Pay equity seeks to address systemic gender wage gaps within an organization, ensuring that all employees receive fair compensation for their work. The federal Pay Equity Act [PEA]came into effect on August 31, 2021.  Notably, the PEA requires federally regulated employers to post their final pay equity plans and communicate any resulting pay increases by September 3, 2024.

Pay Equity Committee

Under the PEA, employers must make “all reasonable efforts” to establish a pay equity committee if they have:

• 100 or more employees; or
• between 10 and 99 employees, where some or all are unionized.

Smaller employers that are not unionized may voluntarily establish a pay equity committee.

The PEA sets out the following requirements for a pay equity committee:

• The committee must be composed of at least three members;
• At least two-thirds of the members must represent the employees who are covered by the pay equity plan;
• At least 50% of the members must be women;
• At least one member must be selected by the employer to represent it;
• Where there are unionized employees, there must be at least one member selected by each of the bargaining agents; and
• Where there are non-unionized employees, at least one member must be selected by non-unionized employees to represent them.

Process to Establish a Pay Equity Plan

Employers and Committees (where applicable) must follow the following steps leading to the establishment of a Plan:

1. Identify the different job classes made up of positions in their workplace;
2. Determine whether each job class is predominantly male, predominantly female or gender neutral;
3. Determine the value of work of each predominantly female or male job class;
4. Calculate the compensation of each predominantly female or male job class, and
5. Compare the compensation between predominantly female and male job classes doing work of equal or comparable value.

Pay Equity Plan Requirements

Following that assessment, the employer must prepare a draft pay equity plan. As per the PEA, the plan must include the following:

• The number of employees considered to have been employed for the purpose of determining whether a Committee was required;
• Whether a Committee was established and, if so, whether the Committee meets the requirements established under the PEA;
• A list of the identified job classes to which the plan relates;
• Which job classes, if any, were determined to be predominantly female or male job classes;
• A description of the method used to determine the value of work performed in certain job classes, as well as the results of the valuation;
• A list of predominantly female job classes that require an increase in compensation under the PEA;
• A description of how the employer will increase the compensation for predominantly female job classes, including the amount, in dollars per hour, of the increase;
• The date on which the compensation increase is payable; and
• Information on the dispute resolution procedures that are available to employees under the PEA.

Employers must notify employees of their right to review and provide written feedback for the draft pay equity plan and provide them with 60 days to do so. To ensure employers meet the deadline to post the final pay equity plan, employers should post their draft plan by the end of June 2024.

By September 3, 2024, Employers must post the final pay equity plan in the workplace and provide notice to employees about any applicable increases in compensation resulting from the findings of the plan.

With respect to the September 3, 2024 deadline, employers should note that they may request an extension to post their pay equity plans. Extension requests must be made through the Office of the Pay Equity Commissioner’s Pay Equity Portal. To file a request, employers must complete the relevant form and describe efforts they undertook to post their pay equity plan before the September 3, 2024 deadline; explain why they are unable to post the plan by the deadline; and propose an extended deadline, among other information. Employers who submit an extension request must also provide evidence that they notified their employees of the request through a “Memo to all Employees” document found in the Portal.

Additional Obligations

Employers should also be mindful that their pay equity obligations continue after the final pay equity plan is posted. For example, each employer must provide an annual statement to the Pay Equity Commissioner and the pay equity plan must be updated at least once every five years.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.