Starting August 31st, 2021, most federally regulated employers will need to comply with the requirements of the new Pay Equity Act. The Act’s purpose is to ensure that employees receive fair compensation regardless of their gender.
The Act requires federally regulated employers with 10 or more employees to develop and implement pay equity plans over the next three years. To prepare their pay equity plan, employers will need to assess whether they are paying men and women equally for work of similar value and increase pay to under-paid female dominated jobs. Additionally, some employers (depending on the size of their workforce and whether they are unionized) will be required to establish pay equity committees to work on the plan.
To enforce the Act, the Pay Equity Commissioner may fine non-compliant employers up to $30,000 or $50,000, depending on the size of the company.
We will be providing a further Employer Alert with more details about the Pay Equity Act and its requirements soon. Most employers engage specialized consultants to assist them through the complex pay equity process.
If you are a federal employer with over 10 employees across Canada, we recommend you contact us to discuss compliance with the Act at: