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The Latest in Employment Law: A Stewart McKelvey Newsletter – Changes to the federal pay equity scheme expected in 2018

Brian Johnston, QC and Julia Parent

In response to the report of the House of Commons committee on pay equity, the federal Liberal government announced its intention to bring in legislation to better ensure that all employers in federally regulated sectors have men and women get equal pay for work of equal value (otherwise known as “pay equity”). Pay Equity is significantly different from equal pay for equal work, which is already required throughout Canada. Although New Brunswick, Nova Scotia and Prince Edward Island have enacted pay equity legislation, that legislation applies only to government bodies/agencies. It is noteworthy that members in the House of Assembly in Newfoundland and Labrador unanimously voted to start the process of enacting pay equity legislation in the province on International Women’s Day 2017.

The big expected change in federal law is to change the current, complaint-based pay equity scheme as set out in the Canadian Human Rights Act, and the Equal Wage Guidelines to a proactive model. Under the current model, while employers must ensure their compensation schemes are compliant so as to avoid a complaint, there are no additional proactive steps that must be taken.

What you need to know.

According to the federal government, the forthcoming legislation “will take a ‘proactive’ approach that’s aimed at helping employers comply with the law rather than forcing employees to lodge complaints about discriminatory wages”.

While there have not been many indications regarding the content of the forthcoming legislation, it will likely resemble the models currently in place in Ontario and Quebec and, if the recommendations in the report of the House of Commons Committee on pay equality are followed, will apply to all federal employers with 15 or more employees.

The proactive pay equity models in Ontario and Quebec require that employers establish and maintain compensation practices that provide for pay equity. The onus is on employers to design a comparison system and compare jobs to ensure that pay equity exists. Once pay equity has been achieved, it must be maintained. There are also posting and reporting requirements that may apply.

Planning for the future.

In light of the forthcoming legislation, which is expected to be tabled in 2018, federal sector employers should familiarize themselves with the “proactive” portions of the Ontario and Quebec pay equity legislation, including the process of comparing jobs, posting, the role of unions and implications for collective bargaining, and the sort of reporting obligations which have created such a stir with the UK’s approach to pay equity.

This update is intended for general information only. If you have questions about how the information or tips above may affect you, please contact any member of our labour and employment group.

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