Backgrounder: Proactive Pay Equity


The new legislation – An Act to Establish a Proactive Pay Equity Regime within the Federal Public and Private Sectors (Pay Equity Act) –and the amendments to the Canadian Human Rights Act (CHRA) and the Parliamentary Employment and Staff Relations Act (PESRA) will bring about a dramatic shift in how the right to pay equity is protected in federally regulated workplaces. It will direct employers to take proactive steps to ensure that they are providing equal pay for work of equal value.

The Act will apply to federally regulated public and private sector employers with 10 or more employees as well as Ministers’ offices.  The new legislation will:

  • Require employers to establish a pay equity plan within three years of becoming subject to the Act that:
    • Indicates the number of employees of the employer;
    • Identifies job classes within their workplace;
    • Indicates the gender predominance of the identified job classes (i.e. female or male predominant, or gender neutral);
    • Evaluates the value of work performed by each job class;
    • Identifies the compensation associated with each job class;
    • Compares the compensation associated with female-predominant and male-predominant job classes of similar value;
    • Sets out the results of the comparison and identifies which female-predominant job classes require an increase in compensation;
    • Identifies when the increases in compensation are due; and
    • Provides information on the dispute resolution procedures available to employees.
  • Require that pay equity plans be reviewed and updated at least once every five years, in order to identify and close any gaps that may have emerged;
  • Require employers to post notices setting out their obligations and reporting on key milestones in fulfilling these obligations;
  • Require unionized employers, as well as those non-unionized employers with 100 or more employees, to establish a pay equity committee to develop or update the pay equity plan. Employer, union and non-unionized employee representatives will all be members of  the committee;
  • Provide employees with the opportunity to comment on a proposed pay equity plan (or update) before it is finalized and require that any comments be taken  into consideration before finalizing the plan;
  • Establish a Pay Equity Commissioner within the Canadian Human Rights Commission to administer and enforce the Act by, among other things:
    • Assisting workplace parties in understanding their rights and fulfilling their obligations;
    • Undertaking and publishing research regarding pay equity matters;
    • Providing advice to the Minister responsible for the Act in respect of pay equity issues;
    • Receiving complaints from employers, bargaining agents and employees;
    • Facilitating dispute resolution and conducting investigations;
    • Issuing binding orders, where necessary, to settle disputes and resolve complaints;
    • Approving extensions and variances to the Act in specified circumstances; and
    • Conducting compliance audits.
  • Stipulate that employers must submit annual statements to the Pay Equity Commissioner regarding their pay equity plans;
  • Provide mechanisms to request the review or appeal of decisions of the Pay Equity Commissioner;
  • Introduce an administrative monetary penalty system (AMPS) to promote compliance;
  • Provide the Governor in Council with the regulation-making power to adapt the pay equity regime in its application to Indigenous governing bodies who are employers within the meaning of the Act;
  • Accommodate the particular context of ministers’ offices by allowing for adaptations to the pay equity regime for exempt staff;
  • Require that the Act be reviewed ten years after coming into force and every five years after that; and
  • Repeal the Public Sector Equitable Compensation Act.  

Amendments to the Parliamentary Employment and Staff Relations Act (PESRA)

The amendments to the PESRA will incorporate references to the new Pay Equity Act to ensure that the legislation will apply to Parliamentary workplaces and ensure that compliance and enforcement provisions will respect parliamentary privilege.  More specifically, the proposed amendments will:

  • Create PESRA Part II.1, which will be dedicated to Pay Equity and provide that the new Pay Equity Act  applies to all parliamentary employers and employees, including those who do not meet the definitions of “employer” and “employee” under PESRA Part I;
  • Provide the Pay Equity Commissioner with the authority to conduct compliance audits and investigations of parliamentary entities, to issue compliance orders and notices of contravention and to deal with complaints. Notice will be provided to the Speakers before the Pay Equity Commissioner enters a place under the authority of a parliamentary entity;
  • Indicate that the sanction for non-compliance of decisions or orders will be tabling in Parliament by the Speaker(s);       Provide that appeals will be heard by the Federal Public Sector Labour Relations and Employment Board, instead of the Canadian Human Rights Tribunal, considering the Board’s expertise in the application of parliamentary privilege and to ensure appeals considered under different parts of PESRA are heard by the same adjudicative body. The member or panel of members of the Federal Public Sector Labour Relations and Employment Board assigned to hear the appeal will be able to confirm, vary or rescind the decision or order being appealed; and
  • Establish that Pay Equity regulations made under the legislation that apply generally to government departments will also apply to parliamentary entities. To respect parliamentary privilege, any regulations made pertaining to transfers and to enforcement of orders will not apply to parliamentary employers and employees.

Amendments to the Canadian Human Rights Act (CHRA)

The amendments to the CHRA will incorporate references to the new Pay Equity Act in the CHRA and align certain provisions of the CHRA with those of the new legislation. More specifically, the amendments will:

  • Expand the membership of the Canadian Human Rights Commission (Commission) to include the Pay Equity Commissioner as a full-time member;
  • Provide for the establishment of a Pay Equity Unit consisting of officers and employees of the Commission that support the Pay Equity Commissioner in fulfilling their duties under the Pay Equity Act;
  • Provide that the Pay Equity Commissioner will preside over Divisions established within the Commission to address complaints of discriminatory practice related to pay equity in federally regulated workplaces with less than 10 employees;
  • Expand the maximum number of members that can be appointed to the Canadian Human Rights Tribunal from up to fifteen to up to eighteen to provide for the appointment of members with knowledge and experience in pay equity matters; and
  • Direct pay equity complaints made against an employer covered by the new Pay Equity Act  to the complaint regime set up under that Act and clarify that any such complaints filed before the new Pay Equity Act is brought into force will continue and be resolved under the CHRA.
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