Federal Pay Equity Act Coming into Force

Summary: The Federal Pay Equity Act is coming into force (becomes law) on August 31, 2021. The Act will require federally regulated employers, including Federal Crown corporations, banks and railways, to create a workplace pay equity act within three years of becoming subject to the Act. The Act requires federally regulated employees to receive equal pay for work of equal value.

Why This Matters: This Act hopes to bridge the gender gap in the workplace by ensuring that people who perform jobs that are coded as “female jobs” are not paid less than people who perform jobs that are coded as “male jobs”. By focusing on the value of the work performed rather than the actual occupation, we can ensure that jobs that require the same skills and effort are compensated equally. Concentrating on work of equal value rather than on “equal pay for equal work” ensures that historically marginalized groups and jobs are compensated fairly.

Conclusion: This Act is coming into force on August 31, 2021. Employers with 10 or more federally regulated employees will be required to:

• Establish a pay equity plan (within three years of becoming subject to the Act) that examines any differences in compensation between positions of equal value that are mostly held by women and those mostly held by men;

• Eliminate differences in compensation identified in the plan (within three to five years depending on the size of the employer and the total amount of the wage adjustments due); and

• Revise and update the pay equity plan at a minimum of every five years to ensure that no gaps have been reintroduced and to close them if they have