Canada: a leader in equal pay laws
Regulatory update 2 minute read

Canada: a leader in equal pay laws

28 November 2018

Canada is setting the tone for the country and the world by proposing a new legislation related to pay equality in the workplace.

The federal government has recently introduced legislation that will require all federally regulated employers with ten or more workers to ensure that women and men receive equal pay for work of equal value. 

While this may sound ground-breaking, Canada is known for a strong human rights culture that is backed by various levels of government and the judiciary. In fact, many of the provinces in Canada have had some level of pay equity legislation in place for decades. However, the proposed legislation by the federal government seeks to set a consistent standard surrounding pay equity in the workplace in Canada. 

To give the legislation extra strength for enforcement, the government is appointing a dedicated pay equity commissioner to the Canadian Human Rights Commission. This person will work to educate employers about the new laws and help to enforce them. 

What will change

Businesses which are federally regulated will need to ensure they are compliant with this law. They will have to examine workplace pay structures, job titles and job bands to ensure equity across all levels. Employers will have to have clear definitions of roles and responsibilities to ensure that women and men are paid equally for the same jobs.  While businesses will have to make a financial commitment for this change, the overall goal is to improve and enhance the workforce. 

In Canada, there has been a big emphasis on encouraging women to enter non-traditional sectors like STEM, IT and engineering. Pay gaps and demographic gaps currently exist in these sectors and it is hoped that this legislation and the spirit behind it will help narrow the gaps and further encourage young women to pursue careers in this space.

If passed, the legislation could become law within a year. Once passed, it will give businesses that will be affected by the legislation, three years to come in line and comply with the new pay equity expectations.  As foreign businesses look to expand within Canada, this is another aspect of their hiring and compensation practices that they need to consider and incorporate into their HR policies. 

Penalties for non-compliance

While there are no financial penalties written into the legislation for non-compliance, protected individuals under this legislation could bring complaints regarding unequal pay to the Human Rights Commission. There will a path for escalation to ensure that any deviations from the policies are addressed. 

In Canada, the creation of a diverse and equitable work environment for all is seen as good for business and is viewed as factor to attract international investment and talent to the country.

Getting help 

Navigating these employment compliance requirements after the law passes may be complicated for businesses. It is important to be aware of pay equity requirements on both the provincial and federal levels. TMF Canada has the local experts to help with building pay equity programs for business and can help with employment letters and background checks, as well as a full range of HR services. We can help,  talk to us today.

Learn more about TMF Group in Canada.

Written by

Lisa Wilcox

Market Leader, North America

Insights and updates delivered to your inbox.

Sign up now