Equal Pay for Equal Work New Amendment is Here. Have you made changes?
Bill 148 introduced a lot of changes to the ESA, many of which have already come into effect such as minimum wage increase. The ESA had already provided that employers are prohibited from paying employees different rates based on sex if they performed work that required substantially same skills, effort and responsibility and they worked under similar conditions.
Effective April 1, 2018 Bill 148 adds a new provision to the ESA with similar prohibitions to mandate employers pay employees at the same rate based on employment status when they work in the same establishments and;
- They perform substantially same kind of work
- Their work requires substantially same skills, effort and responsibility
- They work under similar working conditions.
The term “employment status” in the ESA refers to difference in permanent, temporary, seasonal or casual employment.
Bill 148 also requires temporary help agency employees to be paid at the same rate as existing employees of the agency’s client who perform substantially the same work with criteria set out above.
Employers cannot reduce an employee’s rate of pay in order to comply with this provision of Bill 148.
Are there any exceptions?
A difference in the rate of pay is still justifiable based on any of the following criteria:
- A seniority system
- A merit system
- A system that measures earnings by quality or quantity of production
- Any other factor other than sex or employment status.
Although rate of pay has not been defined, it likely requires same wage rate but not same benefits or other entitlements.
Subsequently, any employee who believes that their rate of pay does not comply with this provision, can request a review of their pay rate from their employer. When employee does so, employer must either adjust employee’s pay rate or provide a written response with reasons clearly set out.
What your business should do to be prepared
As a result of these amendments, provincially regulated employers in Ontario should take a holistic look at their employees and positions to determine if any employees at an establishment are performing substantially same kind of work requiring substantially same skills, effort and responsibility under similar conditions are being paid different rates. If the difference in rate is not based on any exceptions including seniority and merit, consider increasing pay rates before a request for wage review comes in.
It is prudent to have standardized procedures in place that include job descriptions (for which compensable factors are taken into account) and carefully documented performance management and employee evaluation. Employers should also decide on how they will have employees’ request for wage review handled with steps concisely determined.
