Overview of the Pay Equity Act

From: Employment and Social Development Canada

The federal government passed the Pay Equity Act (Act) on December 13, 2018. The Act, Part II.1 of the Parliamentary Employment and Staff Relations Act and the Pay Equity Regulations came into force on August 31, 2021.

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

Under this regime, employers 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 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 Pay Equity Commissioner administers and enforces the Act by:

  • Providing tools and guidance to employers, employees and their representatives
  • Resolving disputes, and
  • Ensuring compliance with the Act

On November 1, 2023, Lori Straznicky was appointed as Canada's federal Pay Equity Commissioner and a full-time member of the Canadian Human Rights Commission (CHRC) for a term of 5 years. Please visit the pay equity page of the Canadian Human Rights Commission's website for more information.

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