Canada Gazette, Part I, Volume 156, Number 29: Regulations Amending Certain Regulations Made Under the Canada Labour Code (Medical Leave with Pay)
July 16, 2022
Statutory authority
Canada Labour Code
Sponsoring department
Department of Employment and Social Development
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
Once the provisions of Bill C-3, An Act to amend the Criminal Code and the Canada Labour Code (the Act), respecting paid medical leave are in force, the Canada Labour Code (the Code) will be amended to provide 10 days of medical leave with pay for all federally regulated employees who are subject to Part III (Standard Hours, Wages, Vacations and Holidays) of the Code. Consequential regulatory amendments are required to support the implementation of the paid medical leave provisions and to ensure that they can be enforced.
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 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 for the advantage 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 or territorial labour jurisdiction.
Protected leaves under the Code
Part III of the Code establishes paid leaves for employees, including annual vacation, general holiday, bereavement, and personal leave. The Code also provides for certain unpaid leaves, including unpaid medical leave in the event an employee must take time off work to deal with an injury or illness, for organ or tissue donation, or to attend a medical appointment.
The Canada Labour Standards Regulations (CLSR) clarify the calculation of wages owed for a paid leave to employees who work irregular hours or who are paid on a basis other than time and the determination of eligibility for employees engaged in multi-employer employment. Under section 24 of the CLSR, employers must keep records related to leaves, which allow inspectors to verify compliance with requirements under the Code. These record-keeping requirements vary depending on the type of leave, but typically require employers, at a minimum, to record the periods of each leave taken.
For unpaid medical leave, employers are also required to keep records of any request for a medical certificate, and any medical certificate provided by an employee in response to a request. All records required under the CLSR must be kept by employers for at least three years following the period of leave. Under the Code, an employer may request a medical certificate for periods of unpaid medical leave of three days or longer.
The Standards for Work-Integrated Learning Activities Regulations (SWILAR) govern the application of labour standards to persons who perform activities to fulfil the requirements of a secondary, post-secondary or vocational school program offered by an educational institution (student interns). The SWILAR set out the labour standards that apply to student interns.
Section 189 of the Code provides protections for employees whose employment is transferred as the result of the lease or transfer of their employer’s business or due to a contract being awarded through a retendering process. Under this section, employment with the former employer is considered continuous with employment with the subsequent employer.
New amendments to the Code
The Act received royal assent on December 17, 2021, and was amended through the Budget Implementation Act, 2022, No. 1. Once sections 6 and 7 of the Act are in force, the Act will amend Division XIII (Medical Leave) of Part III of the Code by adding the right to paid medical leave and apply section 189 to the Division, so that leave entitlements are protected during a contract retendering or a lease or transfer of a business. Sections 6 and 7 of the Act are set to come into force on December 1, 2022, with the ability to set an earlier date through an order of the Governor in Council.
The new paid medical leave provisions will provide employees with 3 days of medical leave with pay after 30 days of continuous employment. Employees will earn one further day at the start of each month after completing one month of continuous employment, up to a maximum of 10 days per calendar year. Any days of medical leave with pay that an employee does not take in a calendar year will carry forward to the next calendar year and each day carried over reduces the number of days that can be earned in that next year by one.
It will be possible for an employer to require that an employee take paid medical leave in periods of not less than one day. An employer may also require, through a written request made within 15 days after the employee’s return to work, that the employee provide a medical certificate with respect to any period of paid or unpaid medical leave of at least 5 consecutive days.
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 of the Code. The Administrative Monetary Penalties (Canada Labour Code) Regulations (AMPs Regulations) designate and classify violations of provisions under the Code and its 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.
The AMPs Regulations specify the method used to determine the amount of an AMP in each 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 and the classification of the violation. For violations under Part III of the Code, 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. |
Objective
The objective of the Regulations Amending Certain Regulations Made Under the Canada Labour Code (Medical Leave with Pay) [the proposed Regulations] is to support the implementation of the paid medical leave legislative provisions by clarifying the application of the provisions to certain classes of employees, making technical amendments that align sections of existing regulations with the new provisions, and ensuring that the AMPs regime can be used to promote compliance and be used in enforcement of the provisions.
Description
The proposed Regulations would ensure that employees in the longshoring sector who are engaged in multi-employer employment are considered to be continuously employed for the purposes of determining eligibility for paid medical leave. The proposed Regulations also define the regular rate of wages to be used in calculating paid medical leave for certain employees, introduce record-keeping requirements, provide that employers who use a year other than a calendar year to calculate annual vacations are to use that same year to calculate paid medical leave entitlements, and make other minor changes of a technical nature to ensure alignment with existing provisions in the Code and in regulations made under the Code.
These proposed Regulations include amendments to the CLSR, the SWILAR, and the AMPs Regulations.
Ensure that employees in the longshoring sector who are engaged in multi-employer employment are eligible for paid medical leave
The proposed Regulations would clarify that employees in the longshoring sector who are engaged in multi-employer employment (i.e. casual daily dispatch workers on the West Coast, and bullpen workers on the East Coast) are considered to be engaged in continuous work for the purposes of eligibility for paid medical leave. Longshoring employees working for single employers would be covered by the Code and are not impacted by the proposed Regulations.
Definition of regular rate of wages
The proposed Regulations would apply the definition in section 17 of the CLSR for the “regular rate of wages” to paid medical leave. This definition currently applies to calculations for other types of paid leave under the Code, such as personal leave. Under the proposed Regulations, the regular rate of wages for an employee whose hours of work differ from day to day or who is paid on a basis other than time (e.g. commission) would be
- (a) the average daily earnings of an employee (other than overtime pay) for the 20 days the employee worked immediately before the first day of the period of paid leave; or
- (b) an amount calculated by a method agreed on under or pursuant to a collective agreement that is binding on the employer and the employee.
New record-keeping provisions
The proposed Regulations would require all employers to keep the following records related to each period of medical leave with pay:
- The dates of commencement and termination of the leave;
- The year of employment in respect of which the leave was earned;
- The number of days of leave carried over from a previous year;
- A copy of any written request for a medical certificate made by an employer; and
- A copy of any medical certificate submitted by an employee.
Employers who use a year other than a calendar year
The proposed Regulations would modify the paid medical leave provisions in the Code to require an employer who uses a year other than a calendar year to calculate the entitlement to annual vacation of their employees to use that same year for the purposes of the paid medical leave provisions.
Minor technical changes
The proposed Regulations would also
- Add medical leave with pay to the list of paid leaves that are counted as time worked for the purposes of hours of work averaging; and
- Update the subsections listed in paragraph 5(g) of the SWILAR to reflect the amendments made to the Code to ensure that student interns — who are not required to be paid — not be entitled to paid medical leave.
Designation of violations
The proposed Regulations would classify violations of the paid medical leave provisions for the purposes of the AMPs regime. New Code provisions that are set to come into force on December 1, 2022 (unless an earlier date is set by an order of the Governor in Council), would be designated and classified, as would new regulatory record-keeping provisions introduced in the proposed Regulations.
Designation and classification of new Code provisions
The following new Code provisions would be designated in Schedule 2 of the AMPs Regulations. Failures to comply with the provisions would be classified as type C violations, given that they address employee leave entitlements:
- Subsection 239(1.2)(a) — Failure to provide 3 days of medical leave with pay after 30 days of continuous employment;
- Subsection 239(1.2)(b) — Failure to provide one day of medical leave with pay per month after completing one month of continuous employment;
- Subsection 239(1.21) — Failure to provide employee entitlement of 10 days of medical leave with pay per year; and
- Subsection 239(1.4) — Failure to ensure that each day of medical leave with pay that is not taken in a year is carried forward to the following year.
The following new Code provision set out below would be designated in the AMPs Regulations and violations would be classified as type B violations, as the provision addresses the calculation and payment of wages:
- Subsection 239(1.3) — An employee must be paid at their regular rate of wages while taking medical leave with pay.
Designation and classification of new regulatory provisions
Violations of the new record-keeping regulatory provisions would be classified as type A violations, as the provisions are administrative in nature.
Regulatory development
Consultation
In developing the proposed Regulations, the Labour Program of the Department of Employment and Social Development consulted with employer and employee representatives, union representatives, national Indigenous organizations, and industry experts. These stakeholders were invited to participate in two general consultation sessions and four additional industry- or employer-specific meetings — two with the longshoring sector, one with the Canadian Trucking Alliance, and one with the Canadian Federation for Independent Business — between March and April 2022. A discussion paper that outlined the regulatory proposals was also circulated on March 2, 2022, for a four-week comment period. The consultation sessions were held with a total of 36 employer groups and 13 labour and community organizations in attendance. Written submissions were received from 13 stakeholder groups.
Consultations were also conducted with the Labour Program’s inspectorate to understand how the proposed Regulations may be enforced and to identify any potential issues with compliance before the proposed Regulations were prepublished. No concerns were raised about the proposed Regulations.
Feedback from the consultations was positive overall. Employer and employee representatives were generally supportive of the regulatory proposals presented as part of the consultations and indicated during the sessions and through written submissions that the regulatory proposals would add clarity to how paid medical leave would be applied given the unique circumstances of their industries and the working conditions of their employees.
Employers raised concerns regarding the potential for leave stacking, for example, an employee being entitled to both paid medical leave under the Code and an existing medical leave plan or benefit offered by their employer through a collective agreement or employment contract. Other feedback included comments on the difficulties of implementing paid medical leave without finalized regulations, and the time needed to make system changes to accommodate the new leaves and record-keeping requirements. Some employers raised concerns regarding how the regulatory proposals would apply to hours of work averaging, and asked if employers could continue to use a year other than a calendar year, as used to calculate annual vacation, for the purposes of paid medical leave. Some employers were also concerned that employees who worked on a casual or “elect-to-work” basis would also be entitled to the same amount of paid medical leave, given the limited scope of their employment or their control over their hours worked.
The proposed Regulations are based on stakeholder feedback from the consultations. They clarify the interaction between paid medical leave and hours of work averaging and provide that employers who use a year other than a calendar year to calculate the entitlement to annual vacation of their employees are to use that same year for the purposes of the paid medical leave provisions. The Labour Program may also develop interpretation, policy and guidance documents (IPGs) to provide additional guidance on the application of the legislative provisions to employees who work irregular hours or work under an “elect-to-work” model. Finally, it is intended that the proposed Regulations be brought into force at the same time as the legislative provisions. This simultaneous coming into force would ensure that there are consistent systems and record-keeping requirements as soon as the legislative provisions are in force. It would also prevent employers from being required to change their systems when the legislation comes into force and again when the proposed Regulations do.
Employee representatives were concerned about the time frame for implementing the provisions, with emphasis on implementing paid medical leave as quickly as possible before the next wave of COVID-19 or appearance of a new variant. They also indicated the need for the provisions to apply universally to all employees in federally regulated industries. This initiative reflects a timely response to the urgency that was highlighted by stakeholders. The proposed Regulations would help to ensure that all employees in the federal jurisdiction are entitled to paid medical leave by ensuring that employees in the longshoring sector who are engaged in multi-employer employment can meet continuous length-of-service 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 proposed Regulations.
Eight national Indigenous organizations were invited to participate in the consultation sessions, and only one (Women of the Métis Nation) attended the English consultation session. The Labour Program has not received any written submissions from Indigenous stakeholders.
Instrument choice
The proposed Regulations are required to support the implementation of the paid medical leave provisions and their application in workplaces that are subject to Part III of the Code. The objective of the proposed Regulations cannot be accomplished through other instruments, as the specific text used in the proposed Regulations is necessary for the purposes of enforcement activities and to clarify the application of the provisions to certain classes of employees.
Regulatory analysis
Benefits and costs
Analytical framework
The incremental impacts (benefits and costs) attributable to the proposed regulatory amendments are determined by comparing a baseline scenario, in which the proposed Regulations are not in force, to a scenario with the proposed Regulations. Costs between December 1, 2022, and December 31, 2032, the period of 10 years and 1 month following implementation of the proposed Regulations, are discounted to the year 2022 at a discount rate of 7% and expressed in 2020 Canadian dollars.
In the baseline scenario, the Act would come into force in December 2022, entitling all employees in the federal jurisdiction to 10 days of paid medical leave. The legislation would be unaccompanied by the proposed Regulations, which provide further details about the newly introduced paid medical leave provisions for employees in the federal jurisdiction. In addition, record-keeping requirements under the CLSR would not specify requirements related to paid medical leave, other than the requirement to keep records related to the medical certificate. Though the longshoring sector is within the federal jurisdiction, in the baseline scenario, the paid medical leave provisions of the Code would not apply to multi-employer employment [defined in subsection 19(1) of the CLSR as “longshoring employment in any port in Canada where by custom the employee engaged in such employment would in the usual course of a working month be ordinarily employed by more than one employer”], assuming that these employees would not be considered continuously employed for the purposes of paid medical leave eligibility. Note that multi-employer employment only applies to a subset of the longshoring sector. Other employees in the longshoring sector are in a clear employer-employee relationship and are covered by paid medical leave under the legislation.
In the regulatory scenario, multi-employer employment as defined in the CLSR would be considered continuous for paid medical leave eligibility; therefore, 10 days of paid medical leave would be introduced for employees in the longshoring sector who are considered casuals or dispatch workers. All of the costs and benefits of the legislation would therefore apply to employees in the longshoring sector engaged in multi-employer employment and to their employers. In addition, the CLSR would be amended to include record-keeping requirements for employers related to paid medical leave, which would have associated costs and benefits for all employers and employees subject to Part III of the Code. Other proposed regulatory amendments, while not providing large, monetized benefits, would clarify the application of paid medical leave for stakeholders and make consequential amendments to the CLSR, the SWILAR and the AMPs Regulations to take into account the new legislative provisions.
Costs
Costs to employers in the longshoring sector for paid medical leave for employees in the longshoring sector who are engaged in multi-employer employment (monetized)
As a result of the proposed Regulations, employers are expected to carry costs associated with paying 10 days of paid medical leave to their casual and dispatch employees. The present value of the total costs of paid medical leave for employers of employees engaged in multi-employer employment in the longshoring sector is estimated to be $132.9 million in present value (PV) for the period from December 1, 2022, to December 31, 2032, or $18.9 million as an annualized average.
Amend record-keeping provisions (monetized)
The proposed Regulations are expected to result in record-keeping costs as employers would need to track the earned days of paid medical leave for employees. In the baseline scenario, employers are required under the CLSR to retain records for three years related to requests for medical certificates, when provided, as this requirement currently exists for medical leave in the CLSR.
The proposed Regulations would increase record-keeping costs marginally since employers would need to record periods of paid medical leave in greater detail than is currently required for unpaid medical leave, with one incremental record for each day of paid medical leave used by an employee.
The anticipated incremental costs to federal jurisdiction employers for human resource administrative staff were estimated based on the total volume of employees in the federal jurisdiction multiplied by an incremental time requirement of one minute per record, for each day of paid medical leave. The present value of the costs associated with the additional time of human resource personnel is estimated to be $33.9 million (PV) for the period from December 1, 2022, to December 31, 2032, or $4.8 million as an annualized average.
Cost associated with the standard definition for regular rate of wages to medical leave (qualitative)
No costs are anticipated to result for either employers or employees as a result of adopting the standard definition for the regular rate of wages used to calculate the pay of employees compensated on a non-hourly basis. The same definition is presently used for application of other elements of the CLSR, including leave for bereavement. This measure would provide a transparent means to consistently determine the rate of wages in a manner that favours neither employers nor employees, to be used in calculations of medical leave entitlements, rather than alter the wage these processes would determine. The proposed definition for the regular rate of wages would provide clarity for the purposes of enforcement under the Code and would not impact the entitlement to employees or the costs to employers for the implementation of the paid medical leave provisions.
Cost associated with clarifying the entitlement to paid medical leave for student interns (qualitative)
The proposed Regulations would update the subsections listed in paragraph 5(g) of the SWILAR to take into account the amendments that will be made to the Code by the Act. They would ensure that student interns are not entitled to paid medical leave once the Code is amended by the Act. Student interns perform activities for an employer as part of a secondary, post-secondary, vocational, or other equivalent educational program. Amending paragraph 5(g) of the SWILAR is not anticipated to have any costs for employers or employees, since student interns are not entitled to receive pay for their work. As in the baseline scenario, student interns would remain eligible for unpaid medical leave under the regulatory scenario.
The total discounted costs of the regulatory proposal are estimated to be $166.8 million for the period from December 1, 2022, to December 31, 2032, or $23.8 million as an annualized average.
Benefits
Benefit for employers in the longshoring sector: productivity
Paid medical leave enables employers to gain access to longshoring workers who are more productive while in the workplace. Without paid medical leave and the supporting regulations, a casual or dispatch employee engaged in multi-employer longshoring employment who is sick faces the option to either forego wages for the period of illness or injury to stay home and recuperate or go to work sick. Paid medical leave will reduce the financial repercussions in terms of foregone wages during periods of illness. Correspondingly, paid medical leave would reduce the number of days workers would show up to work sick. When workers continue to work during periods of illness, they will be less productive than when they are healthy. Providing paid medical leave to casual and dispatch employees ensures they are more productive when they are at work since they can care for themselves on days they are sick, thus ensuring they are continuously productive whenever they are at work.
The proposed Regulations would also provide multi-employer employees in the longshoring sector the paid medical leave they need to get timely medical care and recover faster at home than they would if they attended their workplace while being sick. With sick and injured workers recovering at home rather than working, paid medical leave ensures employees can be continuously productive when they are at work, resulting in productivity gains.
Based on empirical estimates of the productivity differential between healthy and sick or injured workers, the increase in worker productivity is anticipated to be equivalent to 1.05 hours per week per employee. The benefits of productivity enhancements associated with the introduction of paid medical leave for longshoring casual and dispatch employees were estimated using this productivity differential, valued using the wage rates of longshoring employees for the affected group of employees over the period of 10 years and 1 month following the introduction of the proposed Regulations. The resulting productivity benefits were estimated to be $80.6 million (PV) to employers in the longshoring sector over the period of 10 years and 1 month following the introduction of the proposed Regulations.
Presenteeism benefit for employers in the longshoring sector: reduced contagious infections in the workplace (qualitative)
As part of improving productivity, employers would benefit from a reduction in presenteeism, which is the loss of productivity that occurs when employees show up to work but are not able to function fully in the workplace due to illness, injury or other condition. Paid medical leave policies would benefit employers in the longshoring sector by reducing the costs associated with the spread of contagious infections, such as colds, since casual and dispatch employees engaged in multi-employer employment would endure lesser financial repercussions if they isolate at home while sick.
Presenteeism benefit for employees in the longshoring sector: reduced progression of illness and lower chance of further injury (qualitative)
Providing paid medical leave could help reduce the cost of presenteeism by allowing casual and dispatch employees to get timely medical care and recover faster. Casual and dispatch employees engaged in multi-employer employment without paid medical leave are more likely to go to work when they are sick, and correspondingly they would be less likely to seek preventive medical care and health checks compared to their peers with benefits. Correspondingly, paid medical leave could prevent the advancement of illness and development of more serious diseases by supporting employees in managing their health.
Benefit for society: reduced burden on the health care system (qualitative)
Paid medical leave could help ease the financial burden on the health care system. Since a longshoring worker engaged in multi-employer employment with paid medical leave is more likely to stay home and/or go to the doctor, this potentially reduces the likelihood of aggravating the illness or injury, like shortening the duration of a cold or not further aggravating a sprained ligament. If the severity of illness or injury is better kept under control, this may result in less demands on the health care system in the long run because sick or injured workers are less likely to need as much medical attention from illnesses or injuries prolonged or aggravated by continuous work.
Clarification of the scope of the benefit (qualitative)
The proposed Regulations would provide greater certainty to employers and employees by ensuring that student interns would remain eligible for unpaid medical leave but do not have access to the new paid medical leave, and other interns would be fully eligible for paid sick leave. Student interns, as regulated under the Code and SWILAR, are not entitled to pay for their work or access to paid leaves under the Code.
Consistent application of paid medical leave for stakeholders (qualitative)
Record-keeping requirements for paid medical leave would support enforcement efforts by Labour Affairs Officers when a complaint is made by an employee, to allow for consistent application of the regulations on paid medical leave for all stakeholders.
Cost-benefit statement
- Number of years: 10 years and 1 month (December 1, 2022–December 31, 2032)
- Dollar year: 2020 Can$
- Present value base year: 2022
- Discount rate: 7%
| Impacted stakeholder | Description of cost | Sum 2022 (Dec.) and 2023 | Sum 2024–2031 | 2032 | Total (present value) | Annualized value |
|---|---|---|---|---|---|---|
| Employers | Longshoring sector — cost of paid medical days | $18,350,718 | $104,597,905 | $9,958,468 | $132,907,091 | $18,922,980 |
| Record keeping costs | $4,682,830 | $26,692,742 | $2,541,438 | $33,917,010 | $4,829,019 | |
| All stakeholders | Total costs | $23,033,548 | $131,290,647 | $12,499,906 | $ 166,824,101 | $23,751,999 |
| Impacted stakeholder | Description of benefit | Sum 2022 (Dec.) and 2023 | Sum 2024–2031 | 2032 | Total (present value) | Annualized value |
|---|---|---|---|---|---|---|
| Employers | Employers in the longshoring sector | $11,130,422 | $63,442,683 | $6,040,197 | $80,613,302 | $11,477,520 |
| All stakeholders | Total benefits | $11,130,422 | $63,442,683 | $6,040,197 | $80,613,302 | $11,477,520 |
| Impacts | Sum 2022 (Nov.–Dec.) and 2023 | Sum 2024–2031 | 2032 | Total (present value) | Annualized value |
|---|---|---|---|---|---|
| Total costs | $23,033,548 | $131,290,647 | $12,499,906 | $166,824,101 | $23,751,999 |
| Total benefits | $11,130,422 | $63,442,683 | $6,040,197 | $80,613,302 | $11,477,520 |
| NET IMPACT | −$11,903,126 | −$67,847,965 | −$6,459,709 | −$86,210,799 | −$12,274,478 |
Qualitative impacts
Positive impacts
- Higher employee productivity
- Reduced presenteeism
- Prevention of injury and disease progression
- Reduced burden on the health care system
Distributional impacts
- Transfer of wage income from employers to workers
The full costs and benefits analysis report is available upon request.
Small business lens
The compliance costs are associated with the paid medical leave provision. The costs of paid medical leave for small employers in the longshoring sector are estimated to be $22.4 million (PV) over the period of 10 years and 1 month. This figure includes costs to small employers in the longshoring sector who employ casual daily dispatch workers on an as-needed basis.
The administrative costs are associated with the record-keeping provision for all small employers subject to Part III of the Code. The total costs of record keeping to small employers (excluding the longshoring sector) are estimated to be $2.9 million (PV) over the period of 10 years and 1 month (2022 Can$). The costs of record keeping to small employers in the longshoring sector are estimated to be $28,446 (PV) over the period of 10 years and 1 month (2022 Can$).
The sum of the compliance and administrative costs for the longshoring sector are estimated to be $25.3 million (PV), or $1,602 (PV) per employer over the period of 10 years and 1 month (2022 Can$).
Since the costs of the proposal are dependent on the number of employees hired in businesses, small employers are not expected to be disproportionately affected by the proposed Regulations. Small employers subject to Part III of the Code would face administrative costs directly proportional to their number of employees. Employers in the longshoring sector who employ casual daily dispatch workers would be subject to costs proportional to the number of workers they need to hire, as they would be responsible for paying those workers for periods of paid medical leave taken.
Small business lens summary
- Number of small businesses impacted:
- Total federal jurisdiction sectors (excluding longshoring): 15 783
- Longshoring sector: 14
- Total federal jurisdiction sectors: 15 797
- Number of years: 10 years and 1 month (December 1, 2022–December 31, 2032)
- Base year for costing: 2020 Can$
- Present value base year: 2022
- Discount rate: 7%
| Paid medical leave provisions | Annualized value | Present value |
|---|---|---|
| Compliance cost (longshoring) | $3,190,953 | $22,411,922 |
| Record keeping | Annualized value | Present value |
|---|---|---|
| Administrative cost (federal jurisdiction sectors excluding longshoring) | $408,616 | $2,869,950 |
| Administrative cost (longshoring) | $4,050 | $28,446 |
| Totals | Annualized value | Present value |
|---|---|---|
| Total compliance cost (for affected longshoring employers) | $3,190,953 | $22,411,922 |
| Total administrative cost (for all federal jurisdiction employers) | $412,666 | $2,898,396 |
| Subset of longshoring employers table 7 note a | $4,050 | $28,446 |
| Total cost | $3,603,620 | $25,310,318 |
| Subset of longshoring employers | $3,195,004 | $22,440,368 |
| Total cost per impacted small business | $228.11 | $1,602 |
| Subset of longshoring employers | $228,215 | $1,602,883 |
Table 7 note(s)
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One-for-one rule
The proposed Regulations would not result in a new regulatory title and would not be considered as a title in or a title out under Element B of the Government of Canada’s one-for-one rule.
The proposed Regulations would require employers to keep a record each time an employee takes a paid medical leave. The record-keeping costs cover a 10-year period, i.e. 2023 to 2032, and are based on the following assumptions: it will take employers one minute to produce a record (i.e. 10 times per yearfootnote 1), the salary of a human resources administrative clerk is $30.52/hour (2012 Can$), and a population of 955 000 employees working in federal jurisdiction workplaces is projected to grow at a rate of 0.91%. The total annualized administrative costs for record keeping to employers in the federal jurisdiction subject to Part III of the Code are estimated to be $2,706,014 or $146.27 per business (2012 Canadian dollars, 2012 discount base year).
Regulatory cooperation and alignment
The proposed 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, as there are no broader environmental impacts.
Gender-based analysis plus
The proposed Regulations would ensure that employees in the longshoring sector who are engaged in multi-employer employment are entitled to paid medical leave. Male employees make up 86.4% of the longshoring industry,footnote 2 and would disproportionately benefit from the regulatory proposal. The proposed Regulations would also positively impact adults aged 45 years or older, as workers in that age category make up 52.6% of the longshoring sector compared to 46.9% in that age group across the industries regulated under Part III of the Code.footnote 3 There are no expected negative impacts of the proposed Regulations on any gender or identity groups.
Implementation, compliance and enforcement, and service standards
Implementation
The proposed Regulations are intended to come into force on the day on which section 7 of the Act comes into force, which will be on December 1, 2022, unless an earlier date is established through an order of the Governor in Council. If the proposed Regulations are registered after section 7 of the Act has come into force, then the proposed Regulations will come into force on the day on which they are registered.
The Labour Program may publish interpretation and guidance materials for employees and employers on their new rights and responsibilities. These materials would be 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
As with all provisions under Part III of the Code, labour affairs officers will detect non-compliance with the paid medical leave provisions 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 obligations, seeking an Assurance of Voluntary Compliance (AVC) from the employer, or issuing a compliance order for employers to cease the contravention and take steps to prevent its reoccurrence. To address more serious or repeated 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 IPG entitled Administrative Monetary Penalties - Canada Labour Code, Part IV - IPG-106.
Contact
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. It is strongly recommended to use the online commenting feature that is available on the Canada Gazette website, but, if email is preferred, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to
Ourania Moschopoulos
Acting Director
Labour Standards and Wage Earner Protection Program
Labour Program
Employment and Social Development Canada
Email: EDSCDMTConsultationNTModernesConsultationModernLSWDESDC@labour-travail.gc.ca
PROPOSED REGULATORY TEXT
Notice is given that the Governor in Council proposes to make the annexed Regulations Amending Certain Regulations Made Under the Canada Labour Code (Medical Leave with Pay) under paragraphs 203(2)(b)footnote a, 239(13)(a)footnote b and (b)footnote b and 264(1)(a)footnote c and (i.1)footnote c and subparagraph 270(1)(a)(i)footnote d of the Canada Labour Codefootnote e.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Ourania Moschopoulos, Acting Director, Labour Standards and Wage Earner Protection Program, Department of Employment and Social Development, 165 De l’Hôtel-de-Ville Street, Place du Portage, Phase II, 10th Floor, Gatineau, Quebec J8X 3X2 (email: EDSCDMTConsulationNTModernesConsultationModernLSWDESDC@labour-travail.gc.ca).
Ottawa, July 13, 2022
Wendy Nixon
Assistant Clerk of the Privy Council
Regulations Amending Certain Regulations Made Under the Canada Labour Code (Medical Leave with Pay)
Canada Labour Standards Regulations
1 (1) Subsection 6(7) of the Canada Labour Standards Regulations footnote 4 is amended by striking out “or” at the end of paragraph (f) and by adding the following after paragraph (f):
- (f.1) of medical leave of absence with pay; or
(2) Subsection 6(8) of the Regulations is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):
- (e) of medical leave of absence with pay.
2 The heading before section 17 of the Regulations is replaced by the following:
Regular Rate of Wages for Purposes of General Holidays, Personal Leave, Leave for Victims of Family Violence, Bereavement Leave and Medical Leave
3 The portion of section 17 of the Regulations before paragraph (a) is replaced by the following:
17 For the purposes of subsections 206.6(2), 206.7(2.1), 210(2) and 239(1.3) of the Act, the regular rate of wages of an employee whose hours of work differ from day to day or who is paid on a basis other than time shall be
4 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), 235(1) and 239(1.2), 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.
5 (1) Paragraph 24(2)(e) of the Regulations is replaced by the following:
- (e) the actual earnings, indicating the amounts paid each pay day, with a recording of the amounts paid for overtime, vacation pay, general holiday pay, personal leave pay, pay for leave for victims of family violence, bereavement leave pay, medical leave of absence pay, termination pay and severance pay;
(2) Paragraph 24(2)(l) of the Regulations is replaced by the following:
- (l) any notice of termination of employment or intention to terminate employment given in accordance with Division IX or X of the Act;
(3) Subsection 24(2) of the Regulations is amended by adding the following after paragraph (n.6):
- (n.7) with respect to any paid leave granted to the employee under Division XIII of the Act,
- (i) the dates of commencement and termination of the leave,
- (ii) the year of employment in respect of which the leave was earned,
- (iii) the number of days of leave carried over from a previous year,
- (iv) a copy of any written request made by an employer under subsection 239(2) of the Act, and
- (v) a copy of any certificate submitted by the employee under subsection 239(2) of the Act;
- (n.8) with respect to any leave without pay granted to the employee under Division XIII of the Act,
- (i) a copy of any written request made by an employer under subsection 239(2) of the Act, and
- (ii) a copy of any certificate submitted by the employee under subsection 239(2) of the Act; and
6 The Regulations are amended by adding the following after section 33:
Medical leave with pay
Modifications — subsections 239(1.21) and (1.4) of the Act
33.1 With respect to employers that base the calculation of the annual vacation of their employees on a year other than a calendar year:
- (a) subsection 239(1.21) of the Act is modified as follows:
Maximum of 10 days
- (1.21) Subject to the regulations, an employee is entitled to earn up to 10 days of medical leave of absence with pay in a year used by the employer to calculate the annual vacation of their employees.
- (b) subsection 239(1.4) of the Act is modified as follows:
Annual carry forward
- (1.4) Subject to the regulations, each day of medical leave of absence with pay that an employee does not take in the year used by the employer to calculate the annual vacation of their employees is to be carried forward to the first day of the following year and decreases, by one, the maximum number of days that can be earned in that year under subsection (1.21).
Standards for Work-Integrated Learning Activities Regulations
7 Paragraph 5(g) of the Standards for Work-Integrated Learning Activities Regulations footnote 5 is replaced by the following:
- (g) under Division XIII (Medical Leave), subsections 239(1), (1.1), (2) to (4), (6) and (7);
Administrative Monetary Penalties (Canada Labour Code) Regulations
| Item | Column 1 Provision |
Column 2 Violation Type |
|---|---|---|
| 97.1 | 239(1.2)(a) | C |
| 97.2 | 239(1.2)(b) | C |
| 97.3 | 239(1.21) | C |
| 97.4 | 239(1.3) | B |
| 97.5 | 239(1.4) | C |
| Item | Column 1 Provision |
Column 2 Violation Type |
|---|---|---|
| 56.1 | 24(2)(n.7)(i) | A |
| 56.2 | 24(2)(n.7)(ii) | A |
| 56.3 | 24(2)(n.7)(iii) | A |
| 56.4 | 24(2)(n.7)(iv) | A |
| 56.5 | 24(2)(n.7)(v) | A |
| 56.6 | 24(2)(n.8)(i) | A |
| 56.7 | 24(2)(n.8)(ii) | A |
Coming into Force
10 These Regulations come into force on the day on which section 7 of the Act to Amend the Criminal Code and the Canada Labour Code, chapter 27 of the Statutes of Canada 2021, comes into force, but if these Regulations are registered after that day, they come into force on the day on which they are registered.
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