Insights

Your new pay equity obligations – Federal regulations

Overview
Published on: August 11, 2021
Subjects:  Pay equity

Did you know? The Government of Canada has followed in the footsteps of Ontario and Quebec and is implementing proactive pay equity legislation affecting both private and public sector businesses. The Pay Equity Act (the Act) comes into effect on August 31, 2021, and replaces the complaints-based system of the Canadian Human Rights Act.

Affected employers have their work cut out for them and will have three years to get into compliance, starting from the date on which they became subject to the Act.

What’s it all about?

Objective

The purpose of the Act is to ensure that employees who occupy positions in predominantly female job classes receive “equal compensation for work of equal value.” This will be achieved through proactive measures to redress gender-based discrimination in the compensation practices and systems of employers.

Affected employers

All federally regulated public and private sector employers, such as banks, airlines and telecommunications companies, with at least 10 employees are subject to this new legislation.

Your obligations

Affected employers must prepare a pay equity plan in collaboration with the unions representing their employees, where applicable. The Act outlines the specific obligations and deadlines that apply. Some of your obligations include the following:

  • Form a pay equity committee of which at least two-thirds of the members are employees. If the organization has fewer than 100 employees and none of its employees are unionized, it is not obliged to form a committee.
  • Follow the steps of the plan: identify job classes and whether they are predominantly male or female, determine the value of work, calculate and compare compensation, and post the process and results.
  • Adjust compensation of predominantly female job classes for any difference in compensation identified.
  • Conclude this process by the third anniversary of the date on which the organization became subject to the Act, the initial deadline being August 31, 2024.
  • Post a revised version of the plan every five years.
  • File an annual statement with the Pay Equity Commissioner containing certain results from the pay equity process.

Pay Equity Commissioner

The position of Pay Equity Commissioner was created in order to help administer and enforce the Act and provide necessary information and assistance to people affected by the Act. Karen Jensen is the very first Commissioner and will be supported by a team specializing in pay equity. Her latest remarks indicate that her office is preparing educational material and a spreadsheet program to help companies undertake the pay equity review process.

 How to start your review

You should ask yourself a number of questions to help you start thinking about what you need to do and how you need to prepare to comply with Canada’s Pay Equity Act.

  • Is my organization subject to the Act? If so, what is the deadline for compliance?
  • Does my organization need to form a pay equity committee, and if so, what will be its role and who will need to participate in it?
  • Does my organization have certain features (for example, relating to job classes or existing compensation policies and programs) that allow me to request the establishment of an additional pay equity plan, subject to the approval by the Pay Equity Commissioner?

That said, in the short term, if your organization has at least 10 employees, you will have to post a notice to this effect within 60 days of the date of compliance. This notice will inform your employees of your obligation to comply and of the terms and conditions for the constitution of a pay equity committee, if applicable, whether or not certification units are present.

We can therefore conclude that organizations are facing a new compliance process that requires affected teams to engage in a great deal of reflection and perform additional work.

PCI Compensation Consulting has been helping companies of all sizes get into compliance with their pay equity obligations for over 20 years. Our team can answer your questions and help you prepare and carry out your pay equity review. Contact your PCI advisor or send us an email.

Contact us