From the 20th of October 2026, federally regulated employers in Canada will no longer be able to pay employees less simply because they are employed on a part-time, full-time, fixed-term or permanent basis. The change forms part of Canada’s equal treatment provisions and is aimed at ensuring that people doing the same work (substantially) receive comparable pay, regardless of their contract type.
The new rules apply where:
- Employees work in the same industrial establishment,
- Perform (substantially) the same type of work,
- Require similar levels of skill, effort and responsibility, and
- Work under similar working conditions.
If the above criteria is met, employers cannot rely on contract type alone to justify a difference in pay.
How Does This Move Towards Equal Pay in Canada Reflect the Reality of Today’s Workforce?
Many organisations now rely on a blend of permanent employees, fixed-term workers and part-time talent to meet business needs. As workforces become more diverse, governments are increasingly looking at whether employment protections remain fit for purpose.
The Canadian reforms recognise that a person’s contribution to a business is not necessarily determined by the number of hours they work or the type of contract they hold. Instead, the focus shifts to the work being carried out and the value that employee brings to the organisation.
Will Every Pay Difference Be Unlawful?
No – the legislation does not require employers to pay absolutely everyone the same. There are still legitimate reasons why employees performing similar roles may receive different rates of pay.
For example, employers can continue to reward employees based on factors such as:
- Seniority
- Merit
- Productivity
- Quality of work
- Geographical location
This allows organisations to retain flexibility in how they structure pay, provided those differences are supported by objective and transparent criteria.
For many employers, the challenge will not be changing pay levels but ensuring there is a clear and documented rationale behind any differences that exist.
Equal Pay in Canada: Leap29’s Recommendations
With the new requirements coming into force on the 20th of October 2026, now is a good time for employers to review their pay practices and ensure any differences in pay are supported by objective and transparent criteria. This may involve assessing:
- Pay structures
- Job descriptions
- Compensation policies
- Wider reward frameworks
- Whether managers are equipped to explain pay decisions consistently and confidently
For businesses looking to establish or expand operations in Canada, Leap29’s British Columbia EOR Services provide support to organisations hiring in Canada, helping businesses manage employment, payroll and workforce compliance with confidence.
Leap29’s Perspective:
“I think this change is part of a broader trend we’re seeing globally, where transparency and fairness are becoming central themes in workplace regulation. Employees increasingly want to understand not only what they are paid, but why. By requiring employers to base pay differences on objective factors rather than employment status alone, Canada is encouraging a more open and defensible approach to remuneration. Organisations that get ahead of these expectations now are likely to be in a stronger position as workplace regulations continue to evolve.” ~ Simon Duff, Director, Leap29.
