Clock is ticking on compliance with Canada’s new Pay Equity Act

Retired pay-equity specialist, Tom Baker, who negotiated the pay equity compensation systems for Canada’s largest city and Bruce County Public Libraries, is familiar with the proactive legislative framework on which the new Pay Equity Act law is founded.

Equal Pay Day is April 12th (the last extra day the Equal Pay Coalition says women work to make as much as an average man the previous year). There is good news.

The federal government says they are directing more than $2.3 billion over 10 years to stop pay discrimination based on gender, including private federal industries like finance and transportation.

Bruce County has been an advocate for equal rights since we elected Agnes Macphail who was Canada’s first female Member of Parliament. The Pay Equity Act notices for 1.3 million federal employees last November would no doubt please the author of Ontario’s first equal pay legislation in 1951.

More than 700 joint employer-employee pay-equity committees are currently identifying pay gaps for female jobs at their workplaces. Roughly 80,000 employees – one third in Ontario – will earn a pay bump of roughly $4,000.00 paid out by September, 2024.

The government’s own cost-benefit analysis suggests business may square this costing difference because not every affected employee works in a pink collar job ghetto. Moreover not all female job incumbents will see a raise.

“Bell Canada, Post Canada and the big 5 Canadian banks (RBC, TD, ScotiaBank, BMO, CIBC) jointly employ 1/3 of the total F(ederal)J(ursidiction) workers,” note government cost-benefit analysts Craig Eschuk, Leonid Shafir and Zohra Ferdousy. “Consequently, any pay equity measures undertaken by these companies may have a considerable impact on the payouts stemming from this Act.”

With the pandemic causing economic hardship a new pay equity law represents financial relief for 285,000 mostly non-union women struggling with reduced labour participation and employment in the federally regulated private sector (FRPS). By outlawing practices that misclassify female employees, the Pay Equity Act will close pay gaps that see full-time female employees paid on average $.89 hourly for every dollar their male co-workers make.

Fines up to $50,000 for violators give the Pay Equity Act teeth. Compliance audits may also be ordered by Pay Equity Commissioner Ms. Karen Jensen.

The Pay Equity Act is a great improvement on the old complaint-based federal system. A reduction in useless litigation will mean cost-savings of $30 million according to the government.

The use of comparators outside the individual workplace is an important reform too. Pink collar ghettoes often lack direct male job comparators inside their establishment.

It is important to consider the demonstration effect of federal pay equity as well. Four provinces still do not have a specific pay equity law. Perhaps 2022 will represent a turning point for fair pay.

Canada deserves credit for advancing equality at work with the new Pay Equity Act. Something to celebrate for Equal Pay Day.

Baker’s work has appeared in the New York TimesGlobe and Mail and the Hamilton Spectator.