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Equal pay for equal work: What it means to your business

The Ontario government’s new “equal pay for equal work” rules take effect on April 1, 2018.

What are my obligations as an employer under the new equal pay for equal work rules?
As of April 1, 2018, you cannot pay full-time and non-full-time (part-time, contract, casual, seasonal, temporary) employees a different rate of pay for performing “substantially the same kind of work”.

I only employ full-time employees. Does this affect me?
No. You can pay employees of the same employment status (e.g., full-time to full-time) different pay rates for equal work as long as it’s not due to a difference in sex.

What is a different pay rate?
A difference in the rate of pay is a difference in:

  • Hourly pay rate
  • Salary
  • Overtime pay rate
  • Commission rate

I offer benefits to some of my employees (e.g., full-time employees).

Am I now required to provide benefits to all my employees?
The equal pay for equal work provisions do not include benefits or employee perks.

What is considered “substantially the same work”?
“Substantially the same kind of work” means that the work does not have to be exactly the same. What matters is the actual work the employee does, not their job description or contract. The Employment Standards Act outlines this as work requiring the same skill, effort, responsibility, and working conditions.

What if I own more than one business?
To qualify under the equal pay rules, the employees must work at the same establishment (meaning they are in the same workplace with the same working conditions). However, if you have two or more locations, you are required to comply with the equal pay for equal work provisions when:

  • The different workplaces are in the same municipality with the same working conditions; or
  • There are “bumping rights” for at least one employee across municipal borders.

Are there any exceptions to the equal pay for equal work rules?
There are some exceptions to the equal pay rules if your business pays employees based on a seniority system, a merit system, or a system that measures earnings by production quantity or quality. The Ontario government recommends that any of these systems be transparent, documented and communicated to employees as part of your business policy.

Are there any exemptions from the equal pay for equal work rules?
The equal pay rules do not apply to students under 18 (if their weekly hours do not exceed 28 hours, or if they work during school holidays) and employees in the recorded visual and audio-visual entertainment production industry.   

Which employees can ask for a pay review?
Employees can request a pay review if they think they are being paid less than employees of a different employment status doing substantially the same work.

If the employer finds there is a violation (i.e., the employee is being paid less, and no exceptions apply), they must increase the employee’s pay rate to match that of the other employee doing substantially the same work.

If the employer does not believe there is a violation, they must outline why in writing.

Can employees talk about their wages in the workplace?
You cannot punish employees for requesting a pay review, and you cannot punish employees for disclosing/discussing their salary or rate of pay in the workplace with other employees for the purpose of determining whether they are receiving equal pay for equal work.