Help is just a call away! Talk to an HR expert now. +1 866-606-0149

Pay Equity Laws in Canada: Tips for Preventing Discrimination and Achieving Fair Compensation

Apr 3, 2023 | HR Canada

Pay equity laws are an important aspect of workplace fairness, and they are designed to ensure that employees receive equal pay for equal work. In Canada, pay equity legislation has been in place in multiple jurisdictions for several decades, and it continues to evolve to meet the needs of today’s workforce. In this blog, we will discuss the pay equity laws in Canada and provide some tips for ensuring fair compensation and preventing discrimination in the workplace.

What is Pay Equity?

Pay equity refers to the principle that individuals should be compensated equally for work of equal value, regardless of their gender. The goal of pay equity legislation is to eliminate pay disparities between men and women by ensuring that jobs of equal value are paid the same. Pay equity is not the same as equal pay for equal work, which refers to paying the same wage to employees who perform the same job. Rather, pay equity is about ensuring that jobs that require similar skills, effort, and responsibility are compensated equally.

Pay Equity Laws in Canada

In Canada, pay equity laws vary by province and territory. The federal government has its own pay equity legislation that applies to federal public sector employers and federally regulated private sector employers. The Canadian Human Rights Act prohibits discrimination on the basis of gender in employment and the Employment Equity Act requires employers to develop and implement employment equity plans to ensure that their workforce is representative of the diversity of the Canadian population.

Pay discrimination on the grounds of gender is prohibited in Ontario, British Columbia, Alberta, and Saskatchewan. Whereas, equal pay for same or similar work is a requirement of employment standards legislation in Ontario, Manitoba, Saskatchewan, Yukon, Newfoundland and, North West Territories.

Pay equity – “equal work for work of equal value” is required in separate pay equity legislation for the public sector in Manitoba, Nova Scotia, New Brunswick, and Prince Edward Island and for the public and certain private sectors in Québec and Ontario.

Pay Equity Act Ontario

In Ontario, the Pay Equity Act requires employers with 10 or more employees to establish a pay equity plan. The plan must identify and compare the value of female job classes to male job classes and ensure that employees in female job classes are compensated equally to employees in male job classes that require similar skills, effort, and responsibility.

B.C. introduces new pay transparency legislation

On March 7, 2023, the British Columbia government introduced Bill 13, the Pay Transparency Act, to promote pay transparency and reduce the gender wage gap. Once the legislation is passed, as of November 1, 2023, employers will be required to disclose salary ranges on job postings and will not be permitted to request information about an applicant’s pay history. Furthermore, employers will be prohibited from punishing employees who share their salary details with colleagues or prospective job candidates.

Beginning in November 2023, employers in British Columbia will have to gradually comply with the new requirement of publicly posting reports on their gender pay gap. The implementation will take place in stages based on the number of employees, allowing employers sufficient time to prepare.

  • Nov. 1, 2023: BC Public Service Agency and Crown corporations with more than 1,000 employees (ICBC, BC Hydro, WorkSafeBC, BC Housing, BC Lottery Corporation, and BC Transit).
  • Nov. 1, 2024: all employers with 1,000 employees or more
  • Nov. 1, 2025: all employers with 300 employees or more
  • Nov. 1, 2026: all employers with 50 employees or more

Tips for Ensuring Fair Compensation and Preventing Discrimination

  1. Conduct Job Evaluations: Employers should conduct job evaluations to determine the value of each job class in their organization. This will help to identify jobs that require similar skills, effort, and responsibility and ensure that employees in these job classes are compensated equally.
  2. Regularly Review Compensation: Employers should regularly review compensation to ensure that it is fair and equitable. This includes reviewing salaries, benefits, and other forms of compensation to identify any disparities.
  3. Develop Pay Equity Plans: Employers should develop pay equity plans to ensure that female job classes are compensated equally to male job classes that require similar skills, effort, and responsibility.
  4. Train Employees and Managers: Employers should provide training to employees and managers on pay equity and anti-discrimination policies. This will help to prevent discrimination and ensure that everyone in the organization understands the importance of pay equity.
  5. Foster an Inclusive Workplace Culture: Employers should foster an inclusive workplace culture that values diversity and inclusivity. This includes promoting gender equality, providing equal opportunities for advancement and growth, and creating a work environment that is free from discrimination.

In conclusion, pay equity laws in Canada are a crucial component of promoting fairness and equality in the workplace. Ensuring fair compensation and preventing discrimination is not only important for employees’ wellbeing but also for the success of organizations. By using the tips mentioned above, employers can take concrete steps to promote pay equity and prevent discrimination. As we continue to see new developments and updates to pay equity legislation across the country, it is essential that employers remain informed and take proactive steps to ensure that they are in compliance and promoting pay equity in their organizations.