Regulations will have cost implications for small businesses, thus triggering the small business lens. The one-time cost for training employers about new record-keeping requirements will result in additional cost impacts (administrative costs). By applying the ratio of small to medium and large businesses in the federal jurisdiction to the cost estimates above, the cost implications of these Regulations on small businesses are estimated to be $7,505,269 or $416 per business over the 11-year period, in present value terms.
An alternate approach considered was for the Government of Canada to develop a standardized form to keep records of the various activities required under the Regulations. However, the many situations to be covered among the diverse employers in the federal jurisdiction will require a cumbersome form, whereas individual employers (including small businesses) could develop their own record-keeping methods to suit their particular contexts. Additional flexibility for small businesses could not be provided without exempting small businesses from record-keeping requirements. However, this will be expected to make compliance and enforcement with the new legislative provisions challenging, jeopardizing employees’ rights to those provisions. Given these considerations, the requirements will apply in the same way for all businesses.
Small business lens summary
- Number of small businesses impacted: 17 858
- Number of years: 11 (2022–2032)
- Base year for costing: 2020
- Present value base year: 2021
- Discount rate: 7%
| Activity | Annualized value | Present value |
|---|---|---|
| Total administrative costs | $1,000,880 | $7,505,269 |
| Costs per impacted small business | $56 | $416 |
One-for-one rule
The one-for-one rule applies since there is an incremental increase in administrative burden on business and the Regulations are considered an “IN” under the rule. These Regulations impose additional administrative requirements on employers to retain certain records and will trigger the one-for-one rule under Element A, which requires regulatory changes that impose new administrative costs on business to be offset with an equivalent reduction in administrative costs from the stock of regulations within 24 months (730 days). These Regulations will not trigger Element B of the one-for-one rule, as it will not introduce a new regulatory title to the Labour Program’s existing regulatory stock.
Employers in the federal jurisdiction are already required to keep some employment records, particularly around hours of work and flexible work arrangements. The Regulations will increase the administrative burden on Canadian businesses due to five new record-keeping requirements. Using the methodology developed in the Red Tape Reduction Regulations, it is estimated that the annualized administrative costs imposed on affected federally regulated employers will be $559,315 or $30 per business (2012 Canadian dollars, a 7% discount rate, and a 2012 present value base year) for the 10-year period (2023–2032).
Regulatory cooperation and alignment
The Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for these consequential regulatory amendments.
Implementation, compliance and enforcement, and service standards
Implementation
The Regulations will come into force 90 days after the date of registration.
The Labour Program will update all relevant publications to reflect the new regulatory requirements for employers and employees.
The Labour Program will also continue to update interpretation and guidance materials for employees and employers on their new rights and responsibilities, specifically to allow employers time to implement any necessary changes to their workplace policies and procedures. These materials are made available on the Canada.ca website.
Furthermore, Labour Program officers and inspectors will receive training on the new provisions prior to their coming into force in order to carry out their compliance and enforcement duties.
Compliance and enforcement
Labour Affairs officers will detect non-compliance with the new record-keeping requirements by conducting inspections, either proactively or in response to a complaint. Compliance will be achieved using a variety of approaches along a compliance continuum. This may include educating and counselling employers on their record-keeping obligations, seeking an assurance of voluntary compliance (AVC) from the employer, or issuing a compliance order to cease the contravention and take steps to prevent its reoccurrence. To address more serious or repeated offences and violations, an administrative monetary penalty under the new Part IV of the Code may be issued. To learn more about how AMPs may be issued, please consult the interpretations, policies and guidelines (IPG) document entitled Administrative Monetary Penalties - Canada Labour Code, Part IV - IPG-106.
Contact
Ourania Moschopoulos
Acting Director
Labour Standards and Wage Earner Protection Program
Labour Program
Employment and Social Development Canada
165 De l’Hôtel-de-Ville Street
Place du Portage, Phase II, 10th Floor
Gatineau, Quebec
K1A 0J9
Email: EDSC.DMTConsultationNTModernes-ConsultationModernLSWDESDC@labour-travail.gc.ca