Canada introduces new wage equality rules under Labour Code

New regulatory changes and recent data highlight evolving pay equity landscapes in Canada. Starting October 20, 2026, federally regulated employers must comply with new wage equality obligations under the Canada Labour Code. While the existing Pay Equity Act targets systemic gender-based compensation gaps between job classes, the new Code provisions focus on individual employees, prohibiting wage-rate differences based on employment status, such as full-time, part-time, permanent, or temporary roles.

These two regimes may overlap, particularly if pay equity adjustments for one job class create disparities for employees with different employment statuses performing similar work. Consequently, employers must manage compensation, job classifications, and employment status with increased scrutiny to satisfy both statutory requirements.

Recent analysis of 2025 Labour Force Survey data indicates that while pay gaps based on gender and immigration status persist across Canada, the public sector offers more equitable compensation than the private sector. In 2025, women in the public sector earned 4.9 percent more than equivalent female workers in the private sector. The gender pay gap was found to be smallest in the health care and social assistance industries within the public sector, while being widest in education.