Who is counted as an employee
To learn about who is considered an employee for the purpose of pay equity, please refer to How the Pay Equity Act defines employee section or read our guidance on the definition of employee (397 KB).
Timeframes for your employee count
An employee count is done on the basis of the average number of employees working for an employer in a given year – the “reference year”. The employee count determines whether and when an employer is subject to the requirements of the Act.
In conducting an employee count, the Act distinguishes between a fiscal year and calendar year.
Public sector employers – Fiscal year
Public-sector employers must count the average number of their employees in the previous fiscal year – April 1 to March 31. If the average number of employees in a given fiscal year increases to 10 or more, the employer will become subject to the Act on April 1 of the next fiscal year.
April 1st, 2020
- Reference Year 1 - Employer X counts an average of 8 employees employed between April 1, 2020, and March 31, 2021.
- Employer X is not subject to the Act coming into force.
April 1st, 2021
- Reference Year 2 - Employer X counts an average of 14 employees employed between April 1, 2021, and March 31, 2022
- Employer X is subject to the Act as of April 1st, 2022.
August 31, 2021
- Act came into force
Private-sector employers – Calendar year
Private-sector employers must count the average number of their employees in the previous calendar year – January 1 to December 31. If the average number of employees in a given calendar year increases to 10 or more, the employer will become subject to the Act on January 1 of the next calendar year.
January 1st, 2020
- Reference Year 1 - Employer X counts an average of 8 employees employed between January 1, 2020, and December 31, 2020.
- Employer X is not subject to the Act coming into force.
January 1st, 2021
- Reference Year 2 - Employer X counts an average of 14 employees employed between January 1, 2021, and December 31, 2021
- Employer X is subject to the Act as of January 1st, 2022.
August 31, 2021
- Act came into force
Calculating your employee count
Simple method for calculating the number of employees from payroll records
- Review payroll records to determine the number of employees paid during each pay period (usually 26 per year).
- Adjust the number of employees over the 26 pay periods based on the definition of employee under the Act:
- Remove employees whose employment relationships are excluded under the Act (students working through a student employment program, etc.).
- Include employees who may be considered to be dependent contractors under the Act.
- Calculate the average number of employees for the year by:
- Adding up the adjusted number of employees for each of the 26 pay periods.
- Dividing the total adjusted number of employees by 26.
| Pay period | Total employes on payrol | Adjusted number of employees on payroll per Pay Equity Act |
|---|---|---|
| 1 | 85 | 83 |
| 2 | 87 | 84 |
| 3 | 87 | 84 |
| 4 | 106 | 100 |
| 5 to 25 | Calculate the number of employees recorded for each pay period | Calculate the adjusted number of employees recorded for pay period |
| 26 | 117 | 103 |
| Total | 2,735 | 2,706 |
| Average by pay period = | Sum of number of employees on payroll divided by 26 = 105 | Sum of number of adjusted employees on payroll divided by 26 = 104 |
Updating your employee count
Employers subject to the Act must update the employee count as part of the requirement to review and update their pay equity plan.
Should employers learn that the average number of employees they have has declined to less than 10 while updating the employee count, they are still subject to the Act and still have to update their pay equity plan. Once an employer becomes subject to the Act, they remain subject to the Act.
Employee counts if you belong to a group of employers
A group of employers must determine the sum of all the employees employed by all the employers that are a part of the group. This sum, and the presence of unionized employees, is what the group of employers will use to determine if they must establish a pay equity committee to develop their pay equity plan.
| Employer | Number of non-unionized employees | Number of unionized employees | Total of non-unionized employees and Unionized employees |
|---|---|---|---|
| A | 50 | 44 | 94 |
| B | 13 | 37 | 63 |
| C | 27 | 9 | 36 |
| D | 12 | 76 | 88 |
| Total | 102 | 166 | 281 |
Inclusion of employees on leave
An employer's total employee count must include any employee on parental leave or on leave without pay. The term “employee” includes everyone who is employed by an employer, with a few exceptions such as students that are part of a student employment program or those that are employed solely during their vacation period.