In Canada women earn less than men

The gender pay gap is alive and well in Canada and many other advanced economies But currently top of mind in Canada. Despite the longstanding nature of equal pay and pay equity legislation in Canada, on average, women still earn less than men. A report by Statistics Canada shows that women earn approximately CAD 0.88 for every dollar earned by men (as measured by the wage ratio method, i.e., comparing hourly wage rates of full-time workers). The Ontario Government and the Federal Government recently took steps aimed at improving women’s equality in the workforce and addressing the gender pay gap in these jurisdictions. We outline the key aspects of both initiatives below. We also summarize existing gender pay legislation and highlight current opinions as to why the gender pay gap persists.

Ontario is Canada’s most populous province and accounts for approximately 39% of the country’s labor force. Ontario’s newly introduced Pay Transparency Act, 2018 is set to come into force on 1 January 2019. The Act imposes requirements on employers to promote equality of compensation between men and women, and to increase the transparency of information regarding compensation and workforce composition. Ontario looked to other jurisdictions in developing the legislation, including the UK, Australia and Germany, and the Act puts the province ahead of other governments who are stepping up efforts to close the gap. Key requirements are as follows:

  • A salary rate or range must be stated in all publicly advertised job postings.
  • Job candidates may not be asked about their past compensation.
  • No reprisals may be made against employees who discuss or disclose compensation.
  • Employers with 100 or more employees and prescribed employers (i.e., prescribed by forthcoming regulations to the Act) must track and annually report compensation gaps based on gender and other prescribed characteristics (in “pay transparency reports”).
  • Such employers will need to post their pay transparency report online, or in at least one conspicuous place, in every workplace of the employer.
  • The province will also publish pay transparency reports, which may be done online.

The initial reporting dates are staggered:

  • Employers with 250 or more employees must submit their first report by 15 May 2020.
  • Employers with 100 to 249 employees must submit their first report by 15 May 2021.

“Compensation” is defined as “all payments and benefits paid or provided to or for the benefit of a person who performs functions that entitle the person to be paid a fixed or ascertainable amount.” However, other details of what information is to be tracked and reported on are reserved for the regulations, which have not yet been released. Also reserved for the regulations is information as to:

  • which employers, in addition to those with 100 or more employees, will be subject to the tracking and reporting requirements
  • the characteristics, other than gender, to be tracked and reported on
  • the amount of the penalties that compliance officers will be permitted to impose upon employers who are found to contravene pay transparency requirements

At present, we do not know whether employers will need to report on the overall gap within their organization (as in the UK) or gaps between employees at the same level or in the same job role. The granularity of gap reporting can identify different issues – the UK single figure approach can reveal a representation gap, whereas the in-grade approach can reveal potential discrimination

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