Are You Prepared for Ontario’s Equal Pay for Equal Work effective April 1, 2018

March 26, 2018, by HR à la carte | Work Environment and Policies

April 1st.  It's Easter Day this year, as well as April Fool's Day, and also the day when the Equal Pay for Equal Work provision of Ontario's Bill 148 becomes effective.  A lot happening on one day!  

What is the Equal Pay for Equal Work provision? 

It's ensuring that all Ontarians, regardless of their gender or employment status (the number of hours they work, and whether they are casual, temporary, permanent or seasonal), are paid the same wage rate for equal work.  

How is this different from Ontario's Pay Equity laws?

Pay Equity ensures that Ontarians, regardless of gender, are paid the same wage rate for work of equal value (the work is different but the value to the organization of that work is equal).  

What is Equal Work?

There are 3 conditions that need to be met to determine if it is equal work:

1. the employee is performing substantially the same kind of work in the same establishment; and
2. the work requires substantially the same skill, effort and responsibility; and
3. the work is performed under similar working conditions. 

If an employer has more than one location, in order for the locations to be considered the same establishment, they need to be located in the same municipality, or have common bumping rights across municipalities.  "Bumping rights are the contractual right of an employee being laid off to replace an employee with less seniority who is not being laid off."

So what happens as of April 1st?

Effective April 1st, employees will have the right to request a review of their rate of pay if they believe there is a difference in their rate of pay based on their gender or employment status.  The employer will then need to conduct a review and provide a written response in a reasonable time frame.  If it is determined that there is a wage disparity that is related to gender or employment status, and the work is equal based on the 3 conditions outlined above, then the employer will need to increase the employee's wage rate accordingly (the employer cannot decrease other wages in order to make them equal that way).

Best Practices for Employers

The Ministry of Labour has published a guide on this new provision and lists the following best practices for employers:

"As a best practice, employers who rely on a seniority system, merit system, a system that measures earnings by quality or quantity of production, or any other factor to pay employees different rates of pay for doing equal work, should document the system(s) and advise all employees of how the system(s) apply.

Employers are also encouraged to:

• review their pay structures to ensure that they are in compliance with the equal pay rules in the ESA
• develop a salary or wage rate grid that outlines the minimum and maximum rates of pay for each job and advise employees of how they will progress through the grid
• post wage rates or scales for advertised job vacancies
• avoid asking job applicants about their prior compensation and benefits or looking for that information through other means during the hiring process"

There is a good tool in the guide to walk employers through the steps of conducting a review when they are requested to do so and the questions that they need answered in order to make a determination.  

This provision also applies to the employees of Temporary Help Agencies.  In their case, their employer is the Agency and not the client employer.

Stay tuned for further blogs on the changes to Ontario's employment laws.  If you missed any of our other blogs, they are listed below.

Ontario's New Scheduling Provisions

Proposed Changes to Ontario's Employment Standards Act

Need help becoming compliant?  We can help. Call us at 1-888-919-7422 to speak with one of our HR Consultants.