Employers with 10 or more employees in Ontario are required to preserve pay equity in accordance with the Ontario Pay Equity Act, RSO 1990, c P7 (“PEA”).
Under Ontario’s laws, “pay equity” is different from “equal pay for equal work”.
Under Ontario’s Employment Standards Act, 2000 (ESA), subject to certain exceptions, an employer cannot pay one employee at a rate of pay less than another employee on the basis of sex when they perform substantially the same kind of work in the same establishment, their work requires substantially the same skill, effort and responsibility and their work is performed under similar working conditions.
Under Ontario’s Pay Equity Act, “pay equity” requires an assessment of all jobs in an organization and an unbiased comparison of the work done by women to the work done by men in order to determine whether the women are being compensated equitably. For example, the receptionist for a company may be as valuable to the organization as the warehouse shipper-receiver. The Pay Equity Act requires an employer to compensate work done by female job class(es) at least equally to work done by comparable male job class(es).
Pay equity is not about equal pay for equal work in the traditional sense of a woman and a man being paid the same wage for the same job. Instead, it focuses on whether traditionally female jobs are being paid the same as traditionally male jobs of equal value. Implementing pay equity is a four-step process. First, employers must identify the job classes within the establishment, including the gender and job rate of each class. Second, they must ascribe the value of each job class based on skill, effort, responsibility and working conditions. Third, they must compare all female job classes by using the prescribed methodology of compensation. Finally, if female job classes are underpaid, their wages must be adjusted to eliminate that gap.
Once pay equity is achieved, it is important that employers work actively to maintain it, especially as jobs are added or eliminated. There are penalties for failure to comply, including back payments to make up for past inequity and fines if there is wilful disregard of the rules. When there is a failure to abide with pay equity obligations, the rectification process can be onerous. Pay equity compliance is fairly straightforward to achieve at the onset, but can be difficult to remedy after non-compliance has already occurred.
If your business has 10 or more employees, but has not yet assessed or implemented pay equity, you should act quickly to ensure that you are complying with the PEA.
What’s the difference between “pay equity” and “equal pay for equal work”?
Definition
| Pay Equity | Equal Pay for Equal Work |
| Pay Equity is equal pay for work of equal value. | Equal Pay for Equal Work addresses situations in which men and women do the same work. |
| The Pay Equity Act requires employers to pay female jobs at least the same as male jobs if they are of comparable value. Pay equity compares jobs usually done by women with different jobs usually done by men. Female jobs are mostly or traditionally done by women such as librarian, childcare worker or secretary. Male jobs are mostly or traditionally done by men, such as truck driver, firefighter, or shipping clerk. | The Equal Pay provisions of the Employment Standards Act require that men and women receive equal pay when doing the same job or substantially the same job such as two cooks or two machine operators on the same line. |
| The value of jobs is based on the levels of skill, effort, responsibility and working conditions involved in doing the work. | Substantially the same work means the same kind of work that involves about the same levels of skill, effort, responsibility and working conditions. The duties do not have to be exactly the same to be substantially the same. |
Key Differences
| Pay Equity | Equal Pay for Equal Work |
| Pay equity compares the value and pay of different jobs, such as nurse and electrician. | Equal pay compares the pay of similar jobs. |
| Only people (both men and women) in jobs done traditionally by women can complain that their work is undervalued. | Either men or women can complain. If a male incumbent is paid less than a female incumbent in the same job, he can file a complaint. As well, a woman can complain if she is paid less than a man in the same job. |
Clarifying Questions
| Pay Equity | Equal Pay for Equal Work |
If you answer “yes” to the following questions you may have a pay equity complaint.
Call the Pay Equity Commission Toll-Free |
If you answer “yes” to the following questions you may have an equal pay for equal work complaint.
Call the Employment Standards Branch at |
