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Employer Advice – Equal Pay For Equal Work is in Effect

Update: Equal Pay For Equal Work is in Effect, as of April 1, 2018

As part of the Fair Workplaces, Better Jobs Act, 2017, Ontario’s employment standards have and continue to change. Effective as of April 1, 2018, Ontario is mandating Equal Pay For Equal Work; this applies to both employers and temporary help agencies. The purpose of this new labour law is to regulate pay for employees who perform the same work, regardless of their employment status. The impact on business owners is the increase to the rate of pay an employee is to receive.

Equal Pay For Equal Work Defined

By mandating Equal Pay For Equal Work, Ontario employers must reassess their employment practices. The province’s new rules ensure that part-time, casual, temporary and seasonal workers are being paid equal to or greater than full-time and permanent workers, if substantially:

  • They do the same kind of work, for the same employer;
  • Their work requires the same skill, effort, and responsibility; or
  • Their working conditions are similar.

While these new regulations will impact most Ontario employers, there are a few exceptions to when equal pay should be provided for equal work. These restrictions include, when the pay difference is due to systems based on:

  • Seniority;
  • Merit; or
  • Earnings measured by quantity or quality of production.

Essentially, where a difference in pay is based on any factor other than gender or employment status, employees who do the same work can be paid a different rate of pay. Under the Employment Standards Act, 2000 (ESA)as an employer, you cannot lower your employees’ pay rates to create equal pay for equal work.

What does Equal Pay For Equal Work mean for small business owners?

The greatest impact is on the employer. In addition to transitioning to Ontario’s new labour laws, business owners will also need to factor in the increase to labour costs and administration. It becomes particularly challenging where small businesses operate with fewer resources and broader job descriptions. You can start by evaluating your employment practices, especially if your business operations are dependent on part-time, casual, temporary or seasonal workers. When hiring for these types of positions, make sure you:

  1. Have detailed job descriptions in place;
  2. Create a formal workplace policy indicating clear seniority, merit or productivity systems; and
  3. Revisit your existing policies around discrimination in the workplace to ensure your business is up-to-date.

It’s best to consult with a HR professional for employer advice, if you have questions about the changes that Bill 148 brings to your business.