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Pay Equity Act ushers in attitude change at federal workplaces

Aug. 31 implementation gives federal workplaces three years to close gender wage gaps. Will private sector follow suit?


Canada's Pay Equity Act came into effect Aug. 31, 2021. (apixel/Getty Images)

Since the late 1990s, Ontario and Quebec’s equal pay legislation has aimed to set a precedent of diversity and inclusion in the workplace that has only become more valued and relevant in recent years.

Effective today, the standard set by these policies moves beyond the provincial level with the implementation of the Pay Equity Act for all federal workplaces.

Canada’s Pay Equity Act aims to achieve salary parity amongst men and women, seeking to attain this goal through an initiative that gives employers three years to develop and enforce a set of rules and requirements in identifying and correcting gender discrimination regarding compensation for roles of similar job classes.

A simple policy with necessary effects

“More so than many other statutes, the Pay Equity Act is quite narrow and specific in its main objective — to close the gender wage gap and ensure that workers receive equal pay for work of equal value,” according to Dasha Peregoudova, a labour and employment lawyer and associate at Aird & Berlis in Toronto.

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The relatively straightforward aim of the Pay Equity Act does not make its implementation any less necessary or important, she said, highlighting that, “practically speaking, the biggest impact should be on women who, according to the most recent data, still earn 89 cents of every dollar a man earns in a role of similar value.”

Despite federal work environments being the focus of the Pay Equity Act, Peregoudova sees the act’s implementation as a potential catalyst in moving provincial governments to introduce similar legislation that extends to the private sector as well.

If introduced, Peregoudova believes that while provincially-mandated pay equity in the private sector may likely still revolve around current, complaints-based protocols, the presence of legislation still places “obligations on employers (that) will no doubt result in more proactive compliance through self-assessment and expert consultation.”

Changing attitudes around compensation

The Pay Equity Act’s influence beyond the public sector may also be noticeable in setting compensation standards for workplaces across the country, said Cynthia MacFarlane, a principal at Mercer Canada in Ottawa, and one of the heads of the organization’s federal pay equity response team.

She believes that after being introduced in federal workplaces, pay equity “might become an attraction and retention type of tool, where the private sector might have to be able to demonstrate that, ‘Yes, we are also very aware of where our male and female employees fall and are protected under the Human Rights Act.’”

Pay equity law helping to close gender wage gap to come into effect Aug. 31

By taking cues from federal workplaces, MacFarlane said that employers in the private sector can communicate to both their employees and peers an attitude of recognition and proactivity when dealing with any pay gaps or systemic biases that may be embedded in the company’s culture.

“We could see that becoming something organizations are going to have to say; that they’ve done something to make sure that things are fair.”

Striving beyond compliance

Whether one’s workplace is directly affected by the measures of the Pay Equity Act, or if private sector employers are simply inspired to emphasize equal pay as a core company value, MacFarlane urges that the matter not simply be one of complying to a policy, but also of communicating the values driving those actions.

This means that in their approach, employers should go beyond just following the required rules; she said it is key for employers to broadcast and communicate across all levels of the company culture that being an equal pay workplace is something that they believe in and take seriously.

“That’s one ‘best practice’ we think is important,” said MacFarlane, “where you can take the spirit of all the communications that you have to give to the committee, and think about the real messaging that you want to spread to the entire employee population.”

Jack Burton is a freelance writer in Toronto.