The Federal Pay Equity Act received royal assent in December 2018.

This month, the Canadian Government announced that the legislation will come into force on August 31, 2021.

What is the Pay Equity Act?

The Pay Equity Act establishes a proactive pay equity regime intended to ensure that women and men in federally regulated workplaces receive equal pay for work of equal value.

Section 2 of the Act sets out its stated purpose as:

“The purpose of this Act is to achieve pay equity through proactive means by redressing the systemic gender-based discrimination in the compensation practices and systems of employers that is experienced by employees who occupy positions in predominantly female job classes so that they receive equal compensation for work of equal value, while taking into account the diverse needs of employers, and then to maintain pay equity through proactive means.”

In Canada, the most recent data shows that for every dollar earned by a man, a woman earns 89 cents.

Who Is Covered Under the Act?

While the Pay Equity Act is a piece of Federal legislation and therefore applies across all of Canada, it does not apply to all workers.

Generally, the Act applies to persons employed in the public service and persons employed in connection with the operation of any federal work, undertaking or business, the definition of which is set out in s. 2 of the Canada Labour Code, which includes persons employed in the following sectors:

  • Air transportation, including airlines, airports, aerodromes and aircraft operations;
  • Banks, including authorized foreign banks;
  • Grain elevators, feed and seed mills, feed warehouses and grain-seed cleaning plants;
  • First Nations band councils (including certain community services on reserve);
  • Most federal Crown corporations, for example, Canada Post Corporation;
  • Port services, marine shipping, ferries, tunnels, canals, bridges and pipelines (oil and gas) that cross international or provincial borders;
  • Radio and television broadcasting;
  • Railways that cross provincial or international borders and some short-line railways;
  • Road transportation services, including trucks and buses, that cross provincial or international borders;
  • Telecommunications, such as, telephone, Internet, telegraph and cable systems; and
  • Uranium mining and processing and atomic energy.

Certain exceptions exist with regard to persons working in student employment programs.

It also applies to persons employed by the governments of Yukon, the Northwest Territories and Nunavut.

How Does It Work?

As explained in the government announcement, the Pay Equity Actwill require employers to develop and implement pay equity plans:

“Once in force, employers with 10 or more employees will have three years to develop and implement their proactive pay equity plans. The Pay Equity Commissioner will be responsible for the administration and enforcement of the Act and its Regulations and she will continue to work closely with federally regulated private- and public-sector workplace parties to provide support and guidance on the implementation of this proactive pay equity regime.”

Additionally, larger employers must establish pay equity committees, although smaller employers may chose to do so voluntarily.

Get Advice  

At DBH Law, we know that disputes in the workplace can be stressful, disruptive, and time-consuming. When such issues arise, they are best handled by experienced employment counsel who can guide matters to a timely and effective resolution.

The team at DBH Law has more than 25 years of experience helping employers and employees navigate complex employment issues. We pride ourselves on our common-sense approach to the law and our ability to maintain a cost-effective approach on behalf of our clients. When clients come to us, we work to resolve their matter while minimizing their legal and financial risk and avoiding protracted litigation.

The lawyers and staff at DBH Law believe in relationship-building and fostering strong, long-term connections with our clients. This approach allows us to provide tailored, trusted, bespoke advice to help clients manage their risks and reach their goals. We pride ourselves on the fact that most of our clients were referred to us by former and current clients. To learn more about how we can help you, us online or by phone at 403-252-9937.