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In today’s rapidly evolving workplace landscape, understanding and complying with pay equity legislation is crucial for both business owners and HR professionals in Canada. Ensuring fair compensation practices not only fosters a diverse and inclusive work environment but also helps avoid costly legal consequences. However, navigating the intricacies of pay equity legislation in Canada can be challenging due to variations between provinces and business sizes.

We will delve into the intricacies of pay equity legislation in Canada, highlighting key differences between provinces and various levels of business. We will also provide essential links to government websites for reference, helping you stay informed and compliant with the law.

Understanding Pay Equity Legislation in Canada

What is Pay Equity?

Pay equity refers to the principle of ensuring that individuals receive equal pay for equal work, regardless of their gender, race, or other protected characteristics. It is a fundamental component of promoting workplace fairness and addressing historical wage disparities.

Why is Pay Equity Important?

Pay equity promotes economic fairness, gender equality, and social justice. It helps create a workplace where employees are compensated based on their skills, experience, and responsibilities rather than their personal attributes. Failure to comply with pay equity legislation can result in legal consequences, reputational damage, and a less engaged workforce.

Key Legislation and Agencies

In Canada, two key pieces of legislation address pay equity:

• The Canadian Human Rights Act: This federal legislation prohibits discrimination in employment on various grounds, including gender. It lays the foundation for pay equity requirements at the national level.

• The Pay Equity Act: This legislation applies specifically to the federal public sector and federally regulated private sector employers. It outlines the obligations and reporting requirements related to pay equity.

Pay Equity at the Federal Level

The Canadian Human Rights Act

The Canadian Human Rights Act is the overarching legislation that establishes the principle of equal pay for equal work. It applies to all employers in Canada, regardless of their size or location. Under this act, employers must not discriminate in compensation based on prohibited grounds, including gender.

The Pay Equity Act

The Pay Equity Act, which is separate from the Canadian Human Rights Act, applies to employers under federal jurisdiction, such as banks, telecommunications companies, and federal government departments. It mandates a proactive approach to pay equity, requiring employers to assess, develop, and maintain pay equity plans.

Reporting Requirements

Employers subject to the Pay Equity Act must regularly report on their pay equity progress. The specific reporting requirements can be found on the official website of the Canadian Human Rights Commission, which oversees the enforcement of pay equity legislation at the federal level.

Provincial Variations in Pay Equity

It’s important to note that pay equity legislation is not uniform across Canada. Each province and territory may have its own legislation and regulations regarding pay equity. Here’s a brief overview of variations in some key provinces:

Ontario

• In Ontario, the Pay Equity Act applies to public sector employers and designated private sector employers. Public sector employers must comply with the act’s provisions, while designated private sector employers must develop a pay equity plan if they have 10 or more employees.

Quebec

• Quebec’s pay equity legislation is governed by the Pay Equity Act (Act respecting pay equity). It applies to both public and private sector employers. Quebec’s approach to pay equity is often considered a model for other provinces.

British Columbia

• British Columbia also has a standalone pay equity legislation that was rolled out May 11, 2023. 

Alberta

• Alberta is the only province that lacks standalone pay equity legislation. However, the Alberta Human Rights Act prohibits discrimination in compensation based on gender and other protected grounds.

Other Provinces and Territories

Each province and territory may have unique legislation and regulations related to pay equity. It’s essential to consult the specific legislation and resources for your region to ensure compliance. 

Pay Equity and Business Size

Pay equity legislation in Canada can vary based on the size of your business. Here’s how it typically applies to different business sizes:

Small Businesses

Small businesses, particularly those with fewer than 10 employees, may not be subject to pay equity legislation in some provinces. However, it’s crucial to review the legislation in your specific province to determine your obligations.

Medium-Sized Businesses

Medium-sized businesses may have specific requirements depending on their jurisdiction. In many cases, these businesses are required to assess and address pay equity if they have a certain number of employees.

Large Corporations

Large corporations, especially those under federal jurisdiction, are typically subject to more stringent pay equity requirements. They may be required to develop comprehensive pay equity plans and regularly report on their progress.

Steps Towards Pay Equity Compliance

Complying with pay equity legislation involves several key steps:

Assessing Your Current Pay Equity Status

• Conduct a thorough review of your organization’s compensation practices.
• Identify any existing gender-based wage disparities.
• Determine whether your business is subject to federal or provincial pay equity legislation.

Developing a Pay Equity Plan

• If required, create a pay equity plan that outlines how you will address wage disparities.
• Ensure your plan aligns with the specific requirements of your jurisdiction.
• Seek expert guidance or consulting if necessary to develop an effective plan.

Implementing and Monitoring Pay Equity

• Implement the strategies outlined in your pay equity plan.
• Monitor progress and regularly review compensation practices.
• Make necessary adjustments to maintain pay equity over time.

Addressing Discrepancies

• If discrepancies in compensation are identified, take corrective action promptly.
• Ensure ongoing compliance with pay equity legislation.
• Communicate your commitment to pay equity to employees and stakeholders.

Resources for Staying Informed

Government Websites

For the most up-to-date information on pay equity legislation in your specific province or at the federal level, refer to the following government websites:

• Government of Canada – Pay Equity
• Canadian Human Rights Commission 
• Ontario Pay Equity Commission 
• Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) – Quebec 
• British Columbia Pay Transparency Act
• Government of Alberta – Pay and Employment Equity 

Additional Resources

In addition to government websites, consider exploring the following resources:

• Canadian Centre for Policy Alternatives
• Canadian Women’s Foundation
• Equal Pay Coalition 
• HRPA (Human Resources Professionals Association)

Understanding and complying with pay equity legislation in Canada is essential for creating a fair and inclusive workplace. Whether you’re a business owner or an HR professional, staying informed about federal and provincial requirements is crucial. By following the steps outlined in this guide and utilizing the provided government resources, you can navigate the complexities of pay equity legislation and contribute to a more equitable and prosperous Canadian workforce. 

However, it’s important to keep in mind that this legislation is rapidly evolving, so it’s critical to ensure you are constantly checking that your business is in compliance, otherwise the government will be imposing hefty fines. 

If you need help navigating this new pay equity legislation in your business, book a consultation at lisa@larcohr.com.