Pay equity to be legislated by 2018

Federally regulated workplaces affected – but experts say move is not soon enough
By Marcel Vander Wier
|Canadian HR Reporter|Last Updated: 02/23/2017

The federal government’s decision to legislate pay equity by 2018 is a major step forward in terms of workplace fairness, say experts   — though some wish it could be implemented immediately.

Reform of the current complaint-based system is expected to require employers to regularly review their compensation systems, as well as identify and address any gender-based disparities. All types of federally regulated workplaces would be affected — a total of 10,800 employers and 874,000 workers.

“Having a gender wage gap in Canada in 2016 is unacceptable,” said Status of Women Minister Patty Hajdu. “Our government believes strongly in the principle of equal pay for work of equal value and the fair treatment of all workers in the workplace, and we are committed to taking actions to help close the gender wage cap, support the economic advancement of women, and reduce income inequality.”

Women earn just 87 cents to every dollar earned by men in the federal private sector and Crown corporations, according to Statistics Canada.

Playing catch-up

But the federal government is actually behind the curve, according to Parbudyal Singh, human resources management professor at York University in Toronto.

“Efforts were made back in 2004 to get this thing going, but with a change of government, nothing happened.”

The roots of this legislation date all the way back to Judge Rosalie Abella’s Royal Commission on Equality in Employment in 1984, said Toronto lawyer Jan Borowy with the firm Cavalluzzo.

While the federal government did implement guidelines under the Canadian Human Rights Act in 1986, it only provided guidance for a complaint-based system, she said. Then, in 2004, it completed further analysis on pay equity, assembling a task force that published a 571-page report.

“What has changed since 1984?” said Borowy. “Unfortunately, this government didn’t listen to its own Royal Commission, put it on the back shelf and just have allowed women to linger.”

In that light, the federal government’s timeline to implement the long-awaited proactive legislation is regrettable.

“We don’t understand why this government needs to wait until 2018,” she said. “It needed to be done years ago and there’s no reason for the delay now.”

The federal government’s proactive legislation should be implemented fairly easily, said Singh. Currently, Ontario and Quebec both have regulations in place.

“I actually don’t think we need two years of consulting with employers and groups on this,” he said.

The fundamental issue is that it’s law now, said Borowy.

“Employers are required to ensure equal pay for work of equal value. This is a fundamental human right that employers are ignoring.”

Companies already face a legal obligation in terms of equal wages, she said.

“Every employer should, frankly, be reviewing their compensation practices for gender equality,” said Borowy.

“If they’re not doing that, and there is a differential treatment, then they can face serious, significant legal ramifications… It’s very important for an employer to take their own initiatives and keep reviewing their compensation practices on a regular basis to make sure that a wage gap and differential treatment is not emerging.”

Undervaluation of women

Historically, women’s compensation has been lower due to the effects of gender stereotyping and conscious or unconscious bias and discrimination, according to a 2015 report issued by Ontario’s Gender Wage Gap Strategy Steering Committee.

Employers questioned women’s commitment levels due to societal pressures that viewed them as more likely to miss work due to family obligations or pregnancy.

“One of the consequences of stereotyping is the undervaluation of women’s work,” said Emanuela Heyninck, Ontario’s pay equity commissioner, who is “extremely pleased” with the federal government’s efforts to end this type of discrimination.

“The gender wage gap and the undervaluation of work have been recognized as a significant
problem and it’s not being fixed by market forces,” she said.

“Like all labour standards, you have to set a bar, and pay equity happens to be the bar that’s set around identifying discriminatory pay practices.”

But pay equity legislation alone won’t solve the gender wage gap, said Singh. Societal norms will need to change as they have proven to be the basis for the undervaluation of women’s labour.

“There are many reasons for the gap, and some of those aren’t addressed in pay equity legislation,” he said. “It asks organizations to fix the gap… But the pay equity legislation would only close a fraction of (it). Government has to take additional initiative.”

Push for transparency

Alongside the proposed pay equity legislation is a further push for equality, with the federal government promoting corporate transparency in terms of female leadership.

In an effort to promote diversity, Economic Development Minister Navdeep Bains’ Bill C-25 would require publicly traded companies to divulge the number of women sitting on their boards or working in senior management.

“Is that a piece of the puzzle? Absolutely,” said Borowy. “Until you actually shine the spotlight on what’s happening with pay practices and compensation practices in workplaces, you won’t see the inequality.”

Transparency always helps push issues forward, said Heyninck.

“Companies can see what their competitors are doing and it sort of levels the playing field for everybody,” she said. “It just shines the spotlight on a problem.”

Women make up 50 per cent of the workforce and population now, said Heyninck.

“They make up at least 50 per cent of graduating classes at virtually all levels of education. Given those factors, it doesn’t make any sense that there aren’t more women in leadership.”

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