There are several reasons why federally regulated organizations in Canada need to have pay equity compliance in place by October 2024.
What is Pay equity Compliance?
In Canada, pay equity compliance has been a long-standing issue that has resulted in widespread income inequality between men and women. According to recent statistics, women in Canada earn approximately 87 cents for every dollar earned by men. To address this issue, the federal government has taken steps to implement pay equity legislation that requires federally regulated organizations to establish and maintain pay equity plans.
The Canada Pay Equity Act was introduced in December 2018 and came into force on August 31, 2020. The Act requires employers to identify and eliminate gender-based wage discrimination in their workplaces. This means that employers must ensure that employees who perform work of equal or comparable value receive equal pay, regardless of their gender.
Federally regulated organizations in Canada, including banks, telecommunications companies, and interprovincial transportation companies, are required to comply with the Pay Equity Act. The Act applies to organizations with ten or more employees, and failure to comply with the Act can result in penalties and fines.
What are the requirements of Pay Equity Compliance?
One of the most significant requirements of the Pay Equity Act is that employers must establish and maintain a pay equity compliance plan. The plan must include a job evaluation system that assesses the value of work performed by employees, taking into account factors such as skill, effort, responsibility, and working conditions. The plan must also include a comparison of the compensation for male and female employees performing work of equal or comparable value, and identify any differences in compensation that cannot be justified on non-gender-based factors.
Federally regulated organizations must complete their pay equity plans within three years of the Act coming into force, which means that they must have their plans in place by October 2024. This deadline is fast approaching, and organizations that have not yet started the process of establishing their pay equity plans may find themselves struggling to meet the deadline.
There are several reasons why federally regulated organizations in Canada need to get pay equity in place by October 2024. First and foremost, it is a legal requirement that cannot be ignored. Failure to comply with the Pay Equity Act can result in significant penalties and fines, which can be damaging to an organization’s reputation and financial stability.
In addition to the legal requirements, there are also moral and ethical considerations. Pay equity is an issue of social justice and human rights. By ensuring that employees are paid fairly and equitably, organizations are demonstrating a commitment to equality and inclusivity. This can have a positive impact on employee morale and productivity, as well as the organization’s reputation in the community.
Furthermore, pay equity can be a significant factor in attracting and retaining talent. In today’s competitive job market, job seekers are looking for organizations that value diversity, equity, and inclusion. Organizations that have established pay equity plans and are committed to fair and equitable compensation are more likely to attract top talent and retain their existing employees.
In conclusion, federally regulated organizations in Canada must get pay equity compliance in place by October 2024. The legal requirements of the Pay Equity Act, coupled with the moral and ethical considerations, make pay equity an essential issue for organizations to address. By establishing pay equity plans and ensuring that employees are paid fairly and equitably, organizations can demonstrate their commitment to equality and inclusivity, attract and retain top talent, and maintain a positive reputation in the community.
Our Encompassing Visions™ team of pay equity and compensation experts will provide guidance and training to help you thoroughly analyze and understand what your organization is paying for, and why. Please call us toll-free at 1-866-913-3628 or fill in the short form here to request your guided demo.