Equal Pay Day: Unpacking Canada’s Legal Fight for Pay Equity
September 18 is International Equal Pay Day. Despite social and legislative efforts aimed at increasing fairness and equality, pay inequity and discrimination based on sex remain pervasive issues in the Canadian labour market. There exists a gender pay gap in all industries even though women consistently outnumber men in post-secondary graduation rates. In 2024, Canada ranked 36 out of 146 global economies for wage equality (down from 30 in 2023) in the Global Gender Gap Report.[1]
What is the current legal framework governing pay equity in Canada?
Federal Pay Equity Legislation
The Pay Equity Act came into force in 2021. This piece of legislation was created in recognition that women, as well as other designated groups, have historically been disadvantaged in the workplace including in terms of pay. The main purpose of the act is to address “discrimination in the compensation practices and systems of employers”.[2] The Pay Equity Act applies to federally regulated employers with more than 10 employees and it requires these employers to establish and update a pay equity plan focused on ensuring they are paying their workers equally for work of equal value, regardless of gender.
Provincial Pay Equity Legislation
The Ontario Employment Standards Act, 2000 (the “ESA”) requires Ontario employers to pay employees “equal pay for equal work”.[3] Employers must pay the same wage for work that is substantially the same, in the same establishment, and under the same working conditions. There are, of course, certain exceptions to this requirement.
Additional proposed changes to the ESA will require employers to include expected salary ranges in job postings. This is an initiative aimed at narrowing the gender pay gap through increased transparency about salaries. This new obligation will have the added benefit of helping job applicants and employers to be more efficient in their job and candidate search.
Impact on Employers
In addition to a social responsibility, employers have a legal responsibility to ensure that their employees are paid equally for equal value work regardless of their gender. But aside from the avoidance of legal recourse, there are other compelling reasons to ensure pay equity in the workplace. Research on the topic of gender equity shows that companies with greater gender diversity perform better and achieve greater economic returns.[4]
Conclusion
Canada recognizes that women have historically faced and continue to face discrimination based on sex in the workplace, and has put in place ameliorative legislation to help address this inequity. Furthermore, Canada has federal and provincial human rights legislation that prohibits discrimination based on sex. If you think you may be discriminated against in your workplace due to your sex, you can reach out to an experienced employment lawyer to help you assess the situation and explain what recourse may be available to you, contact us for further information online or by phone at (416) 640 2667.
[1] Global Gender Gap Report 2024, (Switzerland: Word Economic Forum, 2024).
[2] Pay Equity Act, SC 2018, c. 27 s 2.
[3] Employment Standards Act, 2000, S.O. c. 41 s. 42(1).
[4] Pay Equity Act Legislative Guide (Canada, Canadian Human Rights Commission, 2021) p. 7.
Author – Marilou Lopes