Equal Pay – Who Knew?

In the spring of 2018, the Ontario Liberal government enacted the Pay Transparency Act, which was aimed at trying to address the still-prevalent gender wage gap. According to the Pay Equity Commission, a wage gap of 26% remains for full-time workers. This means that for every $1.00 a man makes, a woman earns 74¢.

The Act, among other things, would have required employers to provide compensation ranges in job postings, provide pay transparency reports to the Ministry of Labour and disallow inquiries about an applicant’s compensation history during the recruitment process. However, the Act was delayed from its original commencement date of January 1, 2019, by the newly-elected PC government.

So now what?

Addressing the gender wage gap doesn’t actually end there as there are two existing pieces of legislation that employers need to follow. The first is the Pay Equity Act, which came into effect in the late 1980s and had a mandate to promote equal pay for work of equal value. The purpose of Pay Equity was to ensure that jobs done by women were compensated fairly when compared with male jobs of “equal value.”

Most employers at the time complied with Pay Equity on their required implementation date. The problem was that many organizations than just put in in a drawer and never looked at it again—and there is ongoing maintenance that needs to be followed.

Pay Equity is not just for employers back in the late 80s. It is still very much alive and if you are an organization in Ontario with 10 or more employees then you are required to implement Pay Equity. Now you may be thinking, we’re progressive; we pay people equitably. That may be the case, but you still need to go through the process to demonstrate to the Pay Equity Commission that comparable male and female jobs are, in fact, paid equitably. Even for those organizations who are certain they pay equitably, we consistently see that particularly in certain senior positions, (HR Manager, HR Director, Controller, VP Finance, CFO) if held by a woman will generally be paid less than their male counterparts.

In addition to Pay Equity, there is legislation under Ontario’s Employment Standards Act, 2000 that also deals with the gender wage gap—“equal pay for equal work.” With a few exceptions, an employer cannot pay one employee less than another employee (based on sex) when they perform the same kind of work. This takes into account that the job would require the same skills and effort, have the same amount of responsibility, and is performed under similar working conditions. This section of the Act (Part XII) is also protected under the Ontario Human Rights Code with respect to discrimination in employment.

So, what should your next steps be?

  1. As far as the Pay Transparency Act, there is nothing from a legislative perspective you need to do at this point unless it is mandated by the PC government.
  2. From a Pay Equity perspective you should check if:
    • you are required to do Pay Equity (i.e., have 10 or more employees);
    • have ever done Pay Equity and, if so,
    • maintained your Pay Equity Plan.
  3. And finally, from an ESA perspective that you don’t have any gender inequality in paying your employees.

Contact us for more information on ensuring you are compliant.