Increase awareness of Pay Equity
As you prepare to implement the requirements under the Pay Equity Act, it is a good idea to provide straightforward information to employees about pay equity and the process that will be undertaken.
- For example, employees may benefit from knowing that a pay equity analysis will be conducted to determine the value of jobs done mainly by women and the value of jobs done mainly by men in the organization and to determine if there is a pay gap between male and female jobs that are the same value.
By informing employees about pay equity and the process by which the organization will comply with the Pay Equity Act (i.e. the creation of a pay equity plan), organizations can create the optimal conditions for implementing pay equity.
It is important that employees understand not only what pay equity is, but also what their role is in the process:
- For those organizations where a pay equity committee will be required (see below), employees will need to understand how they will be represented on the committee and what the representatives will do.
- In organizations where the employer is responsible for preparing the pay equity plan (see below), employees should be informed that they may be involved in reviewing job descriptions and providing information about their job duties. Employees should be informed that their participation in the pay equity process is important to meeting the requirements of the Act.
As a first step in developing a pay equity plan, employers must post a notice that sets out their responsibilities to:
- Establish a pay equity plan;
- Inform employees that they may request the employer to put in place a pay equity committee;
- Put in place a pay equity committee, should they be required to do so; and,
- Inform non-unionized and unionized employees of their right to representation on the pay equity committee.
For more information about Pay Equity in Canada, you can watch our video: https://www.youtube.com/watch?v=LRJ8AyKL_8M
Templates for this notice are available here, including a default template and an updated template to account for an authorization to create multiple pay equity plans. For more instructions on how to use those templates or create your own, you can refer to the Guidance - How to develop your Pay Equity Act Notice.
Establish Pay Equity Committee
A pay equity committee:
- is a group of individuals who come together to develop a pay equity plan for their workplace;
- is a joint committee that includes employees, bargaining agents and employers; and,
- promotes employee participation through collaborative decision-making.
Employee participation can improve employee knowledge, buy-in and perceptions about the fairness of results.
Why do you establish a pay equity committee?
Pay equity committee members participate in the development and updating of the pay equity plan.
This means that members will have to work together during each step of the pay equity exercise (Refer to Table 1: Role of the Pay Equity Committee below).
Creating a pay equity plan with a pay equity committee enhances the confidence employees have in the pay equity process and plan.
A diverse pay equity committee may also help ensure that work done by women is properly valued.
|Steps||Role of Pay Equity Committee||Role of Employer|
|Notify employees of their employer’s pay equity obligations||No||Yes|
|Establish a pay equity committee||No||Yes|
|Identify job classes in the workplace (i.e. positions that share certain similarities)||Yes||No|
|Determine which job classes are commonly held by women and which ones are commonly held by men||Yes||No|
|Value the work done in each of these job classes||Yes||No|
|Calculate total compensation in dollars per hour for each predominantly male and female job class||Yes||No|
|Compare compensation to determine whether there are differences in compensation between job classes of equal value||Yes||No|
|Establish the contents of the pay equity plan||Yes||No|
|Post a draft of the pay equity plan and a notice to employees of their right to provide comments on the draft plan||No||Yes|
|Provide employees with 60 days to provide written comments on the plan||No||Yes|
|Receive and consider any comments provided by employees when creating the final version of the pay equity plan||Yes||No|
|Provide any increases in compensation||No||Yes|
|File an annual statement with the Pay Equity Commissioner||No||Yes|
Who should form a pay equity committee?
The following employers must form a pay equity committee to develop a pay equity plan:
- those with 100 or more employees; and,
- those with 10 to 99 employees, if some or all are unionized.
An employer with 10 to 99 non-unionized employees is not required to form a pay equity committee but may decide to do so on their own initiative or at the request of an employee. Should this be the case, they must notify the Pay Equity Commissioner that they are doing so.
When should you establish a pay equity committee?
Establishing a pay equity committee is one of the first steps in the pay equity process. Members of the committee will be responsible for carrying out the steps of the pay equity plan. This means that the pay equity plan is not truly started until the pay equity committee is struck.
How do you establish a pay equity committee?
A pay equity committee must have at least three members and meet the following requirements:
- at least two-thirds must represent the employees who are covered by the plan;
- at least 50% of the members must be women;
- at least one member selected by the employer to represent it;
- where there are unionized employees, at least one member selected by each of the bargaining agents; and,
- at least one member selected by non-unionized employees to represent them.
It should be noted that an external resource can also be part of the pay equity committee (e.g. the employer or the bargaining agent may appoint a specialized human resources consultant to represent them).
Employers must give employees access to both workplace space, equipment and time to select their pay equity committee member(s).
The composition of the pay equity committee should be diverse both in terms of knowledge and representation.
For more detailed information, you can refer to the Pay Equity Factsheet: Promising Practices for Creating and Working in a Pay Equity Committee
How does a pay equity committee work?
Pay equity committee members should work collaboratively to develop a pay equity plan.
Employers must give employees access to both workplace space, equipment and time to attend and prepare for meetings or participate in training.
All workplace parties (employers, bargaining agents, employees) have a responsibility to provide members of the pay equity committee any information necessary for the development of the pay equity plan. Pay equity members have an obligation to keep this information confidential.
Decisions by members can be made through consensus or through a voting process. A vote can be held only if at least…
- One member who represents the employer;
- One member for each bargaining agent; and,
- One member who represents non-unionized employees
... are present.
The members who represent employees have one vote and the members who represent the employer have one vote. This means that all of the employee representatives and that all of the employer representatives should aim to collectively agree on their vote before it is cast. If the employee group cannot collectively agree on their vote, they lose their right to vote. In this case, the vote of the employer group prevails.
For more detailed information, you can refer to the Pay Equity Factsheet: Promising Practices for Creating and Working in a Pay Equity Committee
What if you cannot meet some committee requirements?
Employers must make all reasonable efforts to establish a pay equity committee. The expression “all reasonable efforts” is defined in more detail in the Interpretation, Policy and Guideline #3 on pay equity committees.
If, despite making all reasonable efforts, employers…
- Cannot establish a pay equity committee to create or update the pay equity plan
- Cannot establish or continue a pay equity committee that meets the composition requirements
- Are of the opinion that the pay equity committee cannot perform its work
... they can file an application with the Pay Equity Commissioner to obtain an authorization to follow different requirements.
Gather the data required to develop a pay equity plan
Federally regulated workplaces should update or collect the data that will be necessary to develop a pay equity plan, including:
- List of job positions and dates when these positions were first created or used in organization;
- List of employees holding each position both currently and, if available, in the past (e.g. 5 years);
- Self-identified gender, including non-binary, of employees;
- Job descriptions;
- Standard hours of work for each position (if not available, track actual hours of work to ensure that hourly rates of pay can be easily determined);
- List of compensation elements provided to each position, which can include hourly pay, salary, commission, pay per kilometer, pay per piece, benefits plans, vacation pay and allowances granted when on call (see Diagram 1: Total Compensation Model); and
- Salary range for each position (if available).
Collect compensation information
For some employers, there may be some work to do in compensation systems, for example to combine all elements of pay within a single database.
Compensation: refers to all payments and benefits, (directly or indirectly paid) provided to a person who performs functions for the organization. The Pay Equity Act provides a definition under subsection 3(1).
Compensation plan: refers to the way organizations pay their employees for the work that they do. This can include direct payments (e.g. salary), indirect payments (e.g. contributions to a pension plan) and benefits (e.g. medical plan).
Workplaces would benefit from having a clear compensation plan/pay policy in writing. (see Total Compensation Model below)
Total Compensation Model
|Base Compensation||Benefits||Paid Time Off||Performance Pay||Indirect Pay|
KM rate based pay
Health and Dental Plans
Health Savings Accounts
Income Protection Short Term Disability/Long Term Disability/Life
Pension or RRSP plans
Vacation, sick, personal, management leave (as examples)
Individual bonus plans
Profit or gain sharing
Mid- or long-term incentive plans
Payments in kind
Interest free loans
Personal cellular/computer allowances
Social or recreational memberships
Professional memberships (when not a condition of employment)
Parking & car allowances
Group of employers
What is a group of employers?
A group of employers is two or more employers who are recognized by the Pay Equity Commissioner as a single employer. Employers that are part of a group work together on their pay equity plan.
Employer A and Employer B are small firms with less than 100 employees in the grain handling industry. Employer A and Employer B have similar compensation practices and positions with similar duties and responsibilities.
They decide to file a group of employers’ applications to the Pay Equity Commissioner to be recognized as a single employer.
How is a group of employers formed?
Should two or more employers wish to form a group, they must apply to the Pay Equity Commissioner to have the group of employers recognized as a single employer.
Only federally regulated private sector employers who are covered by the Pay Equity Act can apply.
When reviewing an application, the Pay Equity Commissioner may recognize the group as a single employer if they are of the opinion that all of the following criteria are met:
- The employers are part of the same industry;
- They have similar compensation practices; and,
- They have positions with similar duties and responsibilities.
As an employer in a group of employers, how will my timelines differ?
If the application is approved, a group of employers will have some timelines that differ from an employer that is not part of a group of employers.
If the Pay Equity Commissioner recognizes a group of employers as a single employer, they become subject to the Act on a date chosen by the Commissioner.
This means that timelines concerning the posting of the final version of the pay equity plan, the increases in compensation, pay equity maintenance and the filing of the group of employers’ annual statement will be calculated from the date chosen by the Commissioner.
How will the process unfold for groups of employers?
Once a group of employers is recognized by the Pay Equity Commissioner...
- Employers in the group have a collective responsibility to establish and maintain a pay equity plan for all employees of employers in the group;
- Employers in the group are individually responsible for posting the draft and final versions of the pay equity plan in their workplace. They must do so on the same day.
- Employers are individually responsible for posting any notices required by the Pay Equity Act.
- Employers are individually responsible for implementing any increases in compensation owed to their employees.
Which groups of employers must establish a pay equity committee?
The following groups of employers must collectively establish a pay equity committee:
- Those who have collectively 100 or more employees
- Those who have collectively between 10 to 99 employees, some or all of whom are unionized
An employer with 10 to 99 non-unionized employees is not required to establish a pay equity committee but may decide to do so.
When it comes to setting up the pay equity committee, the same provisions apply to all employers, whether they form a group or not. For example, the committee must have at least one employer representative from the group of employers. If all the employers in the group want to select a representative, it is possible to do so, as long as two thirds of the total number of members represent the employees.
Multiple Pay Equity Plans
What are multiple pay equity plans?
As a rule, employers must establish a single pay equity plan for all of their employees, no matter the branch, division or region in which they may work. This means that employers must have:
- A single pay equity committee; and,
- A single method to value the work across all job classes.
Establishing multiple pay equity plans is an exception to the rule. It also means that a pay equity committee must be constituted for each of the pay equity plans.
The Pay Equity Commissioner will only approve applications where a party or the parties can establish through evidence that it is appropriate under the circumstances and consistent with the purpose of the Act; which is to redress gender-based discrimination in the pay practices and systems of employers.
Some employers may have already gone through a pay equity exercise to ensure compliance with section 11 of the Canadian Human Rights Act (CHRA). There are some important differences between the CHRA and the Pay Equity Act, and there is no exemption in the Pay Equity Act for employers who may have already completed pay equity analyses under the CHRA.
In addition, it is essential that enough predominantly male job classes be identified for each pay equity plan. This criterion must be met to ensure a comprehensive and robust comparison of compensation across job classes.
Before you make an application for multiple pay equity plans, please read the Interpretation, Policy and Guideline: Application for multiple pay equity plans to obtain more information about the persons entitled to apply, the factors considered by the Pay Equity Commissioner and the timeline to make an application.
If you wish to file an application, visit the How We Help section to learn about the process to make an authorization request and access the Request for Information form.
For more detailed information, you can refer to the Interpretations, Policies and Guidelines on Multiple Plans.
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