Overview of the Pay Equity Act

From: Employment and Social Development Canada

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Until the Pay Equity Act is in force, federally regulated employers must follow the current pay equity requirements under the Canadian Human Rights Act. Visit the Canadian Human Rights Commission website for more information on recourse under the current federal pay equity regime.

The federal government passed the Pay Equity Act (Act) on December 13, 2018. The Act will come into force on a day or days that the Governor in Council will set.

The Act introduces a new proactive pay equity regime for federally regulated workplaces with 10 or more employees. This includes:

Under this regime, employers will have to proactively examine their compensation practices. This is to ensure that they are providing equal pay to men and women doing work of equal value.

Pay Equity Plan

The central feature of the Act is that it requires employers to establish and periodically update a pay equity plan. In developing a plan, employers must:

  • identify the different job classes made up of positions in their workplace
  • determine whether each job class is predominantly male, predominantly female or gender neutral
  • determine the value of work of each predominantly female or male job class
  • calculate the compensation of each predominantly female or male job class, and
  • compare the compensation between predominantly female and male job classes doing work of equal or comparable value

Employers will have to establish their pay equity plan within 3 years of becoming subject to the Act. Once the plan is established, they will have to increase the compensation of any predominantly female job classes that are receiving less pay than their male counterparts. Some employers may be eligible to phase-in those increases over 3 to 5 years. In addition, they will have to update their plan every 5 years to ensure the following:

  • they are maintaining pay equity, and
  • they close any new pay gaps

Pay Equity Commissioner

The Act sets out that a Pay Equity Commissioner (Commissioner) will be responsible for the administration, enforcement and education surrounding the Act. The Commissioner will be a member of the Canadian Human Rights Commission. The Commissioner will also be responsible for dealing with any complaints of discriminatory practice related to pay equity under section 11 of the Canadian Human Rights Act. In doing this work, the Commissioner will be supported by a specialized Pay Equity Unit. This unit will be comprised of officers and employees of the Canadian Human Rights Commission.

Since September 19, 2019, Ms. Karen Jensen has been a full-time member of the Canadian Human Rights Commission. Ms. Jensen will serve as Canada’s first federal Pay Equity Commissioner when the Act comes into force. Please visit the Canadian Human Rights Commission’s website for more information on the following:

  • the work of the Pay Equity Commissioner and the Pay Equity Unit, or
  • how to file a pay equity complaint

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