Pay Equity

Fairness and Justice in Compensation

The Canadian Federal Pay Equity Act promises fairness and justice in compensation. It's more than just a law; it's a call to action that seeks to eliminate the age-old injustice of wage discrimination for those who identify as men and those who identify as women. The Act ensures that jobs requiring similar levels of skill, effort, responsibility, and working conditions are paid equally, irrespective of whether they are predominantly held by men or women.

Consider the scenario where two occupations – one predominantly female like nursing, and another predominantly male like engineering – require similar qualifications and responsibilities. Yet, one is paid less solely because of the gender demographics of the field. This is the reality the Pay Equity Act aims to change. Nursing, with its high levels of skill, responsibility, and emotionally demanding work, should not be undervalued simply because it is a female-dominated field.  

By breaking down work into its key components, pay equity tackles these pervasive biases and tendencies that we often hold unconsciously and is in spite of our best efforts to be fair and equitable.  

A Transformative Shift

The Act marks a transformative shift from a reactive, complaint-based system to a proactive approach. Federally regulated employers are now mandated to rigorously analyze their compensation practices and develop pay equity plans. This proactive framework doesn't just address disparities as they are reported; it anticipates them, identifies them, and mandates their resolution.

This is a moment for all Canadians to be proud, but it's also a moment that calls for action. Its success depends on its implementation, on the vigilance and commitment of employers, employees, and society at large. Pay Equity is proven to reduce the pay equity gaps in provinces where it is implemented, so we are confident it would also work at the federal level.

Organized Labour lobbied hard to bring the requirement to meaningfully tackle pay inequity to the federal realm.  Finally, employers must work in partnership with employee representatives to create workplaces where pay equity is not just a policy but a principle. Employees must remain informed, engaged, and ready to uphold their right to equal pay for work of equal value. And society must continue to advocate for and support legislation that promotes fairness and equality.

Establishing a pay equity plan

Establishing a pay equity plan, in a unionized environment involves forming a committee responsible for assessing pay equity, identifying job classes, analyzing compensation systems, and recommending pay adjustments. 

This committee, comprising representatives from various stakeholder groups, ensures diverse perspectives and equitable decision-making. It facilitates collaboration and consultation, allowing comprehensive analysis of job classes, compensation structures, and potential wage disparities, thereby ensuring collective and fair decision-making in pay equity matters.

Maintaining Pay Equity

Under the Canadian federal Pay Equity Act, maintenance refers to the ongoing process of ensuring pay equity within an organization. This is a breakdown of what that process involves:

  • Formation of Pay Equity Committee: Employers typically need to form a pay equity committee responsible for evaluating compensation practices and identifying new wage disparities.
  • Annual Declaration of Compliance: Employers are required to make a yearly declaration confirming their adherence to the Act's stipulations.
  • Five-Year Review Cycle: Employers must conduct a thorough reassessment and update their pay equity plans every five years, ensuring that pay equity is a persistent and evolving practice.
  • Reformation of Pay Equity Committee: During maintenance cycles, employers reform the committee to assess pay practices and identify wage disparities.
  • Correction of Identified Wage Gaps: If new wage gaps are found during these reviews, the employer is mandated to implement corrective measures to resolve them.
  • Transparency and Accountability: These annual declarations provide transparency and allow for the monitoring of an employer's ongoing compliance with pay equity requirements.
  • Proactive and Sustainable Approach: The combination of a five-year maintenance cycle and annual declarations are designed to foster a proactive and enduring approach to achieving and upholding pay equity in Canada, preventing the reemergence of wage disparities and ensuring employers maintain equitable compensation practices.