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Closing the Gap

What is pay equity? How does it compare to pay equality? and does the “Gender Pay Gap” or the “Gender Wage Gap” really matter?

Pay Equity is the concept of “Equal Pay for Work of Equal Value”. Covered by the Pay Equity Act (1990), it compares the value and pay of different jobs and requires employers to pay female jobs at least the same as male jobs if they are of comparable value. Pay equity compares jobs usually done by women with different jobs usually done by men. Female jobs are those jobs considered to be mostly or traditionally done by women such as nurses, librarian, childcare worker or secretary. Male jobs are those that are mostly or traditionally done by men, such as electrician, truck driver or firefighter. Though this is not necessarily the norm anymore.

Pay Equality concerns the concept of “Equal Pay for Equal Type of Work”. The Equal Pay provisions of the Employment Standards Act require that men and women receive equal pay when doing the exact same job or substantially the same job, such as two cooks or two machine operators on the same line.

Ontario has proposed new transparency legislation aimed at further eliminating the Gender Wage Gap. The bill was introduced on Tuesday March 6th 2018. This is happening despite pay equity being fully protected by the Pay Equity Act, the Human Rights Code and the Ontario Employment Standards Act equal pay provisions, and the fact that the government has just also passed legislation (Bill 148) requiring employers to pay part-time employees the same wages as their full-time counterparts.

This new bill would require the following from employers:
• All advertised job postings to include a salary rate or range,
• Bars employers from asking about past compensation,
• Prohibits reprisal against employees who discuss or disclose compensation, and
• Requires large employers to track and report compensation gaps based on gender and other diversity characteristics and disclose the information to the province.

The reporting requirements contained in the proposed reforms will be applied to specific sectors. First, they will be rolled out for the Ontario Public Service. They will subsequently be introduced for private sector workplaces with more than 500 employees, and then those with more than 250.

It is not hard to fathom that the Ministry of Labour would eventually want smaller employers to release the same data. According to the ministry, small businesses represent 95 per cent of all employers in Ontario, and employ 28 per cent of Ontario’s workers.

Based on interpretation of the existing Human Rights Code, 100% of employers have an obligation to provide equal pay with no exceptions. So there really is no principle justification for restricting pay transparency. Civil service workers’ pay structures are already transparent because they are unionized employees with publicly available collective agreements that lay out pay rates. Also, Public Service employees who make over $100,000 are also named by the province each year on the so called “Sunshine List”.

How much is this new legislation p estimated to cost? It is part of a broader, $50 million three-year plan for women’s economic empowerment. This cost may well increase over time. The proposed changes seem to be in line with other measures from the Ontario government that focus on fairness and opportunity, such as the province’s increase to minimum wage and expansion of drug coverage for people under age 25. It also aims to reduce or eliminate the Gender Wage Gap. Ontario Labour Minister Kevin Flynn said the government has looked to other jurisdictions for the basis of its pay transparency legislation, including existing laws in Germany, Australia and the United Kingdom.

Critics, including Ontario’s Equal Pay Coalition, who estimate the gender pay gap in Ontario to be as much as 30%, say that the proposed legislation is too weak and fails to address fundamental issues surrounding wage discrimination. The group estimates that the pay gap widens further based on race and origin. The pay gap for Indigenous women is 57 per cent, for immigrant women it is 39 per cent, and for racialized women it is 32 per cent. Women also make up majority of minimum-wage earners and part-time workers.

Overall even before this new regulation comes into effect, business owners would do well to “Mind the Gap”.