New pay transparency measures in federally regulated workplaces

New Delhi: In Budget 2018, the Government of Canada announced $3 million over five years, starting in 2018-2019, to address wage gaps in the federally regulated private sector through pay transparency measures. Further to this commitment and following consultations with stakeholders, the Government introduced an amendment to the Employment Equity Act (the Act) as part of An Act to Implement Certain Provisions of the Budget Tabled in Parliament on March 19, 2019 and Other Measures (Bill C-97), which received Royal Assent on June 21, 2019.

Regulatory amendments
To implement pay transparency, amendments to the Employment Equity Regulations (the Regulations) were necessary.

To direct the approach to the regulatory amendments, the Government held in-person regulatory consultations and made an online questionnaire available to employer representatives and stakeholder groups in winter 2019, including:

unions;
special interest groups;
industry associations;
representatives of provincial and municipal orders of government
This initial feedback informed the development of the proposed Regulations Amending the Employment Equity Regulations, which were published in Part I of the Canada Gazette on August 10, 2019. The comments received during the 30-day consultation period allowed the Government to make minor amendments and finalize the Regulations. Final Regulations Amending the Employment Equity Regulations are now available in Part II of the Canada Gazette.

Coming into force
The legislative amendment to the Act and the final Regulations will come into force on January 1, 2021, through an Order-in-Council.

Beginning January 1, 2021, federally regulated private sector employers covered by the Act will be required to record new salary data and to include aggregated wage gap information in their annual reporting on employment equity[1] by the following year on June 1, 2022.

Aggregated wage gap information will be published in the Employment Equity Act: Annual Report and through an online application (in development), which will provide comparable data on representation rates and designated group wage gaps by employer. The first release of wage gap information is expected in the fall of 2022/winter 2023.

In line with the Act, the new salary data will enable employers to determine their employees:

hourly rate wage gaps;
bonus pay gaps;
overtime pay gaps;
overtime hours worked gaps.
The Regulations also include a number of administrative amendments to modernize and streamline the Regulations as well as update references to other legislation.

Employers are encouraged to reach out to the Labour Program at 1-800-641-4049 if they need assistance understanding the new reporting requirements.

Statistics on gender wage gap
In Canada
According to Statistics Canada, female employees aged 25 to 54 earned 88 cents on the dollar compared to men in terms of their average hourly wage in 2019, representing a wage gap of 12.1%.

In federally regulated private sector workplaces
According to the Employment Equity Act: Annual Report 2019, employees in permanent full‑time positions earned:

Less than $50,000
a) 30.7% of women compared to 20.6% of men
b) 36.5% of Aboriginal women compared to 22.5% of Aboriginal men
c) 32.1% of women with disabilities compared to 22.2% of men with disabilities
d) 31.9% of visible minority women compared to 24.0% of visible minority men

$60,000 or more
a) 50.1% of women compared to 64.4% of men
b) 42.9% of Aboriginal women compared to 62.5% of Aboriginal men
c) 48.1% of women with disabilities compared to 61.6% of men with disabilities
d) 49.8% of visible minority women compared to 60.4% of visible minority men

$100,000 or more
a) 15.5% of women compared to 24.2% of men
b) 10.2% of Aboriginal women compared to 20.5% of Aboriginal men
c) 13.4% of women with disabilities compared to 21.4% of men with disabilities
d) 15.1% of visible minority women compared to 21.4% of visible minority men

[1] Each year, employers are required to file an employment equity report with the Minister of Labour as required by the Act. The report includes six forms: representation data, employee occupational groups, employee salary ranges, and the number of employees hired, promoted and terminated, as well as a narrative.

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