Authors: Mary Turan Susan Tang
The long-awaited draft regulations for the Canadian Federal Pay Equity Act have been released by the government. The draft regulations are now available for review: Pay Equity Regulations. Employers and interested parties can provide comments/feedback to the Government until January 13, 2021. These Regulations and their implementation ensure that Pay Equity is achieved and maintained for predominantly female jobs in federally regulated public and private sector workplaces.
This new regime applies to all federally regulated employers with 10 or more employees — includes some private-sector employers, the federal public service, parliamentary workplaces and the offices of the prime minister and other ministers.
Background / Context:
- The Canadian government passed the Pay Equity Act in 2018 (as part of Bill C-86 Budget Implementation Act, 2018)
- The Pay Equity Act received royal assent on December 13, 2018
Not sure if this applies to your organization? View the list of Federally Regulated Businesses and Industries here.
Key Takeaways from the Pay Equity Act
- The legislation effective date is not yet set; it is expected later in 2021; employers will have three (3) years to implement a Pay Equity Plan after the effective date is announced
- The draft regulations provide specific details on key elements of the Act including:
- Posting a notice in the workplace when an employer becomes subject to the Act
- Requirement to form a Pay Equity Committee consists of employer/employee representatives:
- Employers with 100 or more employees*
- Employers with 10 to 99 employees, some of which are unionized
*Note: every 5 years, this Committee must be formed to maintain and update Plan
- Information on using the Equal Average Method and the Equal Line Method including:
- The provision of formulae for proportional adjustments so that female jobs further below the average male compensation receive a larger increase
- What to do when the regression lines cross under the Equal Line Method, including a segmented line approach
- What to do when the organization does not have predominantly male jobs, including borrowing data from another employer or using fictional male job classes
- Using job evaluation results already determined by the employer and or a pay equity committee, as the case may be
- Understanding differences in compensation and what can be excluded from the analysis
- Posting of a draft Pay Equity Plan, and a final Pay Equity Plan
- Process for updating Pay Equity Plans under Maintenance requirements
Next Steps for Employers: Start Planning Now
As we have noted above, employers will have three (3) years after the effective date of the legislation is announced to implement their Plan. While the effective date of the legislation has not yet been set, the release of the draft Pay Equity Regulations represents an important milestone. Make no mistake: the new Federal Pay Equity program requirements are coming, and we are recommending that affected Employers start the planning process for their Pay Equity programs today.
Meeting the requirements of the Pay Equity Act may be daunting and complex, but there is no reason to delay. It will take time to perform the required process, such as job evaluations, and gathering critical data. Gallagher can help to determine what you need to do to become compliant, providing you with expertise and resources that help you navigate the complexities of the Pay Equity Act.
About Gallagher's Human Resources & Compensation Consulting Practice
Gallagher has been assisting organizations with compensation-related legislative compliance for over 30 years. Our areas of specialization include the Ontario Pay Equity Act, Quebec Pay Equity Act and most recently, the Federal Pay Equity Act. Given our extensive experience in the area of Pay Equity, Gallagher offers a variety of consulting services, ranging from in-depth, complex, historical analyses to over-the-shoulder or ad hoc Pay Equity guidance to HR.
Contact one of our pay equity consultants to discuss how you can ensure compliance with the new requirements of the Pay Equity Act.
