Canada — Pay equity analysis and reporting

Pay equity legislation and federal/provincial requirements in Canada

In Canada, pay equity legislation is directed at finding and correcting systematic discrimination associated with jobs that are mostly held by women. In other words, the law ensures that pay for jobs usually held by women is on the same level as pay for jobs of similar value usually held by men. This means that the Canadian legislation focuses on job classes rather than on individual workers as is the case in many other countries.

The current federal regulations were instituted in 2018 under the Pay Equity Act. Legislation also exists at the provincial level, where regulations vary. In addition to the federal requirements, this page outlines the requirements for Ontario and Quebec, which are the two most stringent provinces.

To comply with Canada’s federal and provincial requirements, companies need to perform pay equity analysis and make a pay equity plan. This involves the following major steps:

1. Group together jobs with similar required qualifications and responsibilities. This creates job classes.
2. Establish the following for each job class:ValueCompensationGender predominance
3. Based on the jobs’ value, compare predominantly male and predominantly female job classes. Canada’s requirements are noteworthy for their specific guidelines for comparison, with each act describing the relevant method.
4. Canada also has specific standards for what must be done when a pay gap is identified. In the event that some predominantly female job classes are underpaid compared to their corresponding male job classes, this must be corrected. This means giving raises to all female employees in those job classes such that there is equal pay between the predominantly male/female job classes of comparable value. The federal act even spells out the mathematical formulas that should be used for the corrections.
5. There is a timeline for corrections. Under the federal act and Ontario’s regulations, employers may phase in the corrections if they are more than 1% of the payroll. At a minimum, the annual amount should be the lesser of these two amounts: a) the amount needed to reach pay equity or b) 1% of the previous year’s payroll. Quebec sets a maximum of four years for completing the corrections.

Some very small companies are exempt from both federal and provincial requirements. At the federal level, the requirements apply to all organizations that have 10 or more employees and that are under federal jurisdiction. (Here you can find more information and examples.) In Ontario, regulations apply to all public sector employers regardless of size and to all private sector employers with 10 or more employees. Quebec’s regulations apply to all employers with 10 or more employees.

Canada’s federal regulations are relatively new. This means that most organizations that are subject to the regulations are still working on their pay equity plans. The federal deadline for completing and posting the plan is September 3, 2024. (Please see this article for more timeline details.) After posting their first pay equity plan, covered employers will need to submit an annual pay equity statement and then update and re-post the plan itself every five years. Ontario requires ongoing maintenance of the plan, while Quebec requires employers to reevaluate pay equity every five years.

Please note that while this local resource information has been compiled by beqom's legal and pay equity experts, it does not constitute legal advice.