Preliminary remarks
On August 31, the Canada Pay Equity Act (the “Act”) entered into force. The enactment of this law is intended to contribute towards bridging the gender wage gap to ensure that workers receive equal pay for equal work. The new legislation concerns both the public sector and private companies under federal jurisdiction that have at least ten (10) employees. The terms of application of this Act are similar to those applicable to Quebec companies under provincial jurisdiction.
A study carried out by the University of British Columbia discloses that the health crisis related to COVID-19 has forced more workers to remain at home, while there is an increase in workers in the workplace. According to this study, this situation has contributed to an increase in wage disparity between the genders. In this regard, Statistics Canada confirms this trend. The participation rate of women from 25 – 54 years of age has declined since the outset of the pandemic, primarily due to a higher rate of job losses than for men. According to the Government, one of the first objectives under this Act is to trigger long-term systemic changes recognizing the value of women’s work and guaranteeing them fair remuneration.
Obligations of companies governed by the new federal law
The primary aim of the Act is to require employers to draft and periodically update a pay equity plan, which shall:
- Determine job classes within their workplace;
- Determine whether each job class is predominantly male, female or neutral;
- Determine the value of work performed for each job class, whether predominantly female or male;
- Calculate compensation for each predominantly female and each predominantly male job class; and
- Compare compensation between predominantly female and predominantly male categories performing work of equal or comparable value.
