For Ontario employers, employing part time and temporary workers is about to become a lot more expensive. On April 1, 2018, the "equal pay for equal work" amendments to the Employment Standards Act, 2002 (the "ESA") by Bill 148, the Fair Workplaces, Better Jobs Act 2017, come into legal effect.
Ontario employees have long had the protection of the Pay Equity Act, and similar provisions in the ESA, that prevented women (and men too) from being paid less than their peers on the basis of sex. As of April 1, 2018, the ESA will now provide for an entitlement for equal pay from an employer regardless of a difference in employment status.
"Difference in employment status", in respect of one or more employees, will now be defined as:
a difference in the number of hours regularly worked by the employees; or a difference in the term of their employment, including a difference in permanent, temporary, seasonal or casual status
As a result, employers will be required to pay casual, temporary, part-time, and seasonal employees the same rate as permanent and full time employees so long as:
- they perform substantially the same kind of work in the same establishment;
- their performance requires substantially the same skill, effort and responsibility; and
- their work is performed under similar working conditions.
The legislature has attempted to define "substantially the same" to mean "substantially the same but not necessarily identical." How this will be interpreted by the Ontario Courts is anyone's guess but likely it will be used to grant discretion to the Tribunal, Judge or Jury on whether two similar jobs are "substantially the same".
Differences in pay between employees of different sex or similar employment status are permitted so long as the difference in rate of pay is the result of:
- a seniority system – a system that pays employee based on length of service;
- a merit system – a system that pays employees based on merit: their skills, education, competence, etcetera;
- a system that measures earnings by quantity or quality of production – a piecemeal system or similar; or
- any other factor other than sex or employment status.
Employers should be careful to ensure that any system they are using to determine employee pay is being implemented fairly and communicated to employees in advance. Any measurements of quantity or quality should to the greatest extent possible be objective and recorded.
Any employee who believes that their rate of pay does not comply with the Equal Pay for Equal Work section of the ESA, may request a review from their employer. Employers are, thereafter, required to either:
- Adjust the employee's pay; or
- Provide a written response setting out the reasons for refusing.
As discussed in my article Important Upcoming Changes to the Ontario Workplace, any written response must be saved according to the new record keeping requirements in the ESA for five (5) years.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.