Gender equity in the workplace has become a global topic of interest. Movements such as "Time's Up" have shined the light on pay inequality in Hollywood and Iceland recently became the first country to mandate "equal pay certification" for both private and public firms.

The Ontario provincial government and the Canadian federal government are no strangers to gender equity initiatives. This updates focuses on two current legislative efforts: Ontario's recently tabled legislation on pay transparency, and the federal government's push to introduce pay equity legislation for federally regulated employers.

Ontario's Pay Transparency Legislation

On March 6, 2018, the Ontario government tabled proposed pay transparency legislation as a part its Strategy for Women's Economic Empowerment. Bill 203, Pay Transparency Act, 2018, goes a step further than previous equal pay or pay equity legislation by requiring employers to take certain steps to implement pay transparency in the workplace.

If passed, Bill 203 would, among other things:

  • require job postings to include information about the expected compensation for the position;
  • prohibit employers from asking for information about an applicant's compensation history; and
  • require prescribed employers to prepare a transparency report containing information relating to the employer including the composition of the employer's workforce and the differences in compensation in the employer's workforce with respect to gender. Employers would also have to submit this report to the Ministry of Labour and post it online or in a conspicuous location in the workplace.

The legislation also prohibits employers from disciplining or penalizing an employee for making inquiries about compensation or the employer's pay transparency report, disclosing their compensation to another employee, asking the employer to comply with this legislation, or disclosing information to the Ministry of Labour about compliance or non-compliance with the legislation.

The Ministry of Labour will be able to conduct spot checks and enter workplaces to investigate possible contraventions of the legislation. If an employer is in contravention of the legislation, the Ministry of Labour can issue a notice of contravention and impose a monetary penalty. The Ministry of Labour will also be able to publish information about the employer's contravention.

On March 15, 2018, in a surprise move, Ontario's Premier, Kathleen Wynne, prorogued the Ontario legislature effectively killing all bills on the order paper, including Bill 203. On March 20, 2018, however, the Ontario government reintroduced its pay transparency legislation in the form of Bill 3, Pay Transparency Act, 2018. If passed, Bill 3 will come into force on January 1, 2019.

At the federal level, while there is no impending pay transparency legislation, the federal government acknowledged in its budget for 2018 (the "Budget") that it will be looking to convert existing pay information filed by federally regulated employers under the Employment Equity Act into more user-friendly online content. The federal government has also committed to spending $3 million over the next five years to implement pay transparency.

Federal Pay Equity Legislation

For federally regulated employers, gender equity legislation was first introduced in 1977 with the enactment of the Canadian Human Rights Act. With this, it became a discriminatory practice for an employer to establish or maintain differences in wages between male and female employees employed in the same establishment who perform work of equal value.

The current federal pay equity framework consists of a complaint based system: an employer has an obligation to ensure its compensation practices are non-discriminatory, but it does not have an obligation to develop and publish pay equity plans.

In June 2016, the federal government's Special Committee on Pay Equity released its report entitled It's Time to Act. Among the recommendations made by the Special Committee was that the federal government, within 18 months, draft proactive pay equity legislation similar to the legislation found in Quebec and Ontario.

Although proposed pay equity legislation has yet to be tabled, the federal government's Budget includes plans to reduce the gender wage gap. Proactive pay equity legislation is part of the plan. The Budget reports that the legislation will draw on the models set by Quebec and Ontario but will take an "innovative approach" to ensure equal pay for equal work.

This legislation would, among other things:

  • apply to federal employers with 10 or more employees, with pay equity requirements built as much as possible into existing federal compliance regimes;
  • 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; and
  • apply to the Federal Contractors Program on contracts equal to or greater than $1 million, and ensure a robust application of federal employment equity law.

The Government has indicated that it will consult with employers, unions and other stakeholders in the coming months to ensure that the new regime will be applied fairly and will achieve its intended purpose.