The Budget Implementation Act, 2018, No. 2 enacted important amendments to the Canada Labour Code (the “Code), several of which came finally into effect on July 9, 2023. These include a new section 238.1, which creates a requirement for the reimbursement of reasonable work-related expenses, as well as new sections 253.1 and 253.2, which create requirements for the provision of information related to employment.
Reimbursement of Reasonable Work-related Expenses
Under the new section 238.1 of the Code, employers are now required to provide employees with reimbursement for reasonable work-related expenses incurred on or after July 9, 2023.
For an expense to be eligible for reimbursement, it must meet the following criteria:
- The employee does not have to pay the expense under the terms of a written agreement or a collective agreement;
- The employee must have paid the expense out-of-pocket;
- It must be work-related; and
- It must be reasonable.
There are certain exceptions to the requirement. To that end, the amended provision stipulates that an employee will not be entitled to be reimbursed for:
- Expenses that are ineligible under any applicable regulation,
- In the case of a unionized employee, expenses that the employee is required to pay pursuant to the applicable collective agreement or any other written agreement between the employer and union, or
- In the case of a non-unionized employee, expenses that the employee is required to pay pursuant to any written agreement between the employer and employee.
Unless the employer and employee are parties to a written agreement specifying otherwise, all amounts payable under the new section 238.1 must be provided to the employee within 30 days of the submission of a claim for payment.
When an employee has to pay an expense, the employer must comply with the Canada Labour Code rules around deductions, found at section 254.1.
Late last year, the federal government published proposed amendments to the Canada Labour Standards Regulations (the “Regulations”) which were intended to support the implementation of the new section 238.1. These amendments have since come into effect as well. As a result, the Regulations now prescribe the factors to consider in determining whether an expense is work-related or not. These include:
- Whether the expense is connected with the employee’s performance of work,
- Whether the expense enables an employee to perform work,
- Whether incurring the expense is required by the employer as a condition of employment or continued employment,
- Whether the expense satisfies a requirement for the employee’s work imposed by an occupational health or safety standard, and
- Whether the expense is incurred for a legitimate business purpose and not for personal use or enjoyment.
The Regulations now also prescribe the factors to consider in determining if an expense is reasonable or not. These include:
- Whether the expense is connected to the employee’s performance of work,
- Whether the expense was incurred to enable an employee to perform work,
- Whether the expense is incurred at the direction of the employer,
- Whether any amount of expense is incurred beyond the amount necessary to enable the performance of work,
- Whether the expense is one that is normally reimbursed by employers in similar industries,
- Whether the employer authorized the expense in advance,
- Whether the expense is incurred by the employee in good faith, and
- Whether the claim includes documentation, such as a receipt or invoice, that indicates that the expense was incurred.
Additionally, the Administrative Monetary Penalties (Canada Labour Code) Regulations (the “AMP Regulations”) under the Code have also been updated as it pertains to administrative monetary penalties (or “AMPs”) for a violation of the new section 238.1. Under the updated provisions, these can range from $500 to $6,000, depending on the size of the business.
Provision of Information Related to Employment
Materials Regarding Rights and Obligations of Workplace Parties
Under the new section 253.1 of the Code, employers are now required to provide employees with certain information related to their employment. Specifically, employers must provide employees with a copy of any materials that the Minister of Labour makes available and that contain information regarding employers’ and employees’ rights and obligations under Part III (Standard Hours, Wages, Vacations and Holidays) of the Code.
For existing employees, employers must provide the relevant materials within 90 days of the later of July 9, 2023 (i.e., October 7, 2023) and the day on which the Minister of Labour makes the materials available. For new employees, employers must provide the relevant materials within the first 30 days of their employment. Employers must also provide employees with a copy of any updated relevant materials from the Minister of Labour within 30 days of the updated materials becoming available.
Furthermore, employers must now post and keep posted the most recent version of the Minister of Labour’s relevant materials under the new section 253.1 in a readily accessible place where it is likely to be seen by employees. If an employee’s employment is terminated by the employer, the employer must also provide the employee with a copy of the most recent version of the Minister of Labour’s materials relating to terminations of employment by no later than the employee’s last day of work.
The AMP Regulations have also been updated in respect of AMPs for a violation of the new section 253.1. These can accordingly range from $200 to $2,000, depending on the size of the business.
Written Employment Statement
Under the new section 253.2 of the Code, employers are now required to provide employees with a written employment statement containing specific prescribed information. As with the requirement for the reimbursement of work-related expenses, this new requirement is also supported by recent amendments to the Regulations. As a result, the Regulations now dictate the information that must be contained in the employment statement, which includes:
- The names of the parties to the employment relationship,
- The job title and a brief description of the duties and responsibilities,
- The address of the ordinary place of work,
- The date on which the employment commences,
- The term of employment,
- The duration of the probationary period, if any,
- A description of the necessary qualifications for the position,
- A description of any required training for the position,
- The hours of work specific to the employee, including how it is calculated and overtime rules,
- The rate of wages or salary, including overtime rates,
- The frequency of pay days and the frequency of payment of any other remuneration,
- The mandatory deductions from wages, and
- Information on the reimbursement process for reasonable work-related expenses.
For existing employees, employers must provide an employment statement within 90 days of July 9, 2023 (i.e., October 7, 2023), whereas for new employees, employers must do so within the first 30 days of an employee’s employment. Moreover, employers are required to provide an updated employment statement to employees within 30 days after any change is made to the information contained in the last employment statement.
Furthermore, employers must retain a copy of any employment statement for 36 months after the employee’s employment with the employer ends and, on request, provide the employee with additional copies.
Employers who already provide the required information in an offer letter, employment agreement, or orientation package do not need to create an additional document for new hires. However, if any of the above information has not previously been provided to existing employees, the employer must ensure that the information be communicated within the timeline noted above.
The AMP Regulations have also been updated in respect of AMPs for a violation of section 253.2. Just like with section 253.1, these can range from $200 to $2,000, depending on the size of the business.
In Our View
The new sections 238.1, 253.1 and 253.2 fall under Part III (Standard Hours, Wages, Vacations and Holidays) of the Code. As a result, any employers who are subject to this part of the legislation – namely federally regulated private sector employers, Crown corporations, and First Nations Band Councils – must immediately ensure that they comply with these new statutory requirements (including all related regulatory requirements), and that they continue to do so from this point forward.
To that end, employers should note that the Labour Program has helpfully published an Interpretations, Policies and Guidelines document (Reimbursement of work-related expenses – IPG-120) intended to clarify and provide guidance on the application of the new section 238.1. Moreover, Service Canada has created an easy to use template form that can be used by employers to provide their employees with a written employment statement in compliance with the new section 253.2 of the Code.
That being said, the Minister of Labour’s materials as referenced in the new section 253.1 are not publicly available as of the time of publication of this article. Should such materials be made available in future, we will publish an update in that regard.