Ottawa Passes ‘Pay Equity’ Legislation To Narrow Salary Gaps

The federal government in Ottawa has passed its long-awaited ‘Pay Equity Act’ that goes into effect on August 31 and aims to narrow the salary gap between male and female workers.

The new legislation, which was first unveiled three years ago, means that Canadian employers in federally regulated sectors with 10 or more employees now have three years to identify and correct pay disparities within their workforces — disparities that most often result in women earning less than men.

Women in Canada's workforce earn approximately 89 cents for every dollar earned by men, according to government figures. Women also suffered more severe and longer-lasting economic losses than men during the pandemic, according to Statistics Canada.

About 1.3 million people, or 6% of Canadian workers, are employed in federally regulated sectors and will be impacted by the new legislation. That includes industries such as banking, air travel, railways, and Crown corporations.

The new federal regulations are meant to address that issue by forcing employers to conduct thorough reviews of their workforces with the goal of providing employees “equal pay for work of equal value.”

Employers will have to identify all roles in their organizations that provide similar levels of value, and then increase salaries when jobs are found to be underpaid.

Canada's pay equity commissioner, Karen Jensen, will be able to levy $30,000 fines on employers with up to 99 staff that don't comply with the new Pay Equity Act, and $50,000 fines on organizations with larger workforces.