Resource database

Resource Sidebar

  • Closing Gender Wage Gaps

  • Employment and Social Development Canada

  • GGuide

  • Canadian Legislation

  • Human Resources, Legal


Pay Equity Act Backgrounder

Employment and Social Development Canada
This backgrounder provides an outline of the requirements for pay equity under the Pay Equity Act (2018) and its regulations. The new law applies to the federal public service, Crown agencies, and to private sector, federally regulated employers with 10 or more employees. The general suggestions regarding the implementation of pay equity have broader utility for any organization seeking to assess its renumeration policies and practices.

Responsibility for the enforcement of the new federal Pay Equity Act has been given to the Canadian Human Rights Commission. The Commission is establishing a Pay Equity Division that is being led by a newly appointed Commissioner. The Division is in the process of developing modern educational and software-based resources to be available by the end of 2020. This information will supersede the backgrounder for those employers to whom the new Act applies. To learn more, click here.

Steps to develop a pay equity plan:

  • Identify job classes and determine their gender predominance

Job classes are considered predominantly female or male if at least 60 percent of the positions in the class are currently or have historically been occupied by, or associated with, either women or men.

  • Determine the value of work

Evaluation method must take into account the skill, effort, and responsibility required to perform the work, and the conditions under which the work is undertaken.

  • Calculate the compensation

Calculate the hourly rate, including any form of remuneration payable for work (e.g. salary, commission, vacation pay, severance pay, bonuses, benefits, and contributions to pension funds).

  • Compare the compensation

Use the equal average method (compare average compensation of all predominantly male and female job classes of equal value) or the equal line method (create regression lines that illustrate the relationship between job value and hourly compensation for male and female job classes).

  • Increase compensation based on findings when necessary

Compensation should be payable in full once the pay equity plan has been posted.

To learn more, contact Employment and Social Development Canada here.