On October 29, 2018, the Government introduced the Pay Equity Act as part of Bill C-86, the Budget Implementation Act, 2018, No. 2. On December 13, 2018, the bill received Royal Assent.
The Pay Equity Act (An Act to establish a proactive pay equity regime within the federal public and private sectors) and the amendments to the Canadian Human Rights Act and the Parliamentary Employment and Staff Relations Act will bring about a dramatic shift in how the right to pay equity is protected in federally regulated workplaces. It will direct employers to take proactive steps to ensure that they are providing equal pay for work of equal value.
Under the regime, once the legislation comes into force, employers with 10 or more federally regulated employees will be required to:
- establish a pay equity plan (within three years of becoming subject to the Act) that examines any differences in compensation between positions of equal value that are mostly held by women and those mostly held by men;
- eliminate differences in compensation identified in the plan (within three to five years depending on the size of the employer and the total amount of the wage adjustments due); and
- revise and update the pay equity plan at a minimum of every five years to ensure that no gaps have been reintroduced and to close them if they have.
To ensure effective oversight and administration of the Pay Equity Act, Karen Jensen was appointed as a full-time member of the Canadian Human Rights Commission as of October 16, 2019. She was reappointed in September 2020. Once the Pay Equity Act comes into force, Ms. Jensen’s appointment will allow her to become the first federal Pay Equity Commissioner.
Currently, the proposed Pay Equity Regulations have been pre-published in Part l of the Canada Gazette . The Government is providing an extended comment period of 60 days (until January 13, 2021), to ensure that all interested parties have enough time to review the proposed regulations. Following this consultation period, the Government will look to a potential coming into force date for the Pay Equity Act and the Pay Equity Regulations later in 2021.