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What Should Employees and Employers Know About Workplace Pay Equity?

Equal pay for work of equal value. In a nutshell, that’s pay equity. Canada’s new federal Pay Equity Act came into force on August 31, 2021, and now applies to all public and private employers with more than ten employees. While this Act aims to ensure women’s work is compensated fairly, it applies across the board. 

In Ontario, pay equity is protected under the Human Rights Code. You cannot be discriminated against in this fashion because of your race, ancestry, place of origin, colour, or ethnic origin. You should also not be discriminated against due to your sexual orientation, gender identity, disability, age, marital status, family status, or record of offences. A lack of pay equity could potentially occur under any of these. To file a claim, you can do so through the Ministry of Labour.

Here is what employees and employers should know about pay equity in the workplace.

1. Pay Equity Is A Human Right

Pay equity is an internationally recognized human right. It ensures that two different jobs that contribute equal value are to be paid equally. It ensures men and women, and people of all backgrounds receive fair, equal pay so long as the work they provide is of equal value.

2. Why Pay Equity Is Important

There has been a persistent undervaluation of women’s work. A woman in Canada earns $0.89 for every dollar a man earns, equivalent to an 11% wage gap between men and women. Jobs where women are more likely to be employed than men are typically paid less, even when comparable skill, effort, and responsibility are present. Pay equity aims to close this gap and eliminate gender-based discrimination in the pay practices of employers across the country.

3. Understanding Your Legal Obligations As An Employer

An employer has some legal obligations to adhere to with pay equity in the workplace. Hiring an employment lawyer such as ELT can aid you in analyzing pay equity at your organization. An employment lawyer can assist with drafting contracts, compensation packages, and termination agreements and represent you before employment standards tribunals and more.

4. The Pay Equity Act Motivates The Employer

The Pay Equity Act puts the responsibility on the employer to assess, on a routine basis, if jobs commonly held by women in an organization are earning less than equal pay for work of equal value. These analyses make it likely that specific jobs will require a salary increase while considering qualifications, responsibilities, effort, and overall working conditions. All employers that qualify under the Act are required to develop a pay equity plan.

5. Creating a Pay Equity Committee

Employers are required under the Act to create a pay equity committee, consisting of the employer and employees to collaborate and work together in achieving how pay equity processes are to be carried out. It is a requirement for pay equity committees to consist of a minimum 50% representation of women. This committee’s responsibilities is to complete an evaluation of compensation practices at least every five years.

6. Explaining Pay Discrepancies

Upon conducting a pay equity analysis, you may find discrepancies. If these can be explained with legitimate, non-discriminatory reasons, no further action is required. As an example, seniority, education, and job-specific experience are considered legitimate reasons to offer pay differences. If there are unexplained pay disparities found, a business should correct them with immediate action.

7. Employers Should Document Pay Decisions

Often, pay equity claims aren’t made until years after certain pay decisions are made. Some employers may not have the documentation to support past pay decisions or not remember why decisions were made like they were. This is why it is becoming increasingly important for all employers to document.

8. Filing a Complaint to Your Pay Equity Committee

Under this system, an employee can file a complaint to the Pay Equity Commissioner within 60 days of becoming aware of alleged misconduct. This includes an employer influencing or interfering with the selection of employees for the pay equity committee.

The committee will consider whether there has been any retaliation against an employee relating to pay equity. They will also assess if an employer has acted in bad faith or discriminatory manner in the context of pay equity work. If the complaint fails to be resolved, an employee may choose to pursue legal action.

 9. What To Do If Your Employer Is Not Maintaining Pay Equity

If you are an employee that has been wrongfully dismissed or you believe your employer is violating your right to pay equity, an employment lawyer may be able to help. You may have been penalized for discussing pay with co-workers or asking for a raise. Similarly, you may make an accusation of disparity in pay that has gone unaddressed or unresolved. These are issues an employment lawyer can assist with.

If an employee makes a claim or files a complaint relating to equal pay for equal work, an employer cannot punish or threaten to punish an employee for exercising their right. Contact an employment lawyer if you need further legal guidance.