Canada: Federal Employers, The Wait Is Over: New Federal Pay Equity Regime Coming August 31

Since the Pay Equity Act (the Act) received royal assent in December 2018, its coming into force has been highly anticipated. On June 24, 2021, by Order-in-Council the federal government announced that this legislation will come into force on August 31, 2021. 

As discussed in our recent publication, the Act imposes new proactive obligations on the part of federally regulated employers with 10 or more employees in both the public and private sectors. The new regime requires that these employers review gender pay equity issues in their workplaces and undertake a detailed protocol to address wage discrepancies. Among other things, within three years of its coming-into-force date, the Act  will require employers to create and implement a pay equity plan in which they identify gender predominance of certain job classes in their workplaces, compare female job classes to male job classes and where needed, adjust compensation of female job classes to remedy any gender wage gap. 

To accompany the Act, final pay equity regulations have been published in the Canada Gazette Part II and will also come into force on August 31, 2021. The draft regulations were pre-published in December 2020 and open for public consultation until mid-January. The final version reflects certain changes. Notably:

• the requirement to notify the commissioner of the voluntary establishment of a pay equity committee within 60 days was removed. Employers must still notify the commissioner in a timely manner;
• the requirement to submit an application to establish multiple pay equity plans within 12 months was removed;
• certain notices must now be provided to employees within 60 days.

The process to maintain pay equity has also been clarified under the final regulations, including the steps for taking workplace information "snapshots," analyzing the workplace information collected in the snapshots and comparing compensation for each snapshot.

Takeaways

As the Act will soon be in force, many federally regulated employers will soon be facing a new and robust set of obligations. These employers are encouraged to begin reviewing the legislation and its accompanying regulation to fully understand their obligations under this regime. Employers subject to the Act may also want to start to collect data to assist with the job comparison process and give some thought to which method under the regulations is most appropriate to undertake the job evaluation. As well, some employers may want to consider whether to seek authorization from the Pay Equity Commissioner to create multiple pay equity plans (as the presumption under the Act is there be one plan for the entire organization).