Canada Gazette, Part I, Volume 154, Number 46: Pay Equity Regulations

November 14, 2020

Statutory authority
Pay Equity Act

Sponsoring department
Department of Employment and Social Development

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

Pay equity is the concept of equal pay for work of equal value. The Act aims to address the systemic gender-based discrimination faced by women in federally regulated sectors by achieving pay equity through proactive rather than complaint-based means. This systemic discrimination manifests itself in compensation practices and pay systems of employers, which often results in employees in predominantly female job classes receiving less compensation than employees in predominantly male job classes who perform work of equal value.

This is especially relevant in light of the COVID-19 pandemic, which is disproportionately impacting women. According to Statistics Canada data, the labour force participation rate among core-aged women (25 to 54 years of age) decreased between February 2020 (83.4%) and July 2020 (82%). This reflects that women are involved in non-employment related activities, such as childcare, at a higher rate than prior to the COVID-19 pandemic. In addition, since February, women have experienced a higher rate of labour underutilization than men, meaning that more women who could have potentially been working are not working as much or not at all. While there have been employment gains since July 2020, women have experienced heavier employment losses and remain further from their prepandemic employment levels than men.^{footnote 1}

The proposed Regulations are needed to enable the coming into force of the Act. The proposed Regulations will prescribe key elements and details required to ensure that employers, bargaining agents and employees are able to fulfill their duties and obligations under the Act.

A full copy of the Pay Equity Regulations cost-benefit analysis will be made available upon request to ESDC.PayEquity-EquiteSalariale.EDSC@labour-travail.gc.ca.

Background

Since 1977, the CHRA has provided women working in federally regulated sectors — in both the private and public sectors — with the right to be paid the same wages as men when their jobs are of equal value, as measured by an objective evaluation of the skill, effort, responsibilities, and working conditions of those jobs. Women working in a federally regulated workplace who believe that they are underpaid compared to equal valued male-predominant jobs are entitled to file a complaint under the CHRA.

While the right to equal pay for work of equal value has been enshrined in the CHRA for more than 40 years, many women continue to be underpaid. In 2019, for every dollar a man earned in Canada, a woman earned only 89 cents as measured in hourly wages for full-time workers.^{footnote 2}

In 2004, a task force led by Dr. Beth Bilson (the Bilson Committee) published a report, entitled Pay Equity: A New Approach to a Fundamental Right (PDF), urging the federal government to adopt a proactive approach by replacing the complaint-based system with a requirement that all employers conduct a pay equity exercise to root out and correct gender-based pay inequities. Building off this report in 2016, the House of Common’s ESPE tabled a report, entitled It’s Time to Act, calling on the federal government to move away from the complaint-based system towards a new proactive pay equity regime for the federal jurisdiction.

The Government of Canada subsequently tabled legislation in Parliament on October 29, 2018, introducing a proactive pay equity regime. On December 13, 2018, the Act received royal assent.

Once in force, the Act will direct federally regulated employers with 10 or more federally regulated employees to take proactive steps to ensure that they are providing equal pay for work of equal value. Employers with fewer than 10 employees will remain covered by the existing CHRA framework. The Act will apply to the FRPS,^{footnote 3} the PSC, including the Royal Canadian Mounted Police (RCMP) and the Canadian Armed Forces,^{footnote 4} as well as to the Prime Minister’s Office and Minister’s Office. The regime will also apply to parliamentary workplaces through amendments to the Parliamentary Employment and Staff Relations Act (PESRA) in a manner tailored to respect parliamentary privilege. Amendments to PESRA were tabled and received royal assent alongside the Act, through the Budget Implementation Act, 2018, No. 2.

The Act will apply to federally regulated employers with 10 or more federally regulated employees, and will require employers with 100 or more employees and employers with 10 to 99 employees, some of which are unionized, to form a pay equity committee made up of employer and employee representatives. This committee will be responsible for developing a pay equity plan for the employees employed by that employer that will identify pay equity gaps that exist between predominantly male and female job classes of equal value, and determine any increases in compensation owed to employees in those female job classes that the employer must pay to close those gaps. Once the plan is developed and posted, these same employers must also form a committee within five years to ensure that pay equity was maintained and update that plan. Employers with 10 to 99 employees, none of which are unionized, can develop and implement a pay equity plan without having to establish a committee (although they can choose to form a committee).

Employers with 10 or more employees on the day that the Act comes into force will be required to develop a pay equity plan within three years of that date. Employers who come to employ 10 or more employees at any time after the Act comes into force will become subject to the Act on a day specified in the Act, and would be required to develop a pay equity plan within three years of that day.

The Act sets out the following steps an employer or pay equity committee must follow in establishing a pay equity plan.

The first step in establishing a pay equity plan is to identify the job classes found within the workplace. A job class is a group of positions that have similar duties, responsibilities and qualifications, are part of the same compensation plan and are within the same range of salary rates. For the core public administration (CPA), a job class consists of positions at the same group and level.

Next, the employer or pay equity committee must determine the gender predominance (i.e. female- or male-predominant, or gender neutral) of each of those job classes. A job class is to be considered predominant in one gender if at least 60% of the positions in the job class are occupied by one gender; historically, at least 60% of the positions in the job class were occupied by one gender; or the job class is one that is commonly associated with women or men due to gender-based occupational stereotyping.

Afterwards, the employer or pay equity committee must determine the value of work and calculate the compensation associated with each gender predominant job class. The criterion to be applied to determine the value of work is a composite of the skill, effort and responsibility required to perform the work, and the conditions under which the work is performed. In addition, when determining the value of work, the employer or committee must use a method that does not discriminate on the basis of gender, and makes it possible to determine the relative value of the work performed in all of the predominantly female and predominantly male job classes. When calculating the compensation of a job class, the employer or committee must include any form of remuneration payable for work performed by an employee — for example salaries, commissions, vacation pay, severance pay, bonuses, benefits and employer contributions to pension funds.

Next, the employer or pay equity committee must compare the compensation associated with female-predominant and male-predominant job classes of similar value in order to determine which female-predominant job classes require an increase in compensation. There are two methods in the Act that can be used for this comparison.

Equal average method: This method involves dividing up all predominantly male and female job classes into bands and then comparing the average compensation of all predominantly female job classes within a band with the average compensation of all predominantly male job classes within that band, or a neighbouring band or bands, as the case may be. A band is a range of job classes that are of equal or comparable value. It is up to the committee or employer to determine the width of the band. However, bands cannot overlap and must not be as wide as to encompass job classes that would not be considered of comparable value. A predominantly female job class will be owed an increase in compensation if the average compensation of all the predominantly female job classes in a band is less than the average compensation of the male job classes they are compared to, and the compensation of that particular predominantly female job class is below the male average. Pay equity is achieved when each of the male and female averages compared are equal when the increases are applied.

Equal line method: This method involves creating two regression lines: one for all the predominantly female job classes and one for all the predominantly male job classes. Each line represents the relationship between the job values and hourly rates of compensation. When the female regression line falls below the male regression line, all predominantly female job classes whose compensation is below the male regression line will be owed an increase in compensation. Pay equity is achieved when the male and female lines are made to coincide when the increases are applied.

A committee may use another method of its own choosing that it considers appropriate to compare compensation if it determines that neither method mentioned above can be used. If the employer is establishing the plan and determines that neither compensation comparison method can be used, the employer must apply to, and receive approval from, the Commissioner within the Canadian Human Rights Commission (CHRC) for authorization to use another method.

After comparing compensation, the employer or pay equity committee must then set out when the increases in compensation are due. All increases in compensation will be payable in full as of the day after the final version of the plan is posted. However, if the total amount of the increases in compensation that is owed to all employees is greater than 1% of the employer’s annual payroll, the employer will be allowed to phase in the increases over a number of years (no longer than three years for employers with 100 or more employees and no longer than five years for employers with 10 to 99 employees).

Finally, the employer or pay equity committee must post a draft pay equity plan and allow employees to provide comments on the draft plan. The employer or pay equity committee is then required to consider all comments received before preparing and posting the final version of the pay equity plan.

The Act also creates the position of Commissioner to administer and enforce the Act. The Commissioner’s role will become effective the day the Act comes into force. The Commissioner will play a key role by assisting workplace parties in understanding their rights and fulfilling their obligations, including through the development of tools and education materials, investigating complaints and considering applications, and facilitating the resolution of disputes. Employers will have to submit annual statements to the Commissioner regarding their pay equity plans.

The Act sets out the steps to complete a pay equity plan outlined above and the requirement to form a pay equity committee and submit annual statements to the Commissioner. However, some details of the process to complete a pay equity plan, as well as details for meeting other requirements under the Act, are to be prescribed in regulations.

Objective

The objectives of the new proactive pay equity regime are to ensure pay equity is achieved and maintained, to help address systemic gender discrimination in compensation practices and pay systems, and to contribute to reducing the gender wage gap by addressing the portion of the gap due to the undervaluation of work done by women. The proposed Regulations aim to support this broader policy objective by providing specific details on key elements of the pay equity process required to bring the Act into force, while also ensuring that the process is transparent and fair.

Description

The proposed Regulations would set requirements around posting of documents in the workplace, time limits for applications and notices with the Commissioner, a mathematical factor for each of the compensation comparison methods, steps to follow when regression lines cross under the equal line method, methods for developing a pay equity plan when there are no predominantly male job classes, and a process for updating pay equity plans (maintenance).

(1) Requirements around posting of documents in the workplace

Under the Act, employers are required to post several types of documents in the workplace, including notices; drafts and final versions of their initial and updated pay equity plans; documents issued by the Commissioner (e.g. decisions, orders, notices of violation); and the results of the Canadian Human Rights Tribunal’s inquiries into questions of law or jurisdiction.

The proposed Regulations would require employers to make all postings available in either printed form or electronically and accessible to all employees to whom the posting relates. Making documents accessible could include, for example, making them available in the following formats: digital accessible information system (known as DAISY); audio; e-text; braille; and accessible Portable Document Format (known as PDF); and ensuring documents are prepared in plain language. The proposed Regulations will also ensure that postings are clearly dated.

The proposed Regulations would also lay out requirements related to posting draft and final pay equity plans. For example, the proposed Regulations will require that the draft plan remains posted for at least 60 days (i.e. the minimum period of time provided in the Act for employees to comment on the draft), and require that a final pay equity plan remain posted until an updated version of the plan is posted.

Additionally, the proposed Regulations would require that

• An employer and group of employers post the notice stating their obligations under the Act as soon as they become subject to it and keep that notice posted until their pay equity plan (final or updated version) is posted or, in cases where they decide to join or leave a group of employers, until they post the new notice setting out their new obligations.
• Decisions, orders, notice of violations or other documents issued by the Commissioner, and decisions issued by the Canadian Human Rights Tribunal remain posted for the duration specified by either the Commissioner or the Tribunal, respectively.
• Notices of an increase in compensation remain posted until the later of (a) the sixtieth day after it is posted; or (b) the day on which the increases to which the notice relates are paid in full.

(2) Time limits for applications and notices with the Pay Equity Commissioner

The Act provides for a series of applications and notices that must be submitted to the Commissioner throughout the pay equity process by employers, and in certain cases, by bargaining agents or employees. The proposed Regulations set the time limits for these applications and notices:

Applications:

• An employer filing an application to the Commissioner under subsection 63(1) of the Act for authorization to phase in increases in compensation over a longer phase-in period than the one set out in the Act would have to do so no later than the day before the day on which the employer posts the notice of increases in compensation, as per subsection 56(1) of the Act.
• An employer, bargaining agent or non-unionized employee who wishes to establish more than one pay equity plan for the same employer would have to apply to the Commissioner within 12 months of the employer becoming subject to the Act.

Notices:

• An employer or group of employers who wish to voluntarily establish a pay equity committee to develop or update a pay equity plan would be required to submit a notice to the Commissioner within 60 days of notifying employees of their intention to establish a committee, as per subsection 14(2), 15(2), 65(2), or 66(2) of the Act.

(3) Mathematical factors for comparing compensation

The Act requires that an employer or pay equity committee compare the average compensations between predominantly female and male job classes to identify and address any pay equity gaps in the workplace. This is to be achieved using the equal average or equal line method, as set out in sections 49 and 50 of the Act and briefly described in the ‘‘Background’’ section, and using the formulae determined through regulation. The proposed Regulations would set the formulae for the two methods such that

• The size of the increase in compensation owed to each eligible female-predominant job class can be determined;
• Proportional adjustments are made so that female job classes further below the average male compensation in a band (for the equal average method) or below the male regression line for a given job value (for the equal line method) would receive larger increases in compensation;
• The prescribed formula will do this by generating a factor with a value between 0 and 1 with which to calculate each female job class increase. A factor of 1 would result in a job class receiving an increase equal to the full difference in compensation identified, and factors of between 0 and 0.99 providing a job with an increase equal to a percentage of that difference (e.g. a factor of 0.8 will provide the job class with an increase equal to 80% of the difference). A factor closer to 1 would be generated for a female job class further below the male average or line;
• Female job classes above the average male compensation in a band (for the equal average method) or above the male regression line (for the equal line method) would not receive an increase in compensation;
• After increases in compensation are made, the average female compensation aligns with the average compensation of the male job classes of equal or comparable value (for the equal average method) or that the female regression line coincides with the male regression line (for the equal line method); and
• Compensation is never decreased for any job class to achieve pay equity.

(4) Steps to follow when regression lines cross under the equal line method

When using the equal line method, there may be instances when female and male regression lines cross, resulting in part of the female line resting higher than part of the male line. When this occurs, the Act requires employers and pay equity committees to use the method set out in the proposed Regulations to perform the compensation comparison analysis.

As a first step, the employer or pay equity committee would calculate increases in compensation using the equal line method to see if, by applying those increases, the crossed male and female lines will coincide. If the lines can be made to coincide this way, then the employer or committee has completed all the steps to establish or update their pay equity plan. However, if the equal line method cannot make the crossed lines coincide, the employer or pay equity committee would choose to use one of the following three methods set out in the proposed Regulations: (a) the equal average method; (b) the segmented line method; or (c) the sum of the differences method.

The equal average method would be applied as set out in section 49 of the Act. A description of the equal average method is provided in the “Background” section above.

The segmented line approach would see an employer or pay equity committee divide all the job classes that were used to draw the initial male and female regression lines into two segments, using the point where the lines cross as the dividing line. As a result, all the job classes located to the left of the intersection would be one segment and the other job classes located to the right of the intersection would be the other segment. The employer or committee would then apply the equal line method to the job classes in each segment separately to draw and compare two new sets of male and female regression lines. If either set of regression lines cross again, then the employer or committee would then be required to use one of the other two methods available to them: equal average or sum of differences.

The sum of differences approach determines increases owed to female job classes below the male regression line by multiplying the differences in compensation between the compensation of these job classes and the compensation these job classes would have received if they were on the male line (i.e. same job value but higher amount of compensation) by the factor determined using the prescribed formula so that the sum of those differences equals the sum of the differences for all the female job classes above the male line and the compensation those job classes would have received if they were on the male line (i.e. same job value but lower amount of compensation). Pay equity is achieved when the average compensation of all female job classes is equal to what their average compensation would be if they were on the male regression line. Just as female job classes in a band will not receive increases in compensation where the female average is above the male average using the equal average method. When using the sum of differences method, female job class would not be eligible for an increase if the sum of the differences for female job classes above the male line is equal to or larger than the sum of the differences for female job classes below the male wage.

(5) Method for developing a pay equity plan when there are no predominantly male job classes

Pay equity relies on the comparison of compensation of predominantly male and predominantly female job classes of equal value. Therefore, a predominantly male job class is required to serve as a comparator for the pay equity regime to work. The proposed Regulations would allow private and public sector employers without any predominantly male job classes to choose, with certain restrictions, between two methods outlined in the proposed Regulations — the “proxy” or “typical job classes” methods — to establish a pay equity plan.

The proxy method would require an employer or pay equity committee without a male comparator to select three or more predominantly male job classes from another organization or business covered by the Act and to develop “proxy” male job classes in their plan. The proposed Regulations would set out requirements to be met by both the employer of the proxy workplace and by the employer or committee in need of a male comparator. To serve as a “proxy” workplace, the employer of that workplace would need to be subject to the Act, have identified at least three predominantly male job classes, calculated the compensation associated with each of those job classes, and agreed to provide data regarding the value of work and the compensation of the predominantly male job classes selected by the employer or committee in need of a male comparator. The proposed Regulations would also set out criteria that must be taken into account by the employer or workplace without a male comparator to select a proxy workplace that is similar to their own. With the information acquired from the proxy workplace, the employer or committee that uses the proxy method would then be required, under the proposed Regulations, to complete the steps of establishing a pay equity plan set out in the Act. It would do so by determining the value of work and calculating the compensation of the proxy male job classes as if they were job classes within the employer’s business or organization, and then comparing the results of this exercise to the predominantly female job classes using either the equal average or equal line method to determine if increases are owed to those predominantly female job classes.

The typical job classes method would require an employer or pay equity committee without a male comparator to use three fictional predominantly male job classes (maintenance worker, technician, and manager) set out in the proposed Regulations to complete their plans. The proposed Regulations would

• Include general job descriptions including duties and responsibilities, as well as employment requirements (e.g. certification, education, experience) for each typical job class;
• Include specific requirements regarding the determination of hourly salary and calculation of compensation (e.g. the need to include benefits) for each of the typical job classes; and
• Adapt the steps for establishing a plan that is set out in the Act in order to allow an employer to value the work and calculate the compensation of the fictional male comparators as if they were part of the employer’s business or organization.

Under the proposed Regulations, after having created these male comparators, the employer or pay equity committee would then required to compare them to the predominantly female job classes using either the equal average or equal line method to determine if increases are owed to those predominantly female job classes.

Finally, the proposed Regulations would also require the employer or pay equity committee to identify if they used either the proxy or typical job classes methods in their pay equity plan.

(6) Process for updating pay equity plans (maintenance)

The Act requires that the employer or pay equity committee update their pay equity plan at least once every five years in order to identify and address any pay equity gaps that have appeared since the posting of the initial — or, most recently updated — plan. However, the Act leaves many details on how to conduct a maintenance review to be prescribed by the proposed Regulations.

The proposed Regulations would require that pay equity gaps found during the maintenance process be closed by adjusting the compensation of the predominantly female job class that is paid less than the predominantly male job classes of equal or comparable value. Additionally, the proposed Regulations would require employers to make retroactive lump-sum payments for any pay equity gaps found, as well as ongoing wage adjustments as needed, which would begin once the updated pay equity plan is posted.

The proposed Regulations would set out the following process for updating pay equity plans.

Step 1: Collecting data

The proposed Regulations would require the employer or pay equity committee to collect data in the form of “snapshots,” and to use these snapshots as the basis of the pay equity analysis. A snapshot is a point-in-time data set (e.g. gender predominance of a job class, compensation of a job class) that the proposed Regulations would deem representative of the workplace for a one-year period.

The last snapshot used to develop the updated pay equity plan is referred to as the “final set,” and would be considered representative of the workplace for the period of time between the date that the preceding snapshot was taken, and the date that the updated plan is posted.

With the exception of the final set, snapshots must be collected every March 31 for the public sector and every December 31 or the day when each employer’s fiscal year ends for the private sector. The exact date on which the final set is to be collected would be chosen by the employer or pay equity committee. However, once the final set date has been selected, the proposed Regulations would provide that the updated plan must be posted within one year following this date.

Step 2: Analyzing workplace information

The proposed Regulations would require that the employer or pay equity committee carry out a pay equity analysis of the data collected in each snapshot, to identify any changes that are likely to have impacted pay equity since (i) the posting date of the initial or most recently updated plan; or, (ii) the previous snapshot, whichever is more recent.

Below is an overview of the types of changes that would need to be identified in the analysis of workplace information.

Changes to job class structures

Changes that fall under the following categories would be considered in the analysis:

• (a) the creation or elimination of a gender-predominant job class; and
• (b) the merger of two or more gender-predominant job classes.

Changes to gender predominance

Changes that fall under any of the following categories are to be considered in the analysis:

• (a) a gender-predominant job class that became nongender-predominant;
• (b) a male-predominant job class that became femalepredominant;
• (c) a female-predominant job class that became male-predominant; and,
• (d) a non-gender-predominant job class that became gender-predominant.

Changes to duties, responsibilities and working conditions of a job class

Changes in the duties, responsibilities and working conditions of a gender-predominant job class that are significant, and that impact the majority of the positions in the job class for more than a temporary period must be analysed to determine whether they led to a change in the value of work performed.

Changes in compensation

For each snapshot, the employer or pay equity committee must determine the total compensation for each gender-predominant job class.

They would then identify changes in compensation, on a percentage of compensation basis,^{footnote 5} of a gender-predominant job class that were not made equally across all other gender-predominant job classes.

Step 3: Comparison of compensation

If the analysis of a snapshot reveals any change set out above, the proposed Regulations would require that the employer or pay equity committee conduct a comparison of compensation to identify and measure the size of any resulting pay equity gap.

In the case where new rates of pay applicable to any snapshot came into effect retroactively (e.g. due to retroactive implementation of a new collective agreement) within the same maintenance cycle, the new rates of pay would be used when analysing the snapshot.

Phasing-in of adjustments made under the initial plan

Where an increase in compensation of a female-predominant job class resulting from the implementation of the initial pay equity plan is phased-in over time and overlaps with the maintenance cycle, the employer or pay equity committee would be required to calculate compensation as if all phased-in increases had been made.

Workplaces with multiple bargaining units

Where a workplace has multiple bargaining units, the proposed Regulations would also set out approaches to comparing compensation between job classes that are covered by a collective agreement that has not expired and job classes affected by a statutory freeze under the Federal Public Sector Labour Relations Act or the Canada Labour Code due to the expiry of their collective agreement.

In situations where the employer or pay equity committee determines that a comparison of compensation would be made between gender-predominant job classes with active and frozen rates of pay, the employer or pay equity committee would use the “historical analysis approach,” unless the criteria for the use of the “administrative rate approach” apply, to determine the compensation of each job class.

The historical analysis approach would require that the employer or pay equity committee find the most recent year when 50% or less of the gender-predominant job classes that represent 50% or less of the population covered by the pay equity plan were subject to a statutory freeze. The comparison of compensation would then be based on rates of pay for that year, using the administrative rate approach to model a rate of pay for those job classes which remain covered by a statutory freeze.

The administrative rate approach would only be used by an employer or pay equity committee in situations where 50% or less of gender-predominant job classes that represent 50% or less of the population covered by the pay equity plan are subject to a statutory freeze. They would then model an administrative rate of pay for job classes covered by expired collective agreements, by applying an adjustment factor equal to the average of all wage increases negotiated by all job classes (including gender-neutral ones).

The proposed Regulations would allow a pay equity committee to agree by vote, to opt-out of the above default approaches, provided that they meet a proposed regulatory duty to negotiate reasonable measures to address the comparison between active and frozen rates of pay issue.

Regulatory development

Consultation

In spring 2019, the Labour Program held several information sessions with stakeholders on the Act, at which the proposed regulatory items were broadly introduced. The first session, on April 16, 2019, was attended by over 20 organizations from different stakeholder groups. The following five sessions were more targeted, and provided information to the Canadian Bankers Association, Unifor, members of the Federally Regulated Employers – Transportation and Communications (FETCO) organization, separate federal agencies and parliamentary stakeholders.

Between May 31 and June 28, 2019, the Labour Program carried out two regulatory consultations. The first was an online survey to gather feedback from small employers to inform the development of a method to complete a pay equity plan in a business or organization where there are no predominantly male jobs. The second was a discussion paper soliciting the opinions of stakeholders on all proposed regulatory items. The online survey received 110 responses. The Labour Program received 37 written submissions in response to the discussion paper from employers, employer associations, unions and labour organizations, advocacy groups and subject matter experts.

In their written submissions, employers and labour organizations held divergent views on the scope and purpose of the proposed Regulations. Employers were generally of the opinion that the regulations should take a “light touch” approach by leaving it up to the parties completing the pay equity plans to determine the best course of action in most instances (for example how long a document should be posted). If requirements are prescribed, employers wanted them to be flexible. Labour organizations were generally of the opinion that the regulations should create prescriptive requirements for employers to follow to provide the best protections possible for employees.

More specifically, the key takeaways for each of the regulatory items are the following.

(1) Requirements around posting of documents in the workplace

The proposed Regulations would require employers to make posting available in either electronic or printed forms. While some stakeholders (mostly employers) were in agreement with this proposition while giving preference to electronic postings, others (mostly employees) wanted to require both. The proposed Regulations would not specifically require a printed form but rather leave it to the employer or committee to choose what format is appropriate for their organizations, as long as the posting is easily accessible.

(2) Time limits for application and notices with the Pay Equity Commissioner

The proposed time limits were chosen in light of the feedback received from stakeholders. They were often selected because they represented a fair compromise between stakeholders that wished to see short time limits and others who preferred longer time limits. In general, employee stakeholders wanted shorter deadlines to expedite the process to ensure that pay equity is achieved quickly and that businesses do not linger and or default on their obligations. In contrast, employer stakeholders wanted to have the most time possible to submit applications and post notices in order to have the most flexibility possible. Therefore, the proposed Regulations would offer flexibility while still encouraging parties to move the pay equity process forward.

(3) Mathematical factor for comparing compensation

Both employee and employer stakeholders generally raised concerns that the use of a mathematical factor could overcomplicate the process. However, the factor formulae for the equal average and the equal line methods are necessary to successfully complete the pay equity process in a manner that achieves the intent of sections 49 and 50 of the Act. Therefore, they were designed in the simplest way possible to ensure the desired outcomes.

(4) Steps to follow when regression lines cross under the equal line method

Some stakeholders proposed only increasing the compensation of the female job classes that fall below the regression line, regardless of whether the lines cross or not. Other stakeholders suggested referring back to the equal line method in situations where the regression lines cross. Finally, several stakeholders proposed the use of the segmented line approach to deal with crossed lines under the equal line method. Ultimately, a combination of the segmented line approach, the sum of differences approach and the equal average method was selected as helping to achieve the desired outcomes while also providing flexibility for pay equity committees or employers to choose from various options.

(5) Method for developing a pay equity plan when there are no predominantly male job classes

In general, the feedback received indicated that the proposed Regulations should strike a balance between guidance and flexibility if such a circumstance should arise. That is why the proposed Regulations would provide two options to choose from in such a circumstance: the proxy method and typical job classes method. Some stakeholders asked for the typical job classes method given that they are familiar with it since it is used in Quebec’s pay equity regime. However, those stakeholders also voiced their opinions that offering only two fictional job classes did not offer enough flexibility to employers and committees to successfully represent their organizational depth. Therefore, the proposed Regulations would offer the use of three fictional job classes.

(6) Process for updating pay equity plans (maintenance)

The proposed Regulations would include a list of the types of changes that could have an impact on pay equity, and thus, would warrant re-examination at maintenance. That list is broadly consistent with what stakeholders proposed as potential changes that could likely affect pay equity in one’s organization. Further, during consultations, the Labour Program canvassed stakeholders as to whether wage increases that are phased in over time but overlap with the maintenance cycle should be captured as part of that maintenance cycle. A vast majority of stakeholders were of the opinion that the employer or pay equity committee would be required to calculate compensation as if all phased-in increases had already been paid. The proposed Regulations would be consistent with that view. In addition, the stakeholders flagged the issue of collective bargaining and including some type of measure to ensure that wage comparisons are done using wages from the same collective bargaining round. The proposed Regulations would include procedures — applicable to both plan development and maintenance — that would prevent comparisons of compensation from being made across bargaining rounds.

Consequently, as detailed above, the proposed Regulations would strike a fair balance by proposing requirements only where it is considered necessary for the purposes of ensuring that employers and pay equity committees are able to complete requirements set out in the Act and within the legislated time limits, and also ensure that the process of developing or revising a pay equity plan is transparent to the employees to whom that plan relates.

Lastly, from September 2019 to January 2020, and again in May 2020, two pay equity compensation comparison experts specializing in mathematical and statistical approaches to comparing compensation were engaged. Specifically, feedback was gathered on the development of compensation adjustment factor formulae for the equal average method and equal line method (item 3) and on ways to address situations where the female and male regression lines cross under the equal line method (item 4).

Modern treaty obligations and Indigenous engagement and consultation

The Act will not automatically apply to First Nations band councils as employers. Also referred to in the Act as “Indigenous governing bodies” they will be excluded from the application of the Act until a date the Governor in Council may, by order, specify. This regulatory proposal would therefore not affect these employers. The Labour Program will be conducting a separate collaborative engagement process with Indigenous partners to collect their views on the Act itself and see how it can be tailored to ensure positive results in an Indigenous context.

However, Indigenous-owned federally regulated private-sector businesses will be subject to the Act upon its coming into force. Stakeholders representing Indigenous-owned federally regulated businesses have been involved throughout the consultation process.

Instrument choice

The Labour Program looked at two separate options to ensure pay equity is achieved and maintained in federally regulated workplaces: (1) status quo; or (2) a legislative and regulatory framework.

As evidence and history has shown, ensuring that pay equity as a human right is respected is difficult when using the existing complaint-based system under the CHRA. In some cases, women are simply not aware that they are being underpaid compared to men doing work of equal value or that their work is undervalued. In other cases, they are afraid or discouraged by the idea of launching a human rights complaint against their employer. This process can be daunting, administratively burdensome and resource-intensive for all parties involved. A complaint-based process is not effective in ensuring that pay equity as a human right is respected. Providing non-regulatory tools would help raise awareness, and provide best practices in the hopes that employers will start using proactive pay equity measures. However, such measures would not be enforceable and would fail to meet the recommendations made by the Bilson Committee and ESPE.

A legislative and regulatory framework was considered the only instrument that would effectively ensure that proactive pay equity, as a right, is respected in the federal jurisdiction and adequately respond to the recommendations made by both the Bilson Committee and ESPE.

With that in mind, the Act was drafted, and drafted in such a way to allow the Governor in Council to make regulations on specific items. These proposed Regulations are required in order for the Act to come into force and thus for pay equity as a human right to be respected.

Regulatory analysis

Rationale

The proposed Regulations will enable the coming into force of the Act by prescribing key elements and procedural details required to ensure that employers, bargaining agents and employees are able to fulfill their duties and obligations under the Act.

The rationale for each of the regulatory items described above is as follows:

• (1) Posting requirements: The proposed Regulations would ensure that key documents are accessible to all employees, and that certain documents are posted at a certain time and remain posted for the amount of time necessary to ensure the pay equity process remains participatory and transparent in nature.
• (2) Time limits for applications and notice: The proposed Regulations would ensure that the application for multiple plans and extended phase in periods are submitted in a timely manner and do not lead to delays in establishing or updating a plan. Additionally, the proposed Regulations would require that a notice informing the Commissioner of the voluntary establishment of a pay equity committee be submitted within 60 days. This is to ensure that the Commissioner receives information impacting an employer’s obligations and flexibilities under the Act in a timely manner.
• (3) Mathematical factors for comparing compensation: The proposed Regulations would allow an employer or the pay equity committee to complete the comparison of compensation using the methods set out in the Act and determine the increases owed to individual job classes.
• (4) Steps to follow when regression lines cross: The proposed Regulations would provide an employer and a pay equity committee with clear steps to follow to complete their pay equity plan when they use the equal line method to compare compensation and the female and male regression lines cross.
• (5) Method for developing a pay equity plan when there are no predominantly male job classes: The proposed Regulations would allow an employer or pay equity committee without a male comparator to establish a pay equity plan and achieve pay equity in their workplace.
• (6) Pay equity plan maintenance process: The proposed Regulations would provide the steps to follow to update a pay equity plan and determine if pay equity gaps arose since the posting of the most recent version of a pay equity plan, and thus ensure that pay equity is maintained and employees are compensated appropriately. Additionally, the proposed Regulations would provide a process for employers with multiple bargaining units to compare job classes covered by different collective agreements which are at different stages of the bargaining process and, thus, correct for the problems that arise when comparing job classes with active rates of pay to job classes with frozen rates of pay (i.e. differences in compensation due to reasons other than pay equity) that could lead to inequitable increases being paid to predominantly female job classes.

Benefits and costs

The proposed Regulations would ensure that employers and pay equity committees will be able to complete requirements set out in the Act and within the legislated time limits, and also ensure that the process of developing or revising a pay equity plan is transparent to the employees to whom that plan relates. Most of the costs borne by employers to meet their requirements under the new regime stem from the legislation itself.

The costs and cost savings presented herein apply only to the proposed Regulations and do not include costs attributable to the Act. Various elements of the proposed Regulations would either create new costs for businesses, provide net cost savings or be cost neutral.

The costs to businesses and organizations introduced by the proposed Regulations fall into two categories: costs to carry out the activities stemming from regulatory requirements and payouts to employees (i.e. increases in compensation or lump sum payments). In general, for each activity under a given regulatory requirement, the cost is determined by multiplying

• the estimated number of hours of work it would take to understand the proposed Regulations and then carry out the prescribed tasks in each activity in each workplace;
• the average hourly wage of an employee; and
• the estimated number of businesses or organization to be impacted by the proposed Regulations.

Where necessary and where data is available, the costs are further broken down by the size of the business or organization: small (10–99 employees), medium (100–499 employees) and large (500+ employees).

Although the Act requires employers to increase employees’ compensation or to pay lump sum amounts when either or both are owed, all payouts made using either the equal average or equal line methods set out in the Act will be determined using mathematical factors set out in these proposed Regulations. This is also the case for employers or pay equity committees who use the proposed proxy and typical job class methods when there are no comparators, or the proposed segmented line method used when regression lines cross, as a mathematical factor set out in the proposed Regulations will be used to determine the amount of the increases owed. Additionally, the proposed sum of differences method to address crossed regression lines will also lead to payouts when it is used. Therefore, the cost of all payouts required under the Act is attributable to the proposed Regulations. To determine the cost of payouts, the approach was to multiply together:

• the number of employees expected to receive either increases in compensation or retroactive lump sum amounts, whichever applied; and
• an estimate of the annual payout per employee.

Sources of information for costing

For the FRPS, the number of employers and employees were derived from the 2015 Federal Jurisdiction Workplace Survey (FJWS).

Employee counts from the 2015 FJWS were projected to 2019 using a growth rate derived from the Survey of Employment, Payroll, and Hours from 2015 to 2019.

Wage rate estimates were obtained from the 2019 Labour Force Survey. To calculate present value (PV), a discount rate of 7% was used, as recommended by the Canadian Cost-Benefit Analysis Guide for the evaluation of regulations, projects, programs or other government initiatives.

The costs of payouts to be made through the proxy and typical job class regulations, as well as the maintenance regulations, were based on results published by the Quebec Minister of Labour adjusted to reflect the unique nature of the FRPS and federal workplaces. Quebec results were used given the similarities between that province’s proxy and typical job class methods, as well as the similarities between that province’s approach to maintaining pay equity plans, and what is being proposed in these proposed Regulations.

Information solicited from HR firms with experience completing pay equity plans for businesses in Ontario and Quebec was used to estimate such matters as the number of employers likely to take a certain action (e.g. apply to be recognized as a single employer), encounter certain situations (e.g. female job classes being above the male regression line) and the number of hours it would likely take to complete certain processes (e.g. gather workplace information to analyze).

Finally, the costing assumes that employers will implement all tasks related to the establishment of a pay equity plan during the third Year after the coming into force of the Act except for the submission of the two applications and one notice, where it is assumed that these will take place in the first year. The costing also assumes that tasks related to the maintenance stages will take place in the eighth year.

For the PSC, it is assumed that there will be no incremental costs associated with the proposed Regulations and that all costs related to the pay equity exercise (i.e. administrative costs; any wage adjustments needed) are attributable to the Act.

More specifically, it is assumed that the PSC would complete the pay equity exercise even in the absence of prescribed mathematical factor formulae by following subsection 48(2) of the Act, which allows for the completion of a pay equity process in cases where neither the equal average nor equal line methods can be used (i.e. through the use of an alternative method for comparison of compensation). It is also assumed that under this scenario, the PSC would use a wage comparison method that is similar to the methods set out in the Act.

Four key drivers underlie these assumptions: (1) constraints imposed by the Act to ensure certain outcomes of wage comparison factors even without regulations (i.e. requirements in sections 49 and 50 that averages or lines must coincide, as the case may be); (2) existing expertise with respect to wage comparison formulae; (3) heightened sensitivity to reputational risk in the public sector context due to highly unionized environments and past pay equity litigation under the CHRA model; and, (4) the Government of Canada’s commitment to protecting human rights.

Costs

The following breaks down the costs imposed by the proposed Regulations along the 6 core requirements:

• (1) requirements for posting of documents in the workplace;
• (2) time limits for filing applications and notices with the Pay Equity Commissioner;
• (3) a mathematical factor for comparing compensation;
• (4) steps to follow when regression lines cross;
• (5) a method for developing a pay equity plan when there are no predominantly male job classes (proxy); and
• (6) a process for updating the pay equity plans (maintenance).

All the costs and benefits are expressed in 2020 present value base year, and 2019 price year, and cover a 10-year period (2020–2029).

(1) Requirements for posting of documents in the workplace

The costs for the FRPS that arise from this requirement stem from preparing postings in braille, in large print, or any other form that makes the document accessible. As the work of reformatting can be done in-house except braille, the cost of having braille formats printed was also calculated. Costing assumes that the number of employers who need to post accessible documents would remain the same both at establishment and maintenance stages.

The costs are estimated at approximately $168,822 ($24,036 annualized) for medium and large businesses as a whole and organizations, and $249,741 ($35,557 annualized) for small businesses and organizations in the federally regulated private sector for a total cost of $418,563.

There are no anticipated costs for the PSC arising from this requirement because it is expected that PSC employers would adopt measures similar to the proposed Regulations (i.e. accessibility, timing, and duration of posting) by proceeding to post all required materials in the necessary formats to ensure that all those to whom the plans apply can access the information. The rationale for this is that existing Treasury Board policies and directives on accessibility and duty to accommodate in the workplace already require the public sector to do exactly what the proposed Regulations are requiring. For example, the Policy on Communications and Federal Identity requires those subject to the Policy, including part of the core public administration, to be responsible for enabling communications with the public about policies, programs, services and initiatives, meeting the requirements of the Standard on Web Accessibility, and providing published information on request that is substantially equal for persons with disabilities. As a result of such policies and directives, the PSC is already accustomed to ensuring that employees receive pertinent information in formats that they can access; therefore, it is assumed that the PSC would also follow similar procedures with any relevant pay equity information.

(2) Time limits for filing applications and notices with the Pay Equity Commissioner

The costs for the FRPS arise from having to produce the application or notice in the set period of time. Costs were estimated for both the establishment and maintenance stages as applicable to the specific notice or application.

The costs are estimated at approximately $66,899 ($9,525 annualized) for medium and large businesses and organizations as whole (100 employees or more) and $136,823 ($19,481 annualized) for small businesses and organizations (10 to 99 employees) in the federally regulated private sector for a total cost of $203,722. These 10-year figures include an element of administrative burden: $46,816 for small businesses and organizations and $22,300 for medium and large businesses and organizations for a total of $69,116.

There are no anticipated costs for the PSC arising from this requirement because it is it is assumed that PSC employers would likely still provide any applications and/or notice to the Commissioner, as needed, to comply with the provisions of the Act that require they be submitted even in the absence of the specific timelines prescribed in the proposed Regulations. This approach recognizes the heightened public sector stakeholder interest in pay equity matters and supports the Government of Canada’s commitment to gender equality and protecting the human right to equal pay for work of equal value.

(3) A mathematical factor for comparing compensation

The costs for the FRPS related to this requirement arise from reading and understanding the regulatory requirement and then applying the math factor formula as needed at both establishment and maintenance stages.

The total costs are estimated at approximately $82,470 ($11,742 annualized) for medium and large businesses and organizations as a whole and $208,172 ($29,639 annualized) for small businesses and organizations in the federally regulated private sector, for a total cost of $290,642.

There are no anticipated costs for the PSC arising from this requirement because it is anticipated that the PSC would take a similar approach as the one prescribed in the proposed Regulations, as per the rationale set out above.

(4) Steps to follow when regression lines cross

The costs for the FRPS related to this requirement arise from understanding and applying the crossed-regression line regulations as needed at both establishment and maintenance stages. The total costs are estimated at approximately $63,700 ($9,069 annualized) for large businesses and organizations as a whole and $104,086 ($14,820 annualized) for small businesses and organizations in the federally regulated private sector for a total cost of $167,786.

There are no costs for the PSC arising from this requirement because it is anticipated that the PSC would develop and apply a similar method were it not prescribed in the proposed Regulations. More specifically, if any method for the comparison of compensation adopted under subsection 48(2) of the Act were to result in crossed regression lines, it is assumed that the PSC would develop and apply an approach similar to what would be prescribed in the proposed Regulations (i.e. equal average, segmented line, or sum of differences), given the four key drivers mentioned above.

(5) The method for developing a pay equity plan when there are no predominantly male job classes

The costs for the FRPS that arise from the requirement prescribing a method to be used to develop a pay equity plan when there are no predominantly male job classes stem from following the prescribed steps to determine the value of work and calculate and compare compensation using either the proxy method or the typical job classes method. Additionally, when using the proxy method, there will be costs of finding a proxy employer and obtaining the necessary information from them. Costs are calculated for the establishment stage of the pay equity plan only as this process will not be followed when updating a pay equity plan. Proposed regulations for maintenance will be introduced at a later date. As large businesses and organizations are expected to have male-predominant job classes to use as comparators, costing for these proposed Regulations were done only for small and medium-sized businesses and organizations.

The total costs in terms of present-day values for the 10-year period after implementation are estimated at approximately $4,973 ($708 annualized) for medium-sized businesses and organizations as a whole and $77,860 ($11,086 annualized) for small businesses and organizations in the federally regulated private sector for a total cost of $82,833.

Given the size of the PSC and the expectation that only a limited number (i.e. less than 1%) of small PSC employers would need a proxy approach, associated costs are expected to be small and are not calculated for the purposes of this exercise.

(6) Pay equity plan maintenance process

The costs for the FRPS that arise from this requirement stem from taking annual snapshots and analyzing each snapshot to determine if retroactive lump sums or increases in compensation are owed to employees. In the FRPS, costing assumes that the Act requires employers to take one “snapshot” to determine retroactive payment and increases in compensation moving forward. Consequently, costs were estimated for taking three additional snapshots (for a total of four annual snapshots in the five-year period before an updated plan must be posted) and analyzing those snapshots after the last snapshot is taken.

The total net costs in terms of present-day values for the 10-year period after implementation are estimated at approximately $565,158 ($80,466 annualized) for medium and large businesses as a whole and organizations and $1,521,203 ($216,585 annualized) for small businesses and organizations in the federally regulated private sector for a total cost of $2,086,361.

There are no anticipated costs for the PSC arising from this requirement because it is anticipated that, in the absence of the proposed Regulations, PSC employers would gather workplace data from annual snapshots over the five-year maintenance period, similar to what would be prescribed in the proposed Regulations, mainly for technical reasons. Given the highly unionized workforce with frequently changing pay structures due to collective agreements with differing effective dates, multiple snapshots over the five-year period would help give a more accurate picture of any retroactive liabilities. The annual snapshot approach also offers greater accuracy compared to a single-snapshot approach in determining when compensation gaps emerged over the five-year maintenance phase, which would result in a more accurate determination of any retroactive adjustments owed (i.e. minimize financial and reputational risk of overpayments or underpayments to employees).

Payouts (increases in compensation and lump sum amounts)

For reasons stated above, the cost of all payout required under the Act, for both establishment and maintenance stages, is attributable to the proposed Regulations for the FRPS. In the 10-year period after the Act comes into force, employers subject to the Act from the day it comes into force will only begin to pay increases in compensation at the beginning of Year 4. As it is assumed that pay equity is achieved once these increases are paid, annual payouts — both increases in compensation and lump sum amounts — for years 5 through 10 were calculated so as to maintain pay equity.

In 2020 present value terms, total payouts over the 10-year period are estimated to be $1.950B for all businesses and organizations in the FRPS, with small businesses and organizations paying out approximately $0.098B, and medium and large businesses and organizations paying out approximately $1.852B of that amount. Also in present value terms, annual payouts will amount to approximately $11.2M to $17.4M each Year for small businesses and organizations and approximately $222M to $306M each Year for medium and large businesses and organizations.

For the PSC, the cost of all payouts are attributable to the Act because it is assumed that employers and pay equity committees would take a similar approach under subsection 48(2) to that prescribed in the proposed Regulations, especially the mathematical factor requirement from which most, if not all, payouts would stem.

Cost-savings

For both the FRPS and PSC, the benefits of the proposed Regulations generally are attributable to the clarity and transparency they will provide in workplaces implementing the Act. In the PSC, providing clarity and certainty around key elements of the pay equity plan development and maintenance processes found in the Act is estimated to result in cost savings of approximately $2M over 10 years in present value terms.

For the FRPS, by contrast, most of the cost savings stemming from increased clarity and transparency cannot be easily quantified but are nonetheless substantial. For example, increased transparency is expected to bolster employee confidence that their right to pay equity is being respected that will, in turn, contribute to a sense of empowerment in the workplace. This could have positive impacts on the workplace and overall economy, including increased productivity and higher retention rates as employees choose to continue to work for their employer, which would reduce how much time and resources an employer has to spend on hiring and training new employees.

However, by allowing FRPS employers to complete and maintain their pay equity plans, in present value terms, the proposed Regulations are likely to save these employers at least an estimated $30M in savings over 10 years in legal fees that would have been spent under the CHRA complaint-based approach. These estimates are conservative as they do not account for saved legal expenses paid by the respective unions or individual employees involved in these cases nor for productivity lost by management and employees for time spent participating in litigation.

Costs to the Government

The federal government as regulator will incur the costs necessary to implement and enforce the proposed Regulations, including creating and making available online tools and resources for stakeholders, and the cost of processing applications within the proposed time limits. In present value terms, it is estimated that the total costs over a 10-year period would be $22,100. In addition, there would be some enforcement costs for the proposed Regulations regarding the FRPS as per the table below.

Table 1: Summary of enforcement resource requirements

Regulatory Requirements	Enforcement Needs Description	Enforcement Resource Requirements
1. Time limits for filing applications and notices with the Pay Equity Commissioner	There would be no enforcement needs with this requirement, because after the time limit is reached, it is too late to submit an application or notice.	None
2. Method for developing a pay equity plan when there are no predominantly male job classes (proxy)	In the event that a notice of dispute or objection, or a complaint is filed with the Commissioner, the Commissioner would contact the parties to help them settle the matter. If the parties cannot reach an agreement, the Commissioner would order a settlement.	Negligible. Expect very few objections or complaints. There are few organizations (less than 200) in the FRPS and PSC that will have no predominately male job class.
3. Posting of documents in the workplace	In the event that a complaint is filed with the Commissioner about a document not being posted as per this requirement, the Commissioner would contact the parties to help them settle the matter. If the parties cannot agree, the Commissioner would order the employer to comply.	Negligible. Expect very few complaints.
4. Process for updating the pay equity plans (maintenance)	In the event that a notice of dispute or objection, or a complaint is filed with the Commissioner, the Commissioner would contact the parties to help them settle the matter. If the parties cannot agree, the Commissioner would settle the matter and direct the parties accordingly.	Negligible to minor. Expect few complaints. Note: only expect complaints to begin in Year 9 when employers are updating their plan.
5. Mathematical factor for comparing compensation	In the event that a notice of objection or complaint is filed with the Commissioner, the Commissioner would contact the parties to help them settle the matter. If the parties cannot agree, the Commissioner would order a settlement.	Negligible. Expect few objections and complaints, because applications of the mathematical factor is a straightforward and non-controversial step to pay equity (PE) plan completion. Compliance issues will rather centre on not having done a PE outright, which is rather non-compliance with the Act.
6. Steps to follow when regression lines cross	In the event that a matter of dispute or objection, or a complaint is filed with the Commissioner, the Commissioner would contact the parties to help them settle the matter. If the parties cannot reach an agreement, the Commissioner would order a settlement.	Negligible. Expect few objections or complaints, because applications of the cross-regression line formulae is a non-controversial step to PE plan completion. Compliance issues will rather centre on not having done a PE outright, which is rather non-compliance with the Act.

Cost-benefit statement

• Number of years: 10
• Base price Year for costing: 2019
• Present value base year: 2020
• Discount rate: 7%

Table 2: Monetized costs

Impacted Stakeholder	Description of Cost	Year 1	Year 3 table b2 note *	Year 4 table b2 note **	Final Year	Total	Annualized Value
Government as regulator	Implementation and enforcement	$5,300	$0	$0	$0	$22,400	$3,200
Employer: public service of Canada (PSC)	Minimal costs related to developing a proxy approach (not estimated)	$0	$0	$0	$0	$0	$0
Employer: federally regulated private sector (FRPS)	Compliance with requirements of the proposed Regulations	$0.20M	$0.96M	$0	$0	$3.25M	$0.46M
	Payouts	$0	$0	$323.8M	233.5M	1,949.9M	$277.6M
Employees	No cost	0	0	0	0	0	0
All stakeholders	Total costs	$0.21M	$0.96M	$323.8M	$233.5M	$1,953.2M	$278.1M
Table b2 note(s) Table b2 note * By the end of Year 3, pay equity plans are to be completed. Return to table b2 note * referrer Table b2 note ** Year 4 is the first Year when pay adjustments start. Return to table b2 note ** referrer

Table 3: Monetized benefits

Impacted Stakeholder	Description of Benefit	Year 1	Year 3 table b3 note *	Year 4 table b3 note **	Final Year	Total	Annualized Value
Government as regulator	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Employer: PSC	Time and resources saved with the proposed Regulations	0	0	$0.33M	$0.22M	$1.9M	$0.27M
Employer: FRPS	Legal costs that could be incurred in the absence of PE regulation	$4M	$3.5M	$3.3M	$2.2M	$30.1M	$4.3M
Employees	PE adjustment payouts to FRPS employees	0	0	$323.8M	$223.5M	$1,949.9M	$277.6M
All stakeholders	Total benefits	$4M	$3.5M	$327.4	$235.9M	$1,981.9M	$282.2M
Table b3 note(s) Table b3 note * By the end of year 3, pay equity plans are to be completed. Return to table b3 note * referrer Table b3 note ** Year 4 is the first year when pay adjustments start. Return to table b3 note ** referrer

Table 4: Summary of monetized costs and benefits

Impacted Stakeholder	Year 1	Year 3 table b4 note *	Year 4 table b4 note **	Final Year	Total	Annualized Value
Total costs	$0.21M	$0.96M	$323.8M	$233.5M	$1,953.2M	$278.1M
Total benefits	$4M	$3.5M	$327.4	$235.9M	$1,981.9M	$282.2M
NET IMPACT	$3.8M	$2.5M	$3.6M	$2.4M	$28.7M	$4.1M
Table b4 note(s) Table b4 note * By the end of year 3, pay equity plans are to be completed. Return to table b4 note * referrer Table b4 note ** Year 4 is the first year when pay adjustments start. Return to table b4 note ** referrer

Qualitative impacts

Positive impacts

Employers:

• Higher level of transparency regarding pay equity among federal jurisdiction employers.
• Increased productivity and better workplace morale.

Employees:

• Higher level of transparency regarding pay equity among federal jurisdiction employees.
• Reduced legal cost to resolve pay equity disputes for both parties.
• Increased productivity and better workplace morale.
• Improved employees’ mental health and reduced stress

Sensitivity analysis

In terms of sensitivity analysis for the FRPS, on the cost side, focus was placed on maintenance requirements, which accounts for just over 70% of compliance costs to employers before payouts. For each of the other 5 requirements, the share of the cost to employers is 10% or less (excluding pay adjustments). A particularly uncertain assumption regarding maintenance was the time required for the employer to gather employee information (time required for the employer to take a snapshot) and to analyze this information and update the pay equity plan. The consulting firm solicited for information had provided time ranges for these various aspects of maintenance. The middle of the range was used for the estimate for the cost-benefit analysis, with lower and upper bounds of the range used for the sensitivity analysis. At the upper range of the time required, the cost of compliance increased by about 40% (excluding pay adjustments). Nonetheless, given the significant benefit to employers from savings in legal costs, the net FRPS benefit remained well above zero, about $26M, declining by about $0.8M.

On the benefit side, for both the legal cost savings in the FRPS and the benefits associated with the PSC, the cost-benefit analysis assumed values representing a lower bound estimate. This is to say that benefits may be greater than estimated (i.e. $30M in FRPS legal cost savings and $2M in benefits associated with the PSC).

Small business lens

The small business lens applies, as there are impacts on small businesses associated with the proposed Regulations. A small business is any business, including its affiliates, that has fewer than 100 employees or between $30,000 and $5 million in annual gross revenues.^{footnote 6}

Approximately 3 600 federally regulated private-sector employers, employing a total of approximately 88 500 employees, employ more than 10 and fewer than 100 employees.^{footnote 7} Assuming both percentages of small business employers and employees are unchanged for the period between 2020 and 2029, and applying them to costs previously estimated, the total compliance and administrative costs in present value to small businesses for this 10-year timeframe are approximately $100.6M or an annualized cost of $14.3M (in present value terms). Of the 10-year amount, costs not associated with pay adjustments will be $2.3M, and pay adjustments, $98.3M. The latter will involve annual costs of between $11.2M and $17.4M in years when pay adjustments are owed (in present value terms).^{footnote 8} These payouts are both a cost to employers and a benefit for the employees that receive them. To help reduce the burden on small businesses, the Act provides some flexibility in that it allows small businesses to phase in pay equity increases over a longer period than employers with 100 or more employees. Additionally, costs to small business will be offset by the availability of guidance and other educational materials prepared by the Pay Equity Commissioner that will help small to medium sized businesses complete and update pay equity plans.

Small business lens summary

• Number of small businesses impacted: 3 584
• Number of years: 10
• Base price Year for costing: 2019
• Present value base year: 2020
• Discount rate: 7%

Table 5: Small business costs

Cost Category	Annualized Value	Present Value
Total compliance cost	$14.3M	$100.5M
Total administrative cost	$6,700	$46,800
Total cost (all impacted small businesses)	$14.3M	$100.6M
Cost per impacted small business	$3,995	$28,062

One-for-one rule

Both Element A and Element B of the one-for-one rule apply, since there is an incremental increase in the administrative burden on business, and a new regulatory title is being introduced. The proposed Regulations would impose additional administrative requirements on employers stemming from the requirement to issue a notice to the Pay Equity Commissioner in the event of voluntarily forming a pay-equity committee. Using the methodology developed in the Red Tape Reduction Regulations, it is estimated that the annualized additional administrative burden imposed on affected federally regulated employers will be $35,996 (present value, $2012, 7% discount rate) for the 10-year period (2020–2029). The annualized administrative burden cost per business is $1.18. The new regulatory title introduced is the proposed Pay Equity Regulations.

Regulatory cooperation and alignment

This regulatory initiative is not part of a formal bilateral agreement.

When researching and conceptualizing the Pay Equity Act, the Labour Program conducted an environmental scan and analysis of different pay equity laws and regimes. Ultimately, the pay equity regimes of the provinces of Ontario and Quebec were identified as models that would serve as the basis for the development of the federal pay equity regime. The Pay Equity Act was broadly developed using aspects from both of those provincial regimes and then adapted to fit and serve the federal jurisdiction.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

The new proactive pay equity regime aims to close the portion of the gender wage gap that is due to systemic gender-based discrimination in compensation against employees in predominantly female, or traditionally female, occupations. A departmental gender-based analysis plus (GBA+) assessment conducted for this proposal in relation to the Act suggests that this new regime will primarily benefit women workers in federally regulated workplaces. More specifically, research indicates that racialized women (including visible minority, immigrant and Indigenous women),^{footnote 9} women with disabilities,^{footnote 10} and women with lower levels of education^{footnote 11} are likely to disproportionately benefit from proactive pay equity, as they tend to face larger wage gaps and be concentrated in occupations traditionally occupied by women.

In addition, proactive pay equity is expected to benefit men, LGBTQ2 and gender-nonconforming people employed in predominantly female job classes, as they would receive the same pay equity adjustments as women employed in these job classes.

No distinct GBA+ impacts have been identified for any of the individual regulations being proposed. Rather, as the proposed Regulations build upon and complement the proactive pay equity requirements set out in the Act, it is expected that this proposal will contribute to the GBA+ impacts identified for the new regime as a whole.

For example, by introducing provisions that set out methods for establishing and maintaining a pay equity plan in workplaces without predominantly male job classes, the proposed Regulations would extend the benefits of proactive pay equity to women in workplaces and sectors that are predominantly female and that would not currently benefit from pay equity under a complaint-based regime.

Implementation, compliance and enforcement, and service standards

Implementation

The proposed Regulations would come into force on the same day the Act is brought into force or upon registration, whichever is later, all of which is expected later in 2021.

At the same time, the Act and the proposed Regulations are to be brought into force, an Order in Council will also be made to bring section 417 of the Budget Implementation Act, 2018, No. 2, into force. This provision will replace subsection 41(2) of the Act and allow all public and private sector employers and pay equity committees established by those employers to use predetermined values.

The Commissioner housed in the CHRC will be responsible for administering and enforcing the Act and its regulations. A full-time member of the CHRC was appointed on October 16, 2019, and will become the Pay Equity Commissioner effective the day the legislation comes into force. The Commissioner will play a key role by assisting workplace parties in understanding their rights and fulfilling their obligations, including through the development of tools and education materials, investigating complaints and considering applications, and facilitating the resolution of disputes.

The Treasury Board Secretariat of Canada would be responsible for addressing any pay equity gaps identified in the pay equity plans for the core public administration and the RCMP, which covers approximately 250 000 public servants across 17 bargaining agents.

Compliance and enforcement

The Commissioner will be responsible for the compliance and enforcement of the Act and its regulations. The Act provides the Commissioner with a broad range of enforcement tools, from investigations to proactive audits, order-making powers and administrative monetary penalties (AMPS). Regulations required for the AMPS regime to be operational are expected to be introduced through a separate regulatory package. Orders and decisions of the Pay Equity Commissioner will be subject to an administrative review process or appeals to the Canadian Human Rights Tribunal.

Contact

Lori Straznicky
Executive Director
Special Projects
Labour Program
Email: ESDC.PayEquity-EquiteSalariale.EDSC@labour-travail.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 181(1) of the Pay Equity Act^{footnote a}, proposes to make the annexed Pay Equity Regulations.

Interested persons may make representations concerning the proposed Regulations within 60 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Lori Straznicky, Executive Director, Special Projects, Labour Program, Department of Employment and Social Development, Place du Portage, Phase II, 9th floor, 165 de l’Hôtel-de-Ville Street, Gatineau, Quebec K1A 0J2 (tel: 819‑654‑2298, email: ESDC.PayEquity-EquiteSalariale.EDSC@labour-travail.gc.ca).

Ottawa, November 5, 2020

Julie Adair
Assistant Clerk of the Privy Council

TABLE OF PROVISIONS

Pay Equity Regulations

Interpretation

1 Definitions

2 References to employers

Postings — General Rules

3 Format and place

4 Accessibility

5 Information to be provided

6 Date of posting

Pay Equity Plan

7 Notice — employer’s obligation

8 Notice — group of employers’ obligation

9 Notice — employer

10 Notice — group of employers

11 Approval — employer

12 Approval — group of employers

13 Notice — establishment of plan without committee

Process for Establishment of Pay Equity Plan

Frozen Compensation

14 Prohibited comparison

Factors

15 Calculation — equal average method

16 Calculation — equal line method

17 Clarification

Rules if Regression Lines Cross

18 Choice of method

19 Segmented line method

20 Sum of differences method

21 Clarification

Obligations — No Predominantly Male Job Classes

22 Application

23 Choice of method

24 Determination of value of work

25 Criterion

26 Method

27 Calculation of compensation

28 Exclusions from compensation

29 Differences in compensation excluded

30 Comparison of compensation

31 Compensation comparison methods

32 Equal average method

33 Equal line method

Additional Information in Pay Equity Plan

34 Job classes chosen or created

Confidentiality

35 Confidentiality of data received from another employer

Posting and Application for Authorization for Longer Phase-In Period

36 Draft pay equity plan

37 Authorization for longer phase-in period

38 Final version of pay equity plan

39 Notice — increases and phase-in period

Pay Equity Maintenance Review

Updated Pay Equity Plan

40 Notice — employer’s obligation

41 Notice — group of employers’ obligation

42 Notice — employer

43 Notice — group of employers

44 Notice — update of plan without committee

Process for Updating Pay Equity Plan

45 Workplace information

46 Excluded changes

47 Use of workplace information

48 Job class with greatest number of employees

49 Job classes not treated as part of group

50 Calculation of compensation

51 Prohibited comparison

52 Difference in compensation during the last period

Posting

53 Postings regarding updating

54 Final version of revised pay equity plan

55 Notice — increases

56 Determination by member or panel

57 Decision or document issued by Pay Equity Commissioner

Lump Sum

58 Entitlement

Transfers

59 Final version of pay equity plan

Coming into Force

60 S.C. 2018, c. 27, s. 416

SCHEDULE

Pay Equity Regulations

Interpretation

Definitions

1 The following definitions apply in these Regulations.

Act

means the Pay Equity Act. (Loi)

active,

in respect of compensation associated with a job class, means not frozen. (active)

band

means a range, as determined by an employer or pay equity committee, as the case may be, of values of work that the employer or committee considers comparable. (bande)

frozen,

in respect of compensation associated with a job class, means that the compensation includes

• (a) salary at a rate that is continued in force under section 107 of the Federal Public Sector Labour Relations Act; or
• (b) salary at a rate that
  • (i) under section 56 of the Federal Public Sector Labour Relations Act, cannot be altered except under a collective agreement or with the consent of the Federal Public Sector Labour Relations and Employment Board,
  • (ii) under subsection 24(4) of the Canada Labour Code, cannot be altered except pursuant to a collective agreement or with the consent of the Canada Industrial Relations Board, or
  • (iii) under paragraph 50(b) of the Canada Labour Code, cannot be altered without the consent of the bargaining agent. (gelée)

References to employers

2 If a group of employers is recognized by the Pay Equity Commissioner as a single employer under section 106 of the Act, every reference in subsections 14(1) and (3), sections 18 and 19, subsection 20(1), sections 22 to 24 and 26, subsections 27(1) to (6), sections 28 to 30, subsection 31(2), sections 32 to 34, 45 and 47 to 50, subsection 51(1) and section 52 to an employer is, in respect of the group of employers, to be read as a reference to that group of employers, unless the context otherwise requires.

Postings — General Rules

Format and place

3 A document that is required under the Act to be posted must be posted in printed or electronic form and in such a way as to be readily available to all employees to whom the document relates. A document in printed format must be posted in a conspicuous place.

Accessibility

4 If an employee to whom a document that is required to be posted under the Act relates has a disability as defined in section 2 of the Accessible Canada Act, that document must be posted in a form that is accessible to that employee.

Information to be provided

5 An employer that posts in electronic form a document that it is required to post under the Act must provide the employees to whom the document relates with any information necessary to enable them to access the document.

Date of posting

6 An employer that makes any posting under the Act must indicate in the posting the date on which the posting is made.

Pay Equity Plan

Notice — employer’s obligation

7 (1) An employer that is required to post a notice under subsection 14(1) or (2) of the Act must do so as soon as feasible after it becomes subject to the Act.

Duration of posting

(2) The employer must keep the notice posted until the final version of the pay equity plan is posted in accordance with subsection 55(1) or paragraph 57(2)(b) or 94(1)(b) of the Act or a notice under subsection 15(1) or (2) of the Act is posted.

Notice — group of employers’ obligation

8 (1) An employer that is in a group of employers and that is required to post a notice under subsection 15(1) or (2) of the Act must do so as soon as feasible after the group of employers becomes subject to the Act.

Duration of posting

(2) The employer must keep the notice posted until each employer in the group of employers posts the final version of the pay equity plan in accordance with subsection 55(1) or paragraph 57(2)(b) or 94(1)(b) of the Act or until the employer posts a notice under subsection 14(1) or (2) of the Act.

Notice — employer

9 A notice submitted under subsection 16(3) of the Act by an employer of the voluntary establishment of a pay equity committee must be submitted no later than 60 days after the day on which the employer posted a notice under subsection 14(2) of the Act.

Notice — group of employers

10 A notice submitted under subsection 17(3) of the Act by a group of employers of the voluntary establishment of a pay equity committee must be submitted no later than 60 days after the day on which the employers in the group posted a notice under subsection 15(2) of the Act or, if the employers in the group did not post the notice on the same day, no later than 60 days after the earliest day on which any employer that is in the group posted the notice.

Approval — employer

11 An application under subsection 30(1) of the Act for approval to establish more than one pay equity plan must be submitted no later than 12 months after the day on which the relevant employer becomes subject to the Act.

Approval — group of employers

12 An application under subsection 30(2) of the Act for approval to establish more than one pay equity plan must be submitted no later than 12 months after the day on which the relevant group of employers becomes subject to the Act.

Notice — establishment of plan without committee

13 (1) An employer that is required to post a notice under section 25, 26, 28 or 29 of the Act of the establishment of a pay equity plan without a pay equity committee must do so as soon as feasible after the Pay Equity Commissioner approves the establishment of the plan without a committee.

Duration of posting

(2) The employer must keep the notice posted until the final version of the pay equity plan is posted in accordance with subsection 55(1) or paragraph 57(2)(b) or 94(1)(b) of the Act.

Process for Establishment of Pay Equity Plan

Frozen Compensation

Prohibited comparison

14 (1) In carrying out the comparison of compensation under sections 47 to 50 of the Act, an employer — or, if a pay equity committee has been established, that committee — must ensure, subject to subsections (2) to (6), that no comparison is made between frozen compensation associated with a predominantly female or predominantly male job class and active compensation associated with a predominantly female or predominantly male job class in which unionized employees occupy positions.

Replacement salary rate

(2) Subject to subsections (4) and (5), if the compensation associated with a predominantly female or predominantly male job class is frozen, the rate to be used for the purpose of determining salary in the calculation of the compensation associated with a job class is the salary rate from the most recent year in which the compensation associated with 50% or fewer of the job classes identified under subsection (3) was frozen, and the positions in those job classes respecting which the compensation was frozen were occupied by 50% or fewer of the employees who occupied positions in the job classes identified under subsection (3).

Job classes

(3) If subsection (2) applies, the employer or pay equity committee, as the case may be, must identify, in accordance with sections 32 to 34 of the Act, the job classes that existed in the relevant most recent year and to which the pay equity plan for which the compensation is being calculated applies.

Exception

(4) If, in the circumstances referred to in subsection (2), the compensation associated with a job class identified under subsection (3) was frozen in the most recent year referred to in subsection (2), the rate to be used for the purposes of determining salary in the calculation of the compensation associated with that job class is the rate obtained by adding, to the highest salary rate in the range of salary rates for positions in that job class in that year the product obtained by multiplying

• (a) the salary at the highest rate in the range of salary rates for positions in that job class in that year; by
• (b) the average percentage by which, since the compensation associated with the job class became frozen, the salary for positions in the job classes identified under subsection (3) that contain positions occupied by unionized employees governed by a collective agreement that is not expired has increased.

Calculation of salary rate

(5) If the compensation associated with 50% or fewer of the predominantly female job classes and predominantly male job classes in respect of which the pay equity plan applies is frozen, and the employees occupying positions in the job classes respecting which the compensation is frozen account for 50% or fewer of the employees in respect of whom the pay equity plan is established, the rate to be used for the purpose of determining salary in the calculation of the compensation associated with a job class whose compensation is frozen is the salary rate obtained by adding, to the highest salary rate in the range of salary rates for positions in that job class, the product obtained by multiplying

• (a) the salary at the highest rate in the range of salary rates for positions in the job class ;by
• (b) the average percentage by which, since the compensation associated with the job class became frozen, the salary for positions in job classes that contain positions occupied by unionized employees in respect of whom the pay equity plan applies and who are governed by a collective agreement that is not expired has increased.

Other method

(6) If a pay equity committee has been established and the compensation associated with a predominantly female or predominantly male job class is frozen, the committee may, instead of using a method set out in subsection (2), (4) or (5), use a method of its choice to calculate salary rates to be used to determine salary, provided that that method minimizes, to the extent possible, the differences in compensation that result from the compensation associated with a job class being frozen.

Factors

Calculation — equal average method

15 (1) The factor referred to in paragraph 49(1)(d) of the Act and the factor referred to in paragraph 32(d) are determined by the formula

((A × B) − C) ÷ D

where

A

is the number of predominantly female job classes within the band;

B

is,

• (a) if there is more than one predominantly male job class within the band, the average compensation associated with the predominantly male job classes within the band,
• (b) if there is only one predominantly male job class within the band, the compensation associated with that job class, or
• (c) if there are no predominantly male job classes within the band, the compensation calculated under paragraph 49(1)(b) of the Act;

C

is the sum of the compensation associated with the predominantly female job classes within the band; and

D

is the sum of the differences, for each predominantly female job class within the band whose compensation is less than the value determined for B in this formula, between the value of B and the compensation associated with the job class.

Clarification

(2) In the calculation of the factor referred to in paragraph 32(d), references in subsection (1) to a predominantly male job class are to be read as references to a predominantly male job class chosen or created, as the case may be, under subsection 23(1).

Calculation — equal line method

16 (1) With respect to a predominantly female job class, the factor referred to in paragraph 50(1)(c) of the Act and the factor referred to in paragraph 33(1)(c) are determined by the formula

((A × B) ÷ C) + (D – (E × B))

where

A

is determined by the formula

F ÷ G

where

F

is the absolute value of the difference between the compensation associated with the predominantly female job class and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class, and

G

is the compensation associated with such a predominantly male job class;

B

is determined by the formula

((H − I) − (J × K)) ÷ (L − (M × K))

where

H

is the sum of the products obtained by multiplying, for each predominantly female job class, the value of work performed in the job class by the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class,

I

is the sum of the products obtained by multiplying, for each predominantly female job class, the value of work performed in the job class by the compensation associated with that job class,

J

is determined by the formula

(N − O) ÷ P

where

N

is the sum of the compensation associated with predominantly male job classes, were such job classes located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job classes,

O

is the sum of the compensation associated with the predominantly female job classes, and

P

is the sum of the absolute values of the differences, for each predominantly female job class that is located below the male regression line, between the compensation associated with the job class and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class;

K

is the sum of the products obtained by multiplying, for each predominantly female job class that is located below the male regression line, the value of the work performed in the job class by the absolute value of the difference between the compensation associated with the job class and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class,

L

is the sum of the products obtained by multiplying, for each predominantly female job class that is located below the male regression line, the value of the work performed in that job class by the quotient calculated for the job class using the formula set out in A in this subsection,

M

is the quotient obtained by dividing the sum of the results calculated, for each predominantly female job class that is located below the male regression line, using the formula set out in A in this subsection by the sum of the absolute values of the differences between the compensation associated with each of those job classes and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class,

C

is an amount equal to the difference referred to in paragraph 50(1)(c) of the Act;

D

is the value determined for J in this subsection; and

E

is the value determined for M in this subsection.

Job class chosen or created

(2) In the calculation of the factor referred to in paragraph 33(1)(c), a reference in subsection (1) to a predominantly male job class is to be read as a reference to a predominantly male job class chosen or created, as the case may be, under subsection 23(1).

Clarification

17 The factors referred to in sections 15 and 16 must be calculated without regard either to the number of employees or to the number of positions in a job class.

Rules if Regression Lines Cross

Choice of method

18 For the purposes of subsection 50(2) of the Act, the following rules apply:

• (a) an employer — or, if a pay equity committee has been established, that committee — must apply the rules set out in paragraphs 50(1)(b) to (d) of the Act, without taking into account subparagraph 50(1)(b)(i); and
• (b) if the regression lines do not coincide without reducing the compensation associated with any job class when the rules set out in paragraph (a) are applied, the employer or pay equity committee, as the case may be, must instead compare the compensation using :
  • (i) the equal average method set out in section 49 of the Act,
  • (ii) the segmented line method set out in section 19, or
  • (iii) the sum of differences method set out in section 20.

Segmented line method

19 An employer or pay equity committee, as the case may be, that uses the segmented line method must apply the following rules:

• (a) the employer or pay equity committee must divide the predominantly female job classes and the predominantly male job classes into
  • (i) one segment that includes the job classes in which the value of work performed is less than the value at which the regression lines established under paragraph 50(1)(a) of the Act intersect, and
  • (ii) one segment that includes the job classes in which the value of work performed is equal to or greater than the value at which the regression lines established under that paragraph intersect;
• (b) for each segment, the employer or pay equity committee must establish a female regression line for the predominantly female job classes in the segment and a male regression line for the predominantly male job classes in the segment;
• (c) in a segment in which the female regression line is entirely below the male regression line, the employer or pay equity committee must apply the rules set out in paragraphs 50(1)(b) to (d) of the Act, and if the application of those rules does not cause the male and female regression lines to coincide without reducing the compensation associated with any job class, the employer or committee must use the equal average method set out in section 49 of the Act or the sum of differences method set out in section 20 to compare the compensation associated with all predominantly female job classes and predominantly male job classes; and
• (d) in a segment in which the female regression line crosses the male regression line, the employer or committee must apply the rules set out in paragraphs 50(1)(b) to (d) of the Act, without taking into account subparagraph 50(1)(b)(i), and, if the application of those rules does not cause the male and female regression lines to coincide without reducing the compensation associated with any job class, the employer or committee must use the equal average method set out in section 49 of the Act or the sum of differences method set out in section 20 to compare the compensation associated with all predominantly female job classes and predominantly male job classes.

Sum of differences method

20 (1) The employer or pay equity committee, as the case may be, that uses the sum of differences method must multiply, for each predominantly female job class that is located below the male regression line established under paragraph 50(1)(a) of the Act, the factor calculated in accordance with subsection (2) by the absolute value of the difference between the compensation associated with the predominantly female job class and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class.

Factor

(2) For the purposes of subsection (1), the factor is the result of the formula

(A − B) ÷ C

where

A

is the sum of the compensation associated with predominantly male job classes, were such job classes located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job classes;

B

is the sum of the compensation associated with the predominantly female job classes or the value determined for A, whichever is less; and

C

is the sum of the absolute values of the differences, for each predominantly female job class that is located below the male regression line, between the compensation associated with the job class and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class.

Increase in compensation

(3) The increase in compensation associated with a predominantly female job class located below the male regression line is the product calculated in accordance with subsection (1) in respect of that job class.

Clarification

21 The segmented line method set out in section 19 and the sum of differences method set out in section 20 are to be applied without regard either to the number of employees or to the number of positions in a job class.

Obligations — No Predominantly Male Job Classes

Application

22 Sections 23 to 33 apply with respect to an employer — or, if a pay equity committee has been established, that committee — for the determination of differences in compensation for the purposes of section 60 of the Act, if the employer or committee, as the case may be, has determined that there are no predominantly male job classes.

Choice of method

23 (1) An employer — or, if a pay equity committee has been established, that committee — must use, to determine differences in compensation for the purposes of section 60 of the Act

• (a) at least three predominantly male job classes of its choice from another employer that meets the conditions set out in subsection (2); or
• (b) three fictional predominantly male job classes, each of which is created based on a different typical job class set out in the schedule.

Other employer

(2) For the purposes of paragraph (1)(a), the other employer must meet the following conditions:

• (a) it must have at least three job classes that it — or, if a pay equity committee has been established by the other employer, that committee — has determined under section 35 of the Act to be predominantly male and for which the compensation has been calculated in accordance with section 44 of the Act; and
• (b) it must agree to provide the employer — or, if a pay equity committee has been established by that employer, that committee — that has chosen to use those job classes with the data in its possession that are necessary to determine the value of work performed in those job classes and, for each job class chosen, with the salary at the highest rate in the range of salary rates for positions in the job class.

Criteria

(3) An employer — or, if a pay equity committee has been established, that committee — choosing job classes provided by another employer under paragraph (1)(a) must, to the extent possible, ensure that those job classes

• (a) come from an employer with characteristics similar to its own — or, in the case of a pay equity committee choosing job classes, those of the relevant employer — such as the following:
  • (i) the two employers are part of the same industry,
  • (ii) they operate in regions where the cost of living is similar,
  • (iii) they have a similar number of employees,
  • (iv) they have a similar proportion of unionized employees, and
  • (v) they have similar compensation practices; and
• (b) are representative of the range of values of work performed in the job classes of that other employer, as determined by the other employer or the pay equity committee established by that employer, as the case may be, under section 41 of the Act.

Determination of value of work

24 (1) An employer — or, if a pay equity committee has been established, that committee — must determine the value of the work performed in each predominantly female job class determined under section 35 of the Act and in each predominantly male job class chosen or created under subsection 23(1). The value of the work performed in those predominantly male job classes is to be determined as if the work were performed in the course of the operations of the employer.

Value already determined

(2) For greater certainty, an employer or a pay equity committee, as the case may be, may determine that the value of the work performed in each of the predominantly female job classes determined under section 35 of the Act is the value that has already been determined by means of a method that complies with the requirements set out in sections 25 and 26.

Group of job classes

(3) If an employer or a pay equity committee, as the case may be, treats a group of job classes as a predominantly female job class in accordance with section 38 of the Act, the value of the work performed in that job class is considered to be the value of the work performed in the individual predominantly female job class within the group that has the greatest number of employees.

Criterion

25 The criterion to be applied in determining the value of the work performed is the composite of the skill required to perform the work, the effort required to perform the work, the responsibility required in the performance of the work and the conditions under which the work is performed.

Method

26 In addition, an employer — or, if a pay equity committee has been established, that committee — must, to determine the value of the work performed, use a method that

• (a) does not discriminate on the basis of gender; and
• (b) makes it possible to determine the relative value of the work performed in all of the predominantly female job classes determined under section 35 of the Act and in all of the predominantly male job classes chosen or created under subsection 23(1).

Calculation of compensation

27 (1) The employer — or, if a pay equity committee has been established, that committee — must calculate the compensation, expressed in dollars per hour, associated with each job class for which it has determined, under section 24, the value of the work performed.

Compensation plan — job classes chosen

(2) If the employer or pay equity committee, as the case may be, uses predominantly male job classes chosen under paragraph 23(1)(a), it must make any adaptations necessary in the calculation of any form of compensation other than salary so that the compensation associated with those predominantly male job classes is in accordance with the compensation plan that applies to the employees of the employer.

Compensation — job classes created

(3) If the employer or pay equity committee, as the case may be, uses predominantly male job classes created under paragraph 23(1)(b), it must calculate, for each of those job classes, the compensation for full-time work, expressed in dollars per hour, associated with the job class,

• (a) taking into account
  • (i) the elements set out in columns 2 to 5 of the schedule for the typical job class on which the job class that was created is based, and
  • (ii) salaries that are generally accepted as current for positions that have duties and responsibilities similar to those set out for the typical job class on which the job class that was created is based, that require experience, education and training similar to those set out in the schedule for that typical job class and that are under employers that, to the extent possible, have similar numbers of employees as the employer and are in the same industry and geographic area as the employer or a geographic area where the cost of living is similar;
• (b) ensuring that the hourly rate of pay for the job class is not less than
  • (i) in the case of a job class that was created based on the maintenance worker typical job class described in item 1 of the schedule, the minimum hourly rate that is generally applicable, regardless of occupation, status or work experience, under the law of the province where the work of that job class would be done or, if the work would be done in more than one province, the highest of those minimum hourly rates,
  • (ii) in the case of a job class that was created based on the technician typical job class described in item 2 of the schedule, 2.5 times the minimum hourly rate referred to in subparagraph (i), and
  • (iii) in the case of a job class that was created based on the manager typical job class described in item 3 of the schedule, 3.33 times the minimum hourly rate referred to in subparagraph (i); and
• (c) including all forms of compensation other than salary that the employer would pay for the work performed in the job class if the work were performed in the course of the operations of the employer.

Group of job classes

(4) If an employer or a pay equity committee, as the case may be, treats a group of job classes as a predominantly female job class in accordance with section 38 of the Act, the compensation associated with that job class is considered to be the compensation associated with the individual predominantly female job class within the group that has the greatest number of employees.

Salary — job classes chosen

(5) If an employer or pay equity committee, as the case may be, uses predominantly male job classes chosen under paragraph 23(1)(a),

• (a) for the purpose of determining salary in the calculation of the compensation associated with a predominantly female job class, the salary at the highest rate in the range of salary rates for positions in the job class is to be used; and
• (b) for the purpose of determining salary in the calculation of the compensation associated with a predominantly male job class, the salary at the highest rate in the range of salary rates for positions in the job class, provided by the employer from which the job class was chosen, is to be used.

Salary — job classes created

(6) If an employer or pay equity committee, as the case may be, uses predominantly male job classes created under paragraph 23(1)(b), for the purposes of determining salary in the calculation of the compensation associated with a predominantly female job class, the salary at the highest rate in the range of salary rates for positions in the job class is to be used.

Definition of full-time work

(7) For the purposes of subsection (3), full-time work means 30 or more hours of work over a period of one week.

Exclusions from compensation

28 An employer — or, if a pay equity committee has been established, that committee — may exclude from the calculation of compensation, with respect to each job class in respect of which compensation is required to be calculated, any form of compensation that is equally available, and provided without discrimination on the basis of gender, in respect of all of those job classes.

Differences in compensation excluded

29 An employer — or, if a pay equity committee has been established, that committee — must exclude from the calculation of compensation associated with a predominantly female job class any differences in compensation that either increase or decrease compensation in any or all positions in that job class as compared with the compensation that would otherwise be associated with the position, if the differences are based on any one or more of the following factors and those factors have been designed and are applied so as not to discriminate on the basis of gender:

• (a) the existence of a system of compensation that is based on seniority or length of service;
• (b) the practice of temporarily maintaining an employee’s compensation following their reclassification or demotion to a position that has a lower rate of compensation until the rate of compensation for the position is equivalent to or greater than the rate of compensation payable to the employee immediately before the reclassification or demotion;
• (c) a shortage of skilled workers that causes an employer to temporarily increase compensation due to its difficulty in recruiting or retaining employees with the requisite skills for positions in a job class;
• (d) the geographic area in which an employee works;
• (e) the fact that an employee is in an employee development or training program and receives compensation at a rate different than that of an employee doing the same work in a position outside the program;
• (f) the non-receipt of compensation — in the form of benefits that have a monetary value — due to the temporary, casual or seasonal nature of a position;
• (g) the existence of a merit-based compensation plan that is based on a system of formal performance ratings and that has been brought to the attention of the employees; or
• (h) the provision of compensation for extra-duty services, including compensation for overtime, shift work, being on call, being called back to work and working or travelling on a day that is not a working day.

Comparison of compensation

30 An employer — or, if a pay equity committee has been established, that committee — that has calculated under section 27 the compensation associated with each job class must, using the compensation so calculated, compare, in accordance with sections 31 to 33, the compensation associated with the predominantly female job classes with the compensation associated with the predominantly male job classes chosen or created under subsection 23(1), for the purpose of determining whether there is any difference in compensation between those job classes.

Compensation comparison methods

31 (1) The comparison of compensation must be made in accordance with the equal average method set out in section 32 or the equal line method set out in section 33.

Other methods

(2) Despite subsection (1),

• (a) if an employer is of the opinion that neither of the methods referred to in that subsection can be used, the employer must
  • (i) apply to the Pay Equity Commissioner for authorization to use another method for the comparison of compensation that it proposes, and
  • (ii) use the method for the comparison of compensation that the Pay Equity Commissioner authorizes; and
• (b) if a pay equity committee is of the opinion that neither of the methods referred to in that subsection can be used, the committee must use a method for the comparison of compensation that it considers appropriate.

Equal average method

32 An employer or pay equity committee, as the case may be, that uses the equal average method of comparison of compensation must apply the following rules:

• (a) the average compensation associated with the predominantly female job classes within a band — or, if there is only one such job class within a band, the compensation associated with that job class — is to be compared to
  • (i) if there is more than one predominantly male job class chosen or created under subsection 23(1) within the band, the average compensation associated with those predominantly male job classes within the band,
  • (ii) if there is only one predominantly male job class chosen or created under subsection 23(1) within the band, the compensation associated with that job class, or
  • (iii) if there are no predominantly male job classes chosen or created under subsection 23(1) within the band, the compensation calculated under paragraph (b);
  • (b) the compensation for the purpose of subparagraph (a)(iii) is the following:
    • (i) the amount determined by the formula

      (A × B) ÷ C

      where

      A

      is the average compensation associated with the predominantly male job classes chosen or created under subsection 23(1) — or, if there is only one such job class, the compensation associated with that job class — that are within the band that is closest to the band within which the predominantly female job class or classes are located,

      B

      is the average value of the work performed in the predominantly female job classes within the band or, if there is only one such job class, the value of the work performed in that job class, and

      C

      is the average value of the work performed in the predominantly male job classes within the band referred to in the description of A or, if there is only one such job class, the value of the work performed in that job class, or

    • (ii) despite subparagraph (i), if there is at least one predominantly male job class chosen or created under subsection 23(1) within each of two bands that are equidistant from the band within which the predominantly female job class or classes are located, and there is no other band containing at least one predominantly male job class that is closer to that band, the amount determined by the formula

      (A + B) ÷ 2

      where

      A

      is the average compensation associated with the predominantly male job classes chosen or created under subsection 23(1) within one of the two bands or, if there is only one such job class, the compensation associated with that job class, and

      B

      is the average compensation associated with the predominantly male job classes chosen or created under subsection 23(1) within the other band or, if there is only one such job class, the compensation associated with that job class;

  • (c) the compensation associated with a predominantly female job class within a band is to be increased only if
    • (i) that compensation is lower than the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be, and
    • (ii) the average compensation associated with the predominantly female job classes within the band — or, if there is only one such job class, the compensation associated with that job class — is lower than the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be;
  • (d) if the compensation associated with a predominantly female job class within a band is to be increased, the increase is to be determined by multiplying the factor calculated in accordance with section 15 by an amount equal to the difference between the compensation associated with the job class and the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be; and
  • (e) an increase in compensation associated with the predominantly female job class or classes within a band is to be made in such a way that, after the increase, the average compensation associated with the predominantly female job classes within the band — or, if there is only one such job class, the compensation associated with that job class — is equal to the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be.

Equal line method

33 (1) An employer or pay equity committee, as the case may be, that uses the equal line method of comparison of compensation must apply the following rules:

• (a) a female regression line must be established for the predominantly female job classes and a male regression line must be established for the predominantly male job classes chosen or created under subsection 23(1);
• (b) the compensation associated with a predominantly female job class is to be increased only if
  • (i) the female regression line is entirely below the male regression line, and
  • (ii) the predominantly female job class is located below the male regression line;
• (c) if the compensation associated with a predominantly female job class is to be increased, the increase is to be determined by multiplying the factor calculated in accordance with section 16 by an amount equal to the difference between the compensation associated with the predominantly female job class and the compensation associated with a predominantly male job class chosen or created under subsection 23(1), were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class; and
• (d) an increase in compensation associated with the predominantly female job classes is to be made in such a way that, after the increase, the female regression line coincides with the male regression line.

Crossed regression lines

(2) Despite paragraphs (1)(b) to (d), if the female regression line crosses the male regression line, an employer or pay equity committee, as the case may be, must apply the equal average method set out in section 32 for the comparison of compensation.

Additional Information in Pay Equity Plan

Job classes chosen or created

34 If an employer — or, if a pay equity committee has been established, that committee — has determined under section 35 of the Act that there is no predominantly male job class, the pay equity plan must indicate whether the predominantly male job classes used to determine differences in compensation for the purposes of section 60 of the Act were those referred to in paragraph 23(1)(a) or those referred to in paragraph 23(1)(b) and, if job classes referred to in paragraph 23(1)(a) were used, indicate the predominantly male job classes that were chosen and the other employer that provided the data about those job classes.

Confidentiality

Confidentiality of data received from another employer

35 (1) Except to identify differences in compensation for the purposes of section 60 of the Act and to comply with section 34, an employer and each member of a pay equity committee that is, directly or indirectly, provided with data from another employer for the purpose of the identification of those differences must keep that data confidential.

Bargaining agent

(2) A bargaining agent that receives, from a member of a pay equity committee, data that the member is required under subsection (1) to keep confidential must also keep the data confidential.

Posting and Application for Authorization for Longer Phase-In Period

Draft pay equity plan

36 An employer that is required under section 52 or 53 of the Act to post a draft pay equity plan and a notice must post those documents on the same day and keep them posted for at least 60 days and, if they are posted in paper form, post them close together.

Authorization for longer phase-in period

37 An application by an employer under subsection 63(1) of the Act for authorization to phase in increases in compensation over a longer period must be submitted no later than the day before the day on which the employer posts the notice concerning the increases under subsection 56(1) of the Act.

Final version of pay equity plan

38 An employer that is required in accordance with subsection 55(1) or paragraph 57(2)(b) of the Act to post the final version of the pay equity plan must keep that plan posted until it posts the final version of the revised pay equity plan in accordance with section 83 or paragraph 85(2)(b) of the Act.

Notice — increases and phase-in period

39 An employer that is required to post a notice in accordance with subsection 56(1) of the Act relating to increases or a notice in accordance with subsection 56(2) of the Act for a longer phase-in period must keep that notice posted until the later of the 60th day after the day on which it is posted and the day on which the increases to which the notice relates are paid in full.

Pay Equity Maintenance Review

Updated Pay Equity Plan

Notice — employer’s obligation

40 (1) An employer that is required to post a notice under subsection 65(1) or (2) of the Act must do so as soon as feasible after the last day on which workplace information is collected under section 45 in respect of the pay equity plan being updated.

Duration of posting

(2) The employer must keep the notice posted until the final version of the revised pay equity plan in accordance with section 83 or paragraph 85(2)(b) of the Act or a notice is posted in accordance with subsection 66(1) or (2) of the Act.

Notice — group of employers’ obligation

41 (1) An employer that is required to post a notice in accordance with subsection 66(1) or (2) of the Act must do so as soon as feasible after the last day on which workplace information is collected under section 45 in respect of the pay equity plan being updated.

Duration of posting

(2) The employer must keep the notice posted until the final version of the revised pay equity plan in accordance with section 83 or paragraph 85(2)(b) of the Act or a notice under subsection 65(1) or (2) of the Act is posted.

Notice — employer

42 A notice submitted under subsection 67(3) of the Act by an employer concerning the voluntary establishment of a pay equity committee must be submitted no later than 60 days after the day on which the employer posted a notice under subsection 65(2) of the Act.

Notice — group of employers

43 A notice submitted under subsection 68(3) of the Act by a group of employers concerning the voluntary establishment by the group of employers of a pay equity committee must be submitted no later than 60 days after the day on which a notice under subsection 66(2) of the Act was posted.

Notice — update of plan without committee

44 (1) An employer that is required to post a notice under section 73, 74, 76 or 77 of the Act that the pay equity plan will be updated without a pay equity committee must do so as soon as feasible after the Pay Equity Commissioner authorizes the updating of the plan without a committee.

Duration of posting

(2) The employer must keep the notice posted until the final version of the revised pay equity plan is posted under section 83 or paragraph 85(2)(b) of the Act.

Process for Updating Pay Equity Plan

Workplace information

45 (1) To identify any differences in compensation under subsection 78(1) of the Act, an employer — or, if a pay equity committee has been established, that committee — must collect, on each of the applicable days set out in subsections (2) and (3) that falls during the period beginning on the day on which the most recent pay equity plan is posted and ending on the day before the day on which the revised pay equity plan is posted under section 80 or 81 of the Act, information about the workplace of the employer that is necessary to identify changes — other than changes excluded under section 46 — that are likely to have had an impact on pay equity since the later of:

• (a) the day on which the most recent pay equity plan was posted, and
• (b) the most recent day on which information was collected under this subsection.

Days to collect information

(2) Subject to subsection (3), the information must be collected on the following days:

• (a) in the case of an employer referred to in any of paragraphs 3(2)(a) to (d) of the Act, on March 31 of each year; and
• (b) in the case of an employer referred to in any of paragraphs 3(2)(e) to (i) of the Act, on December 31 of each year or on each day on which the employer’s fiscal year ends, if it ends on a day other than December 31.

Other last day

(3) The last day on which information must be collected before the posting of the final version of the revised pay equity plan in accordance with section 83 or paragraph 85(2)(b) of the Act is the day that is selected by the employer or pay equity committee, as the case may be, provided that this day is not more than one year before the posting of the revised pay equity plan under section 80 or 81 of the Act and is before the day on which the revised pay equity plan must be posted in accordance with one of those sections.

Excluded changes

46 For the purposes of subsection 78(1) of the Act, the following changes are excluded:

• (a) all changes that are likely to have an impact on the identification of job classes under sections 32 to 34 of the Act, other than changes that are likely to result in
  • (i) the creation or elimination of a job class that is predominantly female or predominantly male, or
  • (ii) the merger of a predominantly female or predominantly male job class with another job class;
• (b) all changes that are likely to impact the determination, under sections 35 to 38 of the Act, of whether a job class is predominantly female or predominantly male — or neither — other than
  • (i) the change of a predominantly male job class to a predominantly female job class,
  • (ii) the change of a predominantly female job class to a predominantly male job class,
  • (iii) the change of a job class that was neither predominantly male nor predominantly female to a job class that is either predominantly female or predominantly male, and
  • (iv) the change of a predominantly female or predominantly male job class to a job class that is neither predominantly male nor predominantly female;
• (c) all changes that are likely to have an impact on the value of work performed in a job class as determined under sections 41 to 43 of the Act, other than any change in the skill required to perform the work, in the effort required to perform the work, in the responsibility required in the performance of the work or in the conditions under which the work is performed
  • (i) that are significant,
  • (ii) that impact the majority of the positions in the job class, and
  • (iii) whose impact on the job class is not temporary; and ; and
• (d) any change in the compensation associated with a predominantly female or predominantly male job class if, on a percentage basis, the change equally affects the compensation associated with each of the predominantly female or predominantly male job classes.

Use of workplace information

47 (1) Subject to subsection (2), the employer — or, if a pay equity committee has been established, that committee — must use the workplace information collected under section 45, on a day set out in that section, and any workplace information collected under that section since the day on which the most recent pay equity plan was posted, to identify any differences in compensation under subsection 78(1) of the Act for the period beginning on the earliest of the following days and ending on the day before the day on which the information was collected under that section:

• (a) the previous day on which workplace information was collected under section 45; and
• (b) the day on which the most recent pay equity plan was posted.

Retroactive salary rate change

(2) If workplace information that is collected on a day set out in section 45 contains a salary rate that is later changed with retroactive effect starting from a day that is prior to the day on which the information was collected but after the day set out in paragraph (1)(a) or (b), as the case may be, the employer or pay equity committee, as the case may be, must use that salary rate rather than the one that was collected.

Job class with greatest number of employees

48 For the purposes of subsection 78(1) of the Act, the reference in subsections 41(3) and 44(2) of the Act to “the individual predominantly female job class within the group that has the greatest number of employees” is to be read, with respect to a period for which workplace information was collected on a day set out in section 45, as a reference to the predominantly female job class within the group of job classes that had the greatest number of employees on that day, in the case where, on that day, the employer or pay equity committee, as the case may be, treats the group of job classes as one predominantly female job class under section 38 of the Act.

Job classes not treated as part of group

49 If in the most recent pay equity plan an employer or pay equity committee, as the case may be, treated a group of job classes as a single predominantly female job class, then, for the purposes of subsection 78(1) of the Act, those job classes must not be treated as a group of job classes for the purposes of sections 32 to 50 of the Act if

• (a) a job class created since the most recent pay equity plan is added to the group; or
• (b) any job class that was within the group has been combined with another job class, regardless of whether that other job class is within the group.

Calculation of compensation

50 (1) To identify any differences in compensation under subsection 78(1) of the Act, the employer or pay equity committee, as the case may be, must calculate compensation associated with predominantly female job classes and predominantly male job classes under sections 44 to 46 of the Act in each period for which the workplace information that has been collected must be used under section 47.

Phase-in of increases

(2) If an increase in compensation associated with a predominantly female job class is being phased in under subsection 61(2), 62(4) or 63(2) of the Act then, for the purposes of subsection 78(1) of the Act, the employer or pay equity committee, as the case may be, must calculate the compensation associated with the job class as if the increase had been made without being phased in.

Prohibited comparison

51 (1) For the purposes of subsection 78(1) of the Act, in carrying out the comparison of compensation under sections 47 to 50 of the Act, an employer — or, if a pay equity committee has been established, that committee — must ensure, subject to subsections (2) to (5), that no comparison is made between frozen compensation associated with a predominantly female or predominantly male job class and active compensation associated with a predominantly female or predominantly male job class in which unionized employees occupy positions.

Replacement salary rate

(2) Subject to subsections (3) and (4), if the compensation associated with a predominantly female or predominantly male job class is frozen, the rate to be used for the purpose of determining salary in the calculation of the compensation associated with a job class is the salary rate from the most recent year in which the compensation associated with 50% or fewer of the predominantly female or predominantly male job classes in respect of whom the pay equity plan in effect in that year applied was frozen, and the employees occupying positions in those predominantly female or predominantly male job classes respecting which the compensation was frozen were occupied by 50% or fewer of the employees in respect of whom the pay equity plan in effect in that year applied.

Exception

(3) If, in the circumstances referred to in subsection (2), the compensation associated with a predominantly female or predominantly male job class in respect of which the pay equity plan applies was frozen in the most recent year referred to in that subsection, the rate to be used for the purposes of determining salary in the calculation of the compensation associated with that job class is the salary rate obtained by adding, to the highest salary rate in the range of salary rates for positions in that job class in that year, the product obtained by multiplying

• (a) the salary at the highest rate in the range of salary rates for positions in the job class in that year;

by

• (b) the average percentage by which, since the compensation associated with the job class became frozen, the salary for positions in job classes that contain positions occupied by unionized employees to whom the pay equity plan applies and who are governed by a collective agreement that is not expired has increased.

Calculation of salary rate

(4) If the compensation associated with 50% or fewer of the predominantly female job classes and predominantly male job classes in respect of which the pay equity plan applies is frozen, and the employees occupying positions in the job classes respecting which the compensation is frozen account for 50% or fewer of the employees in respect of whom the pay equity plan is established, the rate to be used for the purpose of determining salary in the calculation of the compensation associated with a job class respecting which the compensation is frozen is the salary rate obtained by adding, to the highest salary rate in the range of salary rates for positions in that job class, the product obtained by multiplying

• (a) the salary at the highest rate in the range of salary rates for positions in the job class;

by

• (b) the average percentage by which, since the compensation associated with the job class became frozen, the salary for positions in job classes that contain positions occupied by unionized employees to whom the pay equity plan applies and who are governed by a collective agreement that is not expired has increased.

Other method

(5) If a pay equity committee has been established and the compensation associated with a predominantly female or predominantly male job class is frozen, the committee may, instead of using a method set out in subsections (2) to (4), use a method of its choice to calculate salary rates to be used to determine salary, provided that that method minimizes, to the extent possible, the differences in compensation that result from the compensation associated with a job class being frozen.

Difference in compensation during the last period

52 For the period beginning on the last day on which workplace information is collected under section 45 before the posting of the final version of a revised pay equity plan in accordance with section 83 or paragraph 85(2)(b) of the Act and ending on the day before the day of that posting, any difference in compensation is the same as the difference that the employer or pay equity committee, as the case may be, identified for the preceding period.

Posting

Postings regarding updating

53 An employer that is required to post documents under section 80 or 81 of the Act must keep those documents posted for at least 60 days.

Final version of revised pay equity plan

54 An employer that is required in accordance with section 83 or paragraph 85(2)(b) of the Act to post the final version of the revised pay equity plan and the document referred to in subsection 79(2) of the Act must keep them posted until the final version of the subsequent revised pay equity plan is posted under that section or paragraph.

Notice — increases

55 An employer that is required to post a notice relating to increases under section 84 of the Act must keep the notice posted until the later of the 60th day after the day it is posted and the day on which the increases to which the notice relates are paid in full.

Determination by member or panel

56 If the member or panel, as the case may be, requires that a determination at the conclusion of an inquiry into a question of law or jurisdiction be posted under subsection 167(2) of the Act, the employer must keep the determination posted for the period specified by the member or panel, as the case may be.

Decision or document issued by Pay Equity Commissioner

57 If the Pay Equity Commissioner, under section 176 of the Act, requires an employer to post any decision, order, notice of violation or other document issued by that Commissioner, the employer must keep that decision, order, notice of violation or other document, as the case may be, posted for the period the Commissioner requires.

Lump Sum

Entitlement

58 (1) For the purposes of subsection 88(2) of the Act, an employee referred to in subsection 88(1) of the Act is entitled to a lump sum in respect of each period set out in subsection 47(1) or section 52 in which a difference in compensation is identified between the predominantly female job classes and the predominantly male job classes and that occurs during the maximum period described in subsection 88(2) of the Act.

Amount

(2) The amount of the lump sum to which the employee is entitled in respect of a period set out in subsection 47(1) or section 52 is the product obtained by multiplying the amount of the increase in compensation that was calculated with respect to the period for the job class in which the employee occupied a position by the number of hours the employee worked in the period.

Transfers

Final version of pay equity plan

59 An employer that is required to post, in accordance with paragraph 94(1)(b) of the Act, the final version of the pay equity plan must keep it posted until the final version of the revised pay equity plan is posted in accordance with section 83 or paragraph 85(2)(b) of the Act.

Coming into Force

S.C. 2018, c. 27, s. 416

60 These Regulations come into force on the day on which section 181 of the Pay Equity Act comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

SCHEDULE

(Paragraphs 23(1)(b) and 27(3)(a) and (b))

Typical Job Classes

Item	Column 1 Job Class	Column 2 Similar Job Titles	Column 3 Descriptive Summary	Column 4 Characteristic Duties and Responsibilities	Column 5 Experience, Education and Training
1	Maintenance worker	(a) labourer; or (b) operator	As assigned by a manager, perform tasks and activities and provide services that do not require specialized knowledge	(a) perform basic or support tasks and activities within a team or organization, such as operating equipment, cleaning, conducting repairs, and performing routine maintenance tasks; (b) assist technicians, specialists or tradespersons in the completion of tasks and projects; and (c) report to a manager on the status of tasks and projects	(a) no prior work experience required (b) a high school diploma or equivalent may be required; and (c) on-the-job training may be required
2	Technician	(a) specialist; or (b) tradesperson	As assigned by a manager, perform tasks and activities and provide services that require a specialized degree of knowledge	(a) perform activities and tasks that require a specialized or particular degree of knowledge in a field of work, such as conducting research and analysis, developing technical policies and procedures and designing and inspecting systems to ensure compliance with operating standards; (b) provide advice and support to management regarding the tasks and projects of the team or organization; and (c) report to a manager on the status of tasks and projects	(a) a college diploma or other post-secondary program in a specialized field of study may be required; and (b) certification in a specialized field of study and a period of supervised work experience may be required
3	Manager	(a) supervisor; (b) team leader; or (c) program director	Based on direction from senior executives, organize and supervise the carrying out of tasks and projects by personnel within a team or organization	(a) plan, organize, direct, control and evaluate the operations and activities of a team or organization; (b) coordinate and assign tasks to personnel within the team or organization; (c) supervise the conduct and work of personnel and recommend measures to improve productivity, quality or other performance measurements; (d) report to a senior executive, board or owner on the status of tasks and projects; and (e) conduct personnel management tasks, including the recruitment, hiring, training and promotion of employees	A post-secondary degree or extensive experience, including supervisory or operation experience, may be required