Back in February, we continued exploring the galaxy of Federal employment standards with a look at the new Work Place Harassment and Violence Prevention Regulations, which you can read here. Now we’re checking out some employment legislation that comes into force at the end of August and which looks to tackle the gender-based wage gap.
What is the Purpose?
The Federal Pay Equity Act (the “Act”) was introduced in 2018 and will finally come into force on August 31 of this year. The Act’s stated purpose is to “achieve pay equity through proactive means by redressing the systemic gender-based discrimination practices and systems of employers” and is part of the Federal Government’s commitment to “close the gender wage gap and ensure that workers receive equal pay for work of equal value.” It is supported by the Pay Equity Regulations (the “Regulations”), which are available here.
Who Does It Apply to?
The Act Applies to federally regulated employers with 10 or more employees, and mandates that employers establish and implement a pay equity plan that conforms to the standards set out in the Act. Employers that become subject to the Act on August 31, 2021 have three years to post the final version of their new pay equity plan – so get them done by August 31, 2024. If an employer becomes subject to the Act after it comes into force, they have three years from the date when they became subject to the Act to post their pay equity plan.
Developing a Pay Equity Plan
Under the Act, federal employers are required to develop their pay equity plan by:
- Identifying job classes within their workplace
- Determining the gender predominance of the identified job classes
- Determining the value of work performed by each job class
- Identifying the level of compensation associated with each job class
- Comparing compensation associated with predominantly female job classes with the compensation associated with predominantly male job classes of similar value
- Identifying predominantly female job classes that require an increase in compensation and setting a date when the increase in compensation is payable
Employee positions are considered to be in the same job class if they have similar duties and responsibilities, require similar qualifications, and are part of the same compensation plan and are within the same salary range.
Whether a job class is considered predominantly male or female is determined by reference to the following three factors:
- At least 60% of the positions in a job class are occupied by one gender.
- Historically, at least 60% of the positions in a job class were occupied by one gender.
- The job class is associated with a gender due to occupational stereotyping.
Pay Equity Committees
Where a federal employer has more than 100 employees or has 10-99 employees and some of those employees are unionized, they will be required to establish a pay equity committee (the “Committee”) to develop and revise the pay equity plan. The Committee must adhere to the following requirements:
- Have at least three members.
- Be at least 50 percent women.
- Have at least two thirds of the membership represent the employees to whom the pay equity plan relates.
- Have at least one member selected by the employer to represent it.
If some of the employees to whom the pay equity plan relates are not unionized, at least one member must be a person selected by those employees to represent them. If some employees are unionized, then there must be at least as many members to represent those employees as there are bargaining agents.
If an employer is unable to establish a Committee that meets these requirements, they are required to apply to the Pay Equity Commissioner for permission to create a Committee with different requirements.
Administration and Enforcement
The Pay Equity Commissioner (the “Commissioner”) is responsible for enforcing and administering the Act and the supporting Regulations. The Commissioner’s responsibilities include facilitating dispute resolution, offering assistance and education to employers and employees, and conducting audits of employers to ensure compliance with the Act. The Act is enforced by monetary penalties, and the maximum penalty that can be imposed depends on the number of employees at a workplace. For employers with 10 to 99 employees, the maximum fine is $30,000 for each violation. For employers with 100 or more employees, the maximum fine is $50,000 for each violation.
For the present, the Act does not apply to the governments of Yukon, Northwest Territories, Nunavut, and Indigenous governing bodies. Indigenous governing bodies are defined as a council, government, or other entity authorized to act on behalf of an Indigenous group, community, or people that holds rights under Section 35 of the Constitution. The Governor in Council may make an order that changes or cancels these exemptions at some point in the future.
The Act and Regulations have created many new requirements for federally-regulated employers, in order to address gender-based wage inequality. We are here to help you navigate these new laws and ensure your workplace complies with them. If you have any questions about what these changes mean for you, please feel free to contact Ryley Mennie, Lou Poskitt, or Connor Levy from our Workplace Law Group.