On August 31, 2021, the Pay Equity Act and its Regulations came into force which created new requirements for federally regulated workplaces with 10 or more employees. The new legislation requires employers to proactively examine their compensation practices to ensure that they are providing equal pay to men and women doing work of equal value.
The Act also 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
After the employer develops the pay equity plan, a draft must be posted, as well as a notice to employees of their right to provide comments on the draft plan. Employees must be given 60 days to provide written comments.
Once the plan is established, employers 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 that 1) they are maintaining pay equity, and 2) they close any new pay gaps.
For an overview of the Pay Equity Act, visit the Government of Canada website.
For key timelines and examples of how to perform an employee count, visit the Canadian Human Rights Commission website.
To read more information about steps to compliance, visit the Trucking HR Canada website.