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What’s the Pay Equity Act?

By September 16, 2020Employers

If you’re an employer in Ontario with 10+ employees, the Pay Equity Act is something every business owner needs to know. Without, your business is open to the possibility of discrimination litigation/fines; a lengthy, costly experience at most.

In accordance with the Ontario Pay Equity Act, RSO 1990, c P7 (“PEA”), employers with over ten employees must achieve and maintain pay equity.

Pay equity is not about equal pay for equal work in the sense of a woman and a man being paid the same wage for the same job. Rather, it focuses on whether traditionally female jobs are being paid the same as traditionally male jobs of equal value. To achieve pay equity the employer goes through a simple 4-step process:

  1. Employers must identify the job classes within the business, including the gender and job rate of each class.
  2. Employers must give a value of each job class based on skill, effort, responsibility and working conditions.
  3. Employers must compare all female job classes by using the prescribed methodology of compensation.
  4. If female job classes are underpaid, their wages must be adjusted to eliminate that gap.

As jobs are added or eliminated, employers must maintain pay equity.

Penalties for failure to comply, include back payments and fines. Achieving pay equity compliance is fairly straightforward and as such, best done once having 10 employees on staff. Letting it get away from you not only leads to the possibility of fines but an overall headache and difficulty all around.

Call or email us to help you stay in compliance with a pay equity audit.


Jess Watt

Author Jess Watt

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