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Canada Labour Code: New Administrative Monetary Penalty Regime for Federally Regulated Employers

In a recent development regarding the new administrative monetary penalty regime under the Canada Labour Code (the “Code”), the Government of Canada published the Administrative Monetary Penalties (Canada Labour Code) Regulations: SOR/2020-260 (the “Regulations”). The Regulations were announced on December 23, 2020, and support the regime enacted by Bill C-44, Budget Implementation Act, 2017, No, 1 (“Bill C-44”). The changes to Part IV of the Code under Bill C-44 and the Regulations will come into effect on January 1, 2021, and apply to federally regulated employers.

Bill C-44 enacted Part IV (Administrative Monetary Penalties) of the Code. Among other things, Part IV establishes a penalty system for violations of Part II (Occupational Health and Safety) and Part III (Standard Hours, Wages, Vacations and Holidays) of the Code. The purpose is to establish a fair and efficient penalty system that promotes compliance with the Code. Per Bill C-44, penalties cannot exceed $250,000.

Any violation of the Code or an associated regulation is classified under one of five levels, based on the severity of the violation. A list of all violations subject to an administrative penalty, and their classifications are set out in the Regulations, and fall into the following categories:





Related to administrative provisions.

Related to administrative provisions.


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

Related to the calculation and payment of wages.


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.

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.


Related to high-risk hazards that may result in serious injury or fatality.

Related to the employment and protection of employees who are minors.


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.


The amount of the penalty is calculated by adding together the baseline penalty amount and the history of non-compliance amount. The baseline penalty amount differs depending on the type of person or department that committed the violation and the classification of the violation. The ranges of penalties are:

  • Individuals: $200 - $4,000
  • Micro Businesses: $250 - $7,500
  • Small Businesses: $500 - $15,000
  • Large Businesses or Departments: $2,000 - $50,000

The history of non-compliance amount is equal to twice the baseline penalty amount. This amount is added where the person or department, in the preceding 5 years, was:

  • issued a notice of violation for a violation that was of the same type or of a type of a greater gravity and the person or department was ultimately considered, under section 289 or 290 of the Code, to have committed the violation or there was a final determination, under section 284 or 287 of the Code, that the person or department committed the violation;
  • was found guilty of an offence; or
  • was subject to an order made under section 153 of the Code.

In addition to fines, the Labour Program can publish the names of employers that receive administrative monetary penalties on the Government of Canada’s website. Further information in the publication may include the nature of the violation, the penalty amount, the compliance status, the dates of key decisions and the location of the violation.

The new enforcement tools have the potential to be costly for employers found in violation, and may result in unwanted media attention. As a precautionary measure, employers should review their compliance with the Code.

If you have any questions regarding the impact of Bill C-44 or the Regulations on your business, or require assistance in reviewing for compliance, please do not hesitate to contact McCarthy Tétrault’s labour and employment group.

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