Basic Concepts in Pay Equity

Background to Pay Equity

Legislative Mandate

As a federally-regulated employer, you have a legal obligation to ensure male and female employees of your establishment are being paid equally for work of equal value. The pay equity legislative provisions relating to federally-regulated private sector and commercial Crown corporations are contained in section 11 of the Canadian Human Rights Act (CHRA), the Equal Wages Guidelines, 1986, (Guidelines) and sections 182 and 249 of the Canada Labour Code, Part III. Pay Equity provisions for the federal public sector are provided under the Public Sector Equitable Compensation Act, which is under the jurisdiction of the Treasury Board.

Pay equity is a fundamental human right. Section 11 of the CHRA states: "it is a discriminatory practice for an employer to establish or maintain differences in wages between male and female employees employed in the same establishment who are performing work of equal value."

The Guidelines, issued by the Canadian Human Rights Commission (CHRC), provide guidance on the pay equity provisions of section 11 of the CHRA and explain how they should apply to the federally-regulated private sector employers and commercial Crown Corporations. The Guidelines elaborate on the four factors used to assess the value of work (skill, effort, responsibility and working conditions); explain the concept of establishment; establish a scale to determine gender predominance; and outline reasonable factors that may justify different wages for work of equal value.

Sections 182 and 249 of the Canada Labour Code, Part III, empower Labour Program inspectors to inspect all records of federally- regulated employers to determine whether there is discrimination in pay based on gender. If an inspector has reasonable grounds to believe that you are not taking steps to implement pay equity in your establishment, he or she is authorized to notify the CHRC of this fact.

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