We’ve all heard about pay equity but what does that actually mean in a workplace? And as an Ontario employer, what are your obligations around reaching and maintaining pay equity? One this is for sure, outside of a huge financial risk, you also do not want to be known as an employer who is not paying their employees equally. Here’s everything you need to know about your obligations under the Pay Equity Act.

What is Pay Equity? 

Pay equity means equal pay for work of equal value. This means employees who perform substantially the same kind of work in the same establishment,  which requires substantially the same skill, effort, and responsibility and under similar working conditions should be compensated equally, regardless of gender. All of these conditions must be met for equal pay for equal work to be required.

But of course, there are some exceptions. Even if all of the above conditions are met, a difference in pay can apply due to seniority (length of service), merit (how well they perform at their jobs), or systems that measure earnings by production or quality (promotions based on exceeding sales, etc.). The difference in rate of pay includes hourly or salary pay rates, overtime pay rates, and commission rates.