Understanding pay equity
Pay equity is internationally recognized as a fundamental human right.
Pay equity is about "equal pay for work of equal value".
This means that if two different jobs contribute equal value to an employer’s operations, then the employees in those jobs should receive equal pay.
The idea of "equal pay for work of equal value" is similar to the idea of comparing apples to oranges – although they are different, they are equally nutritious.
Example: If you compare the value of a truck mechanic job class (commonly held by men) to that of an account technician job class (commonly held by women), both jobs are different, but are of equal value to the company – therefore they should be compensated equally.
Similarly, within a factory, an administrative assistant job (typically a female job) may hold the same value as a machinist job (typically a male job). In this case, the compensation offered should be the same for both jobs.
Importance of pay equity
Pay equity is important because it addresses the undervaluation of women’s work, which contributes to the gender wage gap.
Jobs that are commonly held by women tend to be paid less than jobs commonly held by men – even when the work is comparable in value based on skill, effort, responsibility and working conditions.
The gender wage gap is a persistent problem: In 2020, a woman in Canada earned 0.89 cents for every dollar a man earned. That is equivalent to a $3.52 hourly wage rate gap (or 11%) between men and women.
Federal pay equity legislation
The Pay Equity Act was passed by Parliament and received Royal Assent on December 13, 2018, and came into force on August 31, 2021.
The purpose of the Act is to achieve pay equity for employees in jobs that are commonly held by women by addressing gender-based discrimination in the pay practices and systems of employers.
Difference between the federal Pay Equity Act and section 11 of the Canadian Human Rights Act
The federal Pay Equity Act is proactive.
Proactive pay equity legislation puts the onus on employers to assess, at set points in time, whether employees in jobs commonly held by women are earning equal pay for work of equal value in their workplace.
Section 11 of the Canadian Human Rights Act is complaint-based. This means that the onus is on individuals filing a complaint.
Some employers may have already gone through a pay equity exercise to ensure compliance with section 11 of the Canadian Human Rights Act (CHRA). However, 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.