July 20, 2021
The Pay Equity Act, S.C. 2018, c. 27, s. 416 (“Pay Equity Act” or the “Act“), was passed by Parliament and received Royal Assent on December 13, 2018. It will come into force on August 31, 2021.
It will apply to federally regulated public and private sector employers with an average of 10 or more employees. It will also apply to parliamentary workplaces through changes made to the Parliamentary Employment and Staff Relations Act (R.S.C., 1985, c. 33 (2nd Supp.)).
The purpose of the Pay Equity Act is to achieve pay equity for employees in jobs that are commonly held by women by addressing gender-based discrimination in the pay practices and systems of employers. The Act is designed to ensure equal pay for work of equal value. That is, if two different jobs contribute equal value to an employer’s operations, then the employees in those positions are to receive equal pay. The Pay Equity Act requires federally-regulated employers to take a proactive approach to correct gender wage gaps within their organizations in order to promote gender equality and inclusion in Canada.
Jobs that are commonly held by women tend to be paid less than jobs commonly held by men – even when the work is comparable in value based on skill, effort, responsibility and working conditions. According to recent Statistics Canada data, in 2020, women in Canada earned 0.89 cents for every dollar earned by men. Pay equity addresses the undervaluation of women’s work, which contributes to the gender wage gap.
Pay equity is internationally recognized as a fundamental human right. Unlike section 11 of the Canadian Human Rights Act, which is complaint based, the Pay Equity Act is proactive and puts the onus on employers to assess, at set points in time, whether employees in jobs commonly held by women are earning equal pay for work of equal value in their workplace.
The role of the Office of the federal Pay Equity Commissioner, which was created on September 10, 2019 and joined the Canadian Human Rights Commission on October 16, 2019, is to administer and enforce the Pay Equity Act in federally regulated organizations. As part of this role, the Office of the Pay Equity Commissioner provides guidance to employers, bargaining agents and employees in a variety of ways as they implement pay equity in their workplaces.
During the period of transition until the Pay Equity Act comes into force, the Pay Equity Commissioner’s office will provide a series of tools and resources, including forms and templates, that will help employers and employees understand pay equity and how to establish the foundation for a successful pay equity process.