Federal Pay Equity

Canada’s federal Pay Equity Act (Act) was brought into force on August 31, 2021. It was created to ensure that federally-regulated workplaces in the public and private sectors with 10 or more employees provide equal pay to men and women for work of equal value. The Act is supported by the federal government’s Pay Equity Regulations.

Pay Equity Legislation is in place to establish pay equity between comparable male and female job classes. Employers to which the Act applies are required to create a Play Equity Plan according to the requirements outlined in the Act. Some companies must also form Pay Equity Committees. We recommend having your plan in place now in the event of an investigation by a pay equity officer that resulted from a complaint.

Employers with an average of 10 or more employers in the year before the Act came into force must have the Pay Equity Plans posted within three years of that date (August 31, 2024). Employers who became subject to the Act after August 31, 2021, must post the final version of their Pay Equity Plan no later than the third anniversary of the date on which the Act first applied to them.

Under the Act, the onus is on the employer to proactively analyze its compensation practices to ensure they are equitable and in compliance with its guidelines. There is no defense for non-compliance since the date your company became subject to the Act. The best way to achieve compliance is to create a Pay Equity Plan and regularly maintain it for ongoing compliance in the event of changes to or additions of jobs.

Establishing a federal Pay Equity Plan is a very complex, time-consuming task with many moving parts. We recommend starting your plan as soon as possible and retaining the services of HRWise to make the plan’s design, development, and maintenance much easier and stress-free.