Effective April 1, 2018, the equal pay amendments to the Employment Standards Act (“ESA“) flowing from the Bill 148 Fair Workplaces, Better Jobs Act officially came into force in Ontario.
These equal pay provisions prohibit any employer paying different rates of pay to employees because of a difference in employment status (eg. full-time, part-time and/or casual employee status) when:
- they perform substantially the same kind of work in the same establishment;
- their performance requires substantially the same skill, effort and responsibility; and
- their work is performed under similar working conditions.
The amendments also prohibit temporary help agencies from paying an assignment employee a rate of pay less than the rate paid to an employee of the client in similar circumstances.
When complying with these equal pay obligations, it is important to note that an employer is not permitted to reduce the rate of pay of an employee in order to comply with its equal pay obligations or the equal pay obligations of a temporary agency. It is also important to note that the equal pay obligations now required by the ESA do not apply if the difference in pay is made on the basis of:
- a seniority system;
- a merit system;
- a system that measures earnings by quantity or quality of production; or
- any other factor other than sex or employment status.
If, however, a collective agreement is in effect on April 1, 2018 and that collective agreement contemplates differences in pay based on employment status, the collective agreement prevails until that collective agreement expires or January 1, 2020, whichever is earlier.
Employers must be mindful of these new equal pay obligations and ensure compliance in order to avoid the prospect of being ordered to pay back wages and/or face fines imposed by the Ministry of Labour for non-compliance.