Federally Regulated Employers: Everything You Need To Know About The Recent And Upcoming Canada Labour Code Amendments

The enactment of parts of the Budget Implementation Act, 2018, No. 2¹ brought two amendments to the Canada Labour Code² (the Code) that impose new obligations on federally regulated employers related to employee information and reimbursement of work-related expenses. With the introduction of these amendments, which came into effect on July 9, 2023, federally regulated employers will need to review their current employment agreements and policies to ensure they are in compliance with the law. In addition, there are impending requirements for federally regulated employers to provide menstrual products to employees in the workplace. What follows is a summary of what federally regulated employers need to know about these changes and their obligations.

Employment statements must be provided to employees

Effective July 9, 2023, federally regulated employers will have to provide employees with a written statement containing detailed information related to their employment within 90 days of July 9, 2023, for existing employees and 30 days of the employee's start date for new employees. The employment statement must include the following information:

1. The parties to the employment relationship;
2. The employee's job title and a description of their duties and responsibilities;
3. The address of the employee's ordinary place of work;
4. The employment start date;
5. The term of the employment relationship;
6. The duration of the probationary period (if any);
7. A description of the necessary qualifications for the position;
8. A description of any required training for the position;
9. Hours of work for the employee (including how those hours of work are calculated and rules about overtime);
10. The rate of wages or salary being paid, and the rate of overtime;
11. The pay period frequency and the frequency of payment of other forms of remuneration (for example bonuses, commissions, etc.);
12. Mandatory deductions from wages; and
13. Information about how the employee can claim reimbursement of work-related expenses.

The employment statement provided to the employee must be retained for 36 months after the employee's employment ends. If an employee requests a copy of their statement, the employer must comply.

For a majority of employers, the obligation to provide a majority of the information outlined above will already be addressed through a written employment contract or offer letter provided to employees. There are, however, certain requirements that are less common in standard employment agreements, including a description of an employee's necessary qualifications or training (information more commonly found in job postings) or language regarding reimbursement for work-related expenses (more often found in employer policies). As a result, we recommend federally regulated employers engage in a review their current employment agreements or offer letters to ensure all of the items identified above are captured. Further, for any employers that do not currently have a practice of presenting new employees with offer letters, introducing a form of offer letter that contains the prescribed information will simplify the process for employers and ensure compliance with these new obligations.

In addition, if employers have any current employees that never signed an employment agreement or otherwise have not received a statement that includes the prescribed information, an employment statement must be provided to those employees by October 7, 2023. We recommend employers engage in a review of what information was provided to employees when they started, and if in doubt provide a standardized employment statement to all current employees before the October 7, 2023, deadline.

Employers must reimburse employees for work-related expenses

Consistent with the above-noted requirement to provide employees with information about how they can claim reimbursement of reasonable work-related expenses, employers are now required to reimburse employees for work-related expenses incurred in the course of their employment.

The factors employers are to consider when determining whether or not an expense is "work-related" include the following:

1. Whether the expense is connected to the employee's performance of work;
2. Whether the expense enables an employee to perform work;
3. Whether incurring the expense is required by the employer as a condition of employment or continued employment;
4. Whether the expense satisfies a requirement for the employee's work imposed by an occupational health or safety standard; and
5. Whether the expense is incurred for a legitimate business purpose and not for personal use or enjoyment.

The Canada Labour Standards Regulations also identify the factors that employers are to consider when determining whether an expense is "reasonable," which are as follows:

1. Whether the expense is connected to the employee's performance of work;
2. Whether the expense is incurred to enable an employee to perform work;
3. Whether it is incurred at the request of the employer;
4. Whether any amounts of expense is incurred beyond the amount necessary to enable the performance of the work;
5. Whether the expense is one that is normally reimbursed by employers in similar industries;
6. Whether the employer authorized the expense in advance;
7. Whether the expense is incurred by the employee in good faith; and
8. Whether the claim includes documentation, such as a receipt or invoice, that indicates that the expense was incurred.

Examples of work-related expenses may include travel expenses for business, reimbursement of equipment that the employee requires, reimbursement for training or courses and reimbursement of safety equipment.

If an employee submits a claim for a work-related expense, in the absence of an agreement specifying an alternate time limit, the employer must reimburse the employee within 30 days of receipt of the claim.

Employers that do not currently have an expense-reimbursement policy in place are advise to develop one that is consistent with the above requirements, and to update their existing employment agreements to confirm that employees will be entitled to reimbursement for reasonable work-related expenses.

More changes on the horizon: Requirement to make menstrual products available

The above amendments are not the only changes we will be seeing to the Code in 2023. On May 10, 2023, the Government of Canada announced that as of December 15, 2023, federally regulated employers will have to make menstrual products (including clean and hygienic tampons and menstrual pads) available to workers at no cost while they are in the workplace.³ The intention behind these changes is to better protect the physical and psychological health and safety of menstruating employees. It is noteworthy that these employees are recognized as including not only women, but also non-binary individuals, transgender men and intersex individuals. As such, these changes are intended to help address a number of existing systemic inequities.

The Regulations Amending Certain Regulations Made Under the Canada Labour Code (Menstrual Products)⁴ published by the Government of Canada confirm that federally regulated employers will be expected to provide such menstrual products in each toilet room. If it is not feasible to provide menstrual products in each toilet room, for example because of space or lack of privacy, then employers must provide menstrual products in another location in the same workplace that is accessible by employees at all times and offers a reasonable amount of privacy. No information has been provided on what constitutes a "reasonable amount of privacy," and what will be reasonable will vary depending on the circumstances of an employer's workplace, but at a minimum we recommend ensuring that employees in need of menstrual products can access them discreetly from whichever location has been selected.

The importance of privacy and discretion is highlighted in the background provided by the Government of Canada on these regulations, which notes the importance of employees being able to take a menstrual product without their co-workers knowing in the moment and this being of particular concern for employees who do not want to identify themselves as someone who menstruates due to negative stigma. As such, employers will want to be mindful of the sensitivity of access to these products for impacted employees when making the required arrangements.