The Government of Canada released its 2018 budget plan on February 27, 2018, entitled “Equality and Growth”. The budget plan proposes various initiatives aimed at improving women’s equality in the workforce and addressing the gender wage gap. The budget proposes to implement a new parental leave benefit that is likely to have an impact upon both provincially and federally regulated employers. The budget also proposes changes to the federal pay equity regime and online reporting of pay information filed under the Employment Equity Act.
Employers should anticipate that both parents are more likely to take parental leave, assuming amendments to the Employment Insurance Act follow from the budgetary proposal.
Pay equity laws require equal pay for work of equal value, assessed by reviewing the skill, effort, responsibility and working conditions of the jobs. Employers are required to pay female and male employees the same if they perform work of equal value in the same establishment, even if they do entirely different jobs. Federally regulated employers should anticipate that they will need to value every male and female job class in their establishment using a gender neutral comparison system and compare the wage rates of all equally valued male and female job classes to ensure that there are no pay inequities. Effectively, this requires a pay audit of all job classes.
New Parental Leave Benefit
The Government plans to add a further option to the EI program to incentivize parents to share parental leave by offering additional weeks of benefits. According to the budget plan, the proposed benefit would:
- Be available to eligible two-parent families, including adoptive and same-sex couples, to take at any point following the arrival of their child;
- Increase the duration of the EI parental leave by:
- up to five weeks where the family opts for the standard leave of 12 months (at 55 per cent of earnings for parental leave) and the second parent agrees to take a minimum of five weeks of the maximum combined 40 weeks available; and
- up to eight weeks where the family opts for the extended leave of 18 months (at 33 per cent of earnings for parental leave) and the second parent agrees to take the extended period of leave.
The Government also plans to provide job protection during the new EI parental leave through amendments to the Canada Labour Code.
Proactive Pay Equity Regime
Federally regulated employers are currently subject to pay equity requirements under the Canadian Human Rights Act. The existing pay equity system is a complaints-based model administered by the Canadian Human Rights Commission without a progress reporting requirement. The Government plans to introduce a new proactive pay equity regime in federally regulated sectors, affecting approximately 1.2 million employees. According to the budget plan, the new legislation will:
- Apply to federal employers with 10 or more employees;
- Build pay equity requirements into existing federal compliance regimes where possible;
- Establish a streamlined pay equity process for employers with fewer than 100 employees;
- Set out specific timelines for implementation, and compulsory maintenance reviews;
- Include job types such as seasonal, temporary, part-time and full-time positions;
- Provide independent oversight;
- Ensure that both wages and other benefits are evaluated in a gender-neutral way;
- Apply to the Federal Contractors Program on contracts equal to or greater than CAD 1 million; and
- Repeal previous legislation which is inconsistent with the goal of pay equity.
To inform Canadians about the pay practices of federally regulated employers, the Government plans to publish existing pay information filed by employers under the Employment Equity Act. The pay information will be made available in a user-friendly online format that identifies wage gaps. According to the budget plan, this approach will help draw attention to employers who lead in equitable pay practices, while holding employers accountable for wage gaps that affect women, Indigenous Peoples, persons with disabilities and visible minorities.
We will continue to monitor the progress of these proposals.