May 21

Preparing for Federal Pay Equity, Toronto Employment Lawyer

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On December 13, 2018, the federal government’s Bill C-86, which among other things establishes a new Pay Equity Act (the “Act”), received royal assent.  The Act will create new requirements for federally regulated employers with the goal of ensuring that compensation of all employees who are in female-dominated jobs are brought up to the level of compensation of all employees in male-dominated jobs where the two jobs have similar “job value,” measured in terms of effort, responsibility, skill and working conditions.  In short, it aims to ensure equal pay for work of equal value.

The Act applies to federal workplaces with ten (10) or more employees including:

– Federal public services;

– Federal Crown agencies and private companies that operate a federal work, undertaking or business; and

– Any employer who has contracts worth over $1 million with the federal government under the Federal Contractor Program.

The Act requires these employers to establish a pay equity plan within three (3) years of the Act being proclaimed into force, and to review and update these pay equity plans at least once every five (5) years.  Different deadlines apply to provincially regulated employers that become subject to the Act due to becoming federally regulated after the Act comes into force.

The pay equity plan must do the following:

– Indicate the number of employees;

– Identify job classes within the workplace;

– Indicate what gender is predominant in each class;

– Evaluate the value of work performed by each job class;

– Identify the compensation associated with each job class;

– Compare the compensation associated with female- and male-predominant job classes of similar value;

– Set out the results of the comparison, identifying which female-predominant job classes require an increase in compensation and when increases in compensation are due; and

– Provide information on the dispute resolution procedure available to employees.

In terms of process requirements, there must be a committee that creates the pay equity plan, notice to all employees of this plan, and then implementation.  The company must also maintain pay equity after the initial plan and pay outs are made, and there are rules on how to do this in the legislation.  The members of the pay equity committee are specified in the legislation, as are the contents of the plan.  There are rights of appeal to a new federal Pay Equity Commission that will be part of the Canadian Human Rights Commission.  The Act also sets out a formula for how to compare male and female jobs.

The Act will come into force on a date to be proclaimed by the federal government and, as mentioned, there will be some grace period allowed for implementation.  In the meantime, it is highly recommended that federally regulated employers start reviewing their compensation systems to begin the process of implementing pay equity, which will take lots of time, expertise and resources to do.

If you have any questions about the foregoing legislative changes, contact Monkhouse Law today for a free 30-minute consultation.

About the Author: Miguel Mangalindan is a Senior Associate Lawyer at Monkhouse Law where he practices Employment, Human Rights and Disability Insurance Law.

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