Complying with Canadian pay equity reporting
In Canada, gender pay gap reporting is governed at both a federal and provincial level. Introduced by the Canadian federal government in 2018, the Pay Equity Act aims to address gender-based wage disparities in federally regulated sectors and requires employers to periodically evaluate if jobs commonly held by women are paid equally for work of equal value.
The legislation came into effect in January 2021 and mandates that employers actively scrutinize their pay practices, ensuring that men and women who perform work of equal value receive comparable compensation. As a high-level timeline, employers need to:
Within 60 days of becoming subject to the Act, post a notice to inform employees about the pay equity plan and any obligations.
Post the final pay equity plan no later than a year after the third anniversary of the date on which the organization became subject to the Act.
The first batch of employers who became eligible in 2021are required to submit the first annual report to the Pay Equity Commissioner by June 30, 2025.
Collect workplace data at the end of each fiscal year and publish the revised pay equity plan by September 4, 2029.
In this article, we will break down the Canada Federal Pay Equity Act and help you to answer four questions:
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In addition to the federal government, six Canadian provinces have established distinct pay equity regulations. The same structure is applied to these regulations subsequently, which you can find in the Conclusion and next steps section below.
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Please keep in mind that the articles in the PayAnalytics Help Center do not offer legal advice.
1. Who does it apply to?
The requirements apply to all federally regulated employers that have 10 or more employees. This includes:
Federally regulated private and public sectors;
Parliamentary workplaces;
The Prime Minister’s and ministers’ offices.
Federally regulated industries, also known as federal jurisdictions, are industries that fall under the authority of the Canadian federal government rather than the provincial or territorial governments. Here are some of the main federally regulated private industries:
Air Transportation,
Banks,
Most Federal Crown Corporations,
Shipping and Navigation Services,
Road Transportation Services,
Telecommunications,
Works Declared for the General Advantage of Canada,
Auxiliary Businesses (to those industries listed above).
Note that, once subject to the act, an employer remains subject to the Act even if the average number of employees declines to less than 10 in later years. The employee count is based on the average number of employees in a given year.
2. What is the requirement?
Employers are required to form a Pay Equity Committee (if they have more than 100 employees, or 10 to 99 and any unionized workers), who are to create and deliver a Pay Equity Plan, which must be published somewhere visible to all employees and updated regularly.
To prepare for the Pay Equity Plan, employers must:
Identify job classes - positions with similar duties, responsibilities, and qualifications that form a job class.
Identify gender predominance - for each job class, the employer needs to determine if it is predominantly male or female (if >60% or more held by that gender).
Evaluate job classes - determine the value of job classes based on valid factors, such as skill, effort, and responsibility.
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Calculate adjusted job role pay - should not include any pay differences from the objective factors such as:
Seniority-based pay systems,
Temporarily maintaining pay after a downgrade to a lower-paid role,
Raising pay briefly due to skill shortages,
Employee's work location,
Different pay for trainees versus regular staff,
Lack of certain benefits for temporary jobs,
Performance-based pay, known to all employees,
Extra pay for tasks like overtime or working on days off.
Calculate job class compensation - expressed in Canadian dollars per hour.
Compare compensation - between predominantly male and predominantly female job classes of similar value to identify any discrepancies in pay.
Identify increases - specify the adjustments required to ensure that female job classes are compensated at least as well as male job classes of similar value.
Timeline for adjustments - provide details about when pay adjustments will be made.
3. How does PayAnalytics help you to meet the requirement?
Once you have identified your job classes, the PayAnalytics system helps to run the analysis you need to report, including:
Job Evaluation enables users to implement frameworks that objectively compare jobs based on standard, consistent criteria. Job evaluation is a feature to support equal pay for work of equal value. It allows PayAnalytics users to create Job evaluation schemes and assign values to jobs. These job evaluations can then be used with datasets and analysis. Within PayAnalytics, you can create and view existing Job evaluations within the Admin section of the navigation.
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Learn more about using the Job evaluation feature.
Value-based Comparison provides powerful insights based on a core principle within pay equity: “Equal pay for work of similar or equal value”. Once you've completed and imported the results of a job evaluation, the Value-based Comparison feature allows you to dive deeper into the data to reveal any inequities, verify compliance, and plan for adjustments if needed. Within PayAnalytics, you can create and view this report in our Value-based Comparison feature, available within the Report section of the navigation.
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Learn more about using the Value-based comparison feature.
You can see the location of these features in the PayAnalytics application in the following picture:
Navigation menu to explore Job Evaluation and Value-based Comparison features
Preparing your dataset
Note that a dataset containing at least the following data needs to be imported prior to generating the report:
Unique employee ID (mandatory for all datasets).
Gender, defined as being binary, so either male or female.
Job class that is associated with each employee’s role, as defined based on similar duties, responsibilities, and qualifications.
Value points for each job category, which is the output from your Job evaluation, and is either included in the dataset directly or added in the dataset configuration step.
Compensation which is defined as hourly salary excluding performance-based pay, overtime pay, seniority-based pay, location-driven pay adjustments, any temporary pay circumstances etc. (requirement 4 above).
Configuring your dataset
When configuring your dataset within PayAnalytics, make sure to go through the following additional steps which are specific to Canadian regulation:
Within the Compensation section, select Use additional compensation settings, as illustrated in the following picture:
Dataset configuration to Use additional compensation settings
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Within Job class compensation (Canada), select Calculate job class compensation to use in Canadian pay equity analysis.
Select which of your dataset columns indicates your job class.
Select which of your dataset columns indicates your salary.
The data set configuration is shown in the following picture:
Dataset configuration to calculate Job class compensation (Canada)
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In case you have used PayAnalytics to conduct your Job evaluation and have not included the value points in your dataset directly, configure the Job evaluation (optional):
Select the relevant Job evaluation from the drop-down list.
Select the column that matches the job in job evaluation, this should be your job class.
These configuration option are illustrated in the following picture:
Dataset configuration to merge value points from a Job evaluation
Generating the report:
You can create a Federal Canada report with just a few clicks:
From your navigation head to Reports section, click on the menu item Value-based Comparison.
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Within Page settings, configure Value point mapping (if not done automatically) by:
Selecting the column that represents your job class.
Select the column that represents the value points for your job class.
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Select your Configuration Preset related to your relevant regulation, in this case, Federal Canada, and note that Quebec and Ontario are also options here. This will automatically configure the appropriate settings to fulfill the requirements:
Set the gender threshold to 60%.
Set the display settings to Comparison and Job class compensation.
Set the method to Equal line or equal average (automatic).
The Configuration Preset is illustrated in the following picture:
Value-based comparison Federal Canada configuration settings
Click Save to confirm the configuration settings and view the results.
This report is easily exported to both a Word document or a print page in PDF from the right top corner, as shown in the following illustration:
Value-based comparison Federal Canada results view and export
Interpreting the report
Now that you have explored how to generate and export your report, let’s go through the report sections to discover how they help you to meet the requirements to prepare the Pay Equity Plan that were described in What is the requirement section.
1. Group Overview
The graph displays each job class as a sphere, male predominant job classes are blue and female predominant job classes are red. The size of the sphere indicates the number of employees within that job class. The horizontal axis displays the value points associated with the job class, while the vertical axis represents the associated median compensation, as illustrated in the following picture:
Group overview to identify gender predominance
This section helps you to meet requirement 2 from the requirement list. When gendered jobs of equal value receive equal pay, the job classes that are similar in value points, would be expected to have a similar compensation. If this is not the case, remediation may be required.
2. Equal average compensation
The graph displays each job class within its value point range, again with male predominant job classes in blue and female predominant job classes in red, as illustrated in the following picture:
Equal average comparison to compare compensation
3. Job class compensation
The table displays the hourly compensation for each job class by compensation element, as shown in the following picture:
Job class compensation results
4. Employee increases
The employee table list within the Equal average comparison section, includes a column Suggested increase, as illustrated in the following picture:
Equal average comparison results include Employee increases table
This table informs about remediation action to help meet requirement 7 from the list shown in the What is the requirement section.
Next discover what to do with the report and how to take your pay equity further.
4. Which steps should we take next?
As the report section above demonstrates, the export enables you to meet requirements 1 through 7. The only remaining action (requirement 8) is planning the remediation, meaning the implementation timeline for increases within underpaid job classes. This exercise needs to be conducted outside of the system by your team.
Once completed, the pay equity plan must be:
Posted in a place where all employees can see it, ensuring transparency and giving employees the opportunity to provide feedback.
Reviewed and updated at specified intervals, ensuring they remain compliant over time.
As part of the Pay Equity Act's provisions, the Pay Equity Commissioner is responsible for overseeing and enforcing:
the adherence to the Act's provisions.
the monetary penalties, ranging from $30,000 to $50,000, are given to the noncompliance.
the facilitation of mediation to resolve any disputes.
Following due process, demonstrating that each of the requirements is met, and adhering to the reporting timelines are important to adhere to compliance, avoid penalties, and build trust with your employees.
Conclusion and next steps
If you would like further support around Canada Reporting, please don't hesitate to reach out for assistance through the Help Center support channel or reach out to our pay equity consultants at clientservicespe@beqom.com.