Canada: Does The Pay Equity Act Really Correct The Gender Pay Gap?

The short answer? No.

First, pay equity is different from equal pay. The notion of equal pay means equal pay for equal work, whereas pay equity involves looking for equal pay, but for a different job deemed equivalent.

The purpose of the Pay Equity Act [Act] is to "redress differences in compensation due to the systemic gender discrimination suffered by persons who occupy positions in predominantly female job classes."¹

Systemic discrimination is a form of discrimination inherent to the system, that is, an established order stemming from practices that are generally involuntary and seemingly neutral, but which result in wage gaps between jobs traditionally held by men and those held by women.²

To achieve pay equity, an employer must analyze, according to various criteria, the predominantly female and male positions within his company only, and then determine their equivalence and correct the wage gaps accordingly. When an enterprise within provincial jurisdiction employs 10 or more employees, it is subject to this obligation³ and must undertake this analysis within the framework provided by the Act.

Although the Commission des normes, de l'équité, de la santé et de la sécurité du travail provides employers with tools to assist them in this analysis, it is nonetheless subjective, and will not take into account the entire labour market: it will not consider wage differentials from one company to another.

Also, the Act is of no assistance in correcting the socio-economic factors on which the gender pay gap is based. This includes the predominance of women in non-standard jobs and the fact that a majority of women work for smaller companies or in the public sector.

The traditional factors that are at the root of the gender pay gap are education, work experience, the type of profession and unionization. In recent years, women have been more educated, but wages have not increased proportionately.⁴

In 2020, women were earning an average of 92% of men's wages in Quebec.⁵

For the "education, law and social, community and government services" category, women earned a measly 77% of men's wages.

For the application of the Act, only the number of people who fall within the definition of employee is considered. For instance, people such as students working during their holidays, interns, the self-employed and senior management officers,⁶ cannot benefit from the correction of wage gaps.

It should be noted that in Quebec, the proportion of women in management positions for the year 2020 was 47.3%, while women represented 42.7% of senior management positions.⁷ In Canada, women's representation on boards of directors only ranges from 19.4% to 35.2% depending on the industry.⁸

As a result, women, who hold nearly half of senior management positions, do not benefit from the protection of the Act. Neither do the small percentage of women who manage to break the famous "glass ceiling" and get appointed on a board of directors.

Nevertheless, the Act does help to address certain wage inequities on lower-level positions within a given company. On the other hand, it fails to address issues such as the glass ceiling or salary gaps on higher-level positions. Even with the best will and putting all the necessary hours into it, a woman who climbs the corporate ladder and finally reaches a high-level position still cannot hope for equal pay to this day. This is sufficient to erode her motivation.

May this message be heard.

Footnotes

1. Pay Equity Act, CQLR c E-12.001, s. 1.

2. François Robitaille, "L'essentiel de l'équité salariale", Ordre des conseillers en ressources humaines agréés, 2020, online.

3. Supra, note 1, s 4.

4. Aneta Bonikowska, Marie Drolet, Nicole M. Fortin, "Earnings Inequality and the Gender Pay Gap in Canada: The Role of Women's Under-representation Among Top Earners", Statistics Canada, released March 7, 2019, (https://www150.statcan.gc.ca/n1/pub/11-626-x/11-626-x2019002-eng.htm).

5. Statistics Canada, Average and median gender wage ratio, annual, table 14-10-0340-02, online.

6. Supra, note 1, s 8 par (6), and 9.

7. Statistics Canada, Proportion of women and men employed in management positions, annual, table 14-10-0335-03, online.

8. Statistics Canada, Representation of men and women on boards of directors, table 33-10-0218-01, online.

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