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Government of Canada Announces Pay Equity Act Coming into Force August 31

Aug 4, 2021

On October 29, 2018, the Government introduced the Pay Equity Act as part of Bill C-86, the Budget Implementation Act, 2018, No. 2. On December 13, 2018, the bill received Royal Assent.

On July 7, 2021, the final Pay Equity Regulations were published in the Canada Gazette, Part II. They will come into force with the Pay Equity Act on August 31, 2021.

The Act and the amendments to the Canada Human Rights Act and the Parliamentary Employment and Staff Relations Act bring an important shift to how pay equity is protected in federally regulated workplaces.

The Act directs employers to take steps to ensure that they are providing equal pay for work for equal value.

The Act requires employers with 10 or more federally regulated employees to:

  • Establish a pay equity plan within three years of becoming subject to the Act. Plans must examine any differences in compensation between positions of equal value that are mostly held by women and those mostly held by men;
  • Eliminate differences in compensation identified in the plan (within 3 – 5 years, depending on the size of the employer and the total amount of the wage adjustments due); and
  • Revise and update the pay equity plan at a minimum of every 5 years to ensure that no gaps have been reintroduced and close them if they have.

Employers will be required to post a notice by November 1, 2021, informing their employees that they will establish a pay equity plan. Employers of 100 or more, or with unionized employees, will need to form a pay equity committee made up of employer and employee representatives.

Employers must pay any compensation adjustments owing, as well as post their pay equity plans, by September 3, 2024.

The federal pay equity regime will be under the jurisdiction of the Pay Equity Commissioner, a member of the Canadian Human Rights Tribunal. On October 16, 2019, Karen Jensen was appointed as a full-time member of the Canadian Human Rights Commission. Once the Act comes into force, Ms. Jensen will become the first federal Pay Equity Commissioner, and will oversee the new pay equity regime.

The Pay Equity Division of the Tribunal is in the process of developing guidance and information documents to help employers, employees and unions understand their obligations and rights under the new Act. A downloadable tool is being developed for small and medium sized employers to build a Pay Equity Plan by inputting their compensation and job data.

At UPFH, our lawyers have assisted unions and employees to navigate pay equity issues for decades. We assist our clients with advice regarding gender-neutral comparison systems, job evaluations, pay equity plan design and pay equity maintenance. We also represent clients in litigation in a variety of forums to fight for workers’ rights to pay equity. For more information, or for a consultation, please contact Susan Ursel or Karen Ensslen.

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