Wage Discrimination: Everything Canadian Employers Need to Know

Wage discrimination is a prevalent issue in the Canadian workforce that affects employees across all industries and sectors. It occurs when an employer pays different wages to employees who perform the same or similar work, based on their race, gender, age, religion, or any other protected grounds under human rights legislation. Wage discrimination is illegal and goes against the principles of fairness and equality that are essential to a just and democratic society.

In this article, we will provide Canadian employers with everything they need to know about wage discrimination, including its forms, legal implications, and best practices to prevent it in their workplaces.

What is wage discrimination?

Wage discrimination refers to the act of paying someone less based on their gender, religion, ethnic origin, or any other protected characteristic under human rights legislation. This can take many forms, such as paying women less than men for the same work, paying women of a certain race less than others, or paying an employee less because of their religion.

Wage discrimination based on gender is prevalent across various industries, including finance and insurance, healthcare, transportation, warehousing, and non-profit organizations. It’s worth noting that men can also experience wage discrimination, though it’s less common than in the examples mentioned above. To prevent human rights claims related to wage discrimination, it’s important to ensure that all employees are paid equally for work of equal value.

What is the Gender Wage Gap?

The Gender Wage Gap (GWG) is a well-known form of wage discrimination in Canada, which refers to the difference in pay between men and women who perform the same or similar work. This disparity is often more significant for women who are racialized, Indigenous, or have disabilities. To combat the GWG in Canada, various jurisdictions have introduced legislation.

How is Canada addressing wage discrimination?

To avoid wage discrimination in your business, it’s crucial to familiarize yourself with applicable federal or provincial laws regarding equal pay as an employer.

Federal Wage Discrimination Laws

In 2018, the federal government of Canada introduced the Pay Equity Act, which became effective on August 31, 2021. This legislation aims to establish a proactive pay equity process for federally regulated workplaces with 10 or more employees. The list of federal workplaces includes airports and airlines, television and broadcast companies, and banks.

The primary focus of this legislation is to require employers to develop and maintain pay equity practices within their workplaces. Employers must:

• identify different job classes consisting of positions within their workplace;
• determine if each job class is predominantly male, predominantly female, or gender-neutral;
• assess the value of work for each predominantly female or male job class;
• calculate compensation for each predominantly female or male job class; and
• draw compensation comparisons between predominantly female and male job classes performing work of equal or comparable value.

Employers must ensure pay equity within their workplace and eliminate any gender pay gaps.

Provincial Wage Discrimination Laws

Alberta

Under Alberta’s the Human Rights Act, employers must pay employees of both sexes the same rate of pay for performing the same or similar work. However, employers may pay employees doing the same role different wages if the reason isn’t based on gender.

British Columbia

Unlike other provinces, British Columbia doesn’t have legislation in place to address pay disparity between genders. However, paying an employee less solely because of their gender is considered discrimination under human rights legislation.

Ontario

The Ontario Pay Equity Act requires employers to give women and men equal pay for work of equal value. Employers may pay women and men differently for work of equal value if the employer has an established seniority system, merit system, or measures the quality or quantity of the work completed.

Manitoba

The Manitoba Pay Equity Act requires employers to pay women and men equal pay for work of equal value based on skill, effort, responsibility, and working conditions.

Saskatchewan

Similar to British Columbia, Saskatchewan hasn’t implemented equal pay legislation. However, the Saskatchewan Human Rights Code prevents employers from paying women and men differently based on their gender. Employers may pay women and men differently based on seniority or productivity measures.

New Brunswick

In New Brunswick, the Employment Standards Act prohibits employers from wage discrimination based on sex for work that is performed in the same establishment, or that is substantially the same in nature, requires the same effort, skills, and responsibilities, or that is is performed under similar working conditions.

Nova Scotia

The Nova Scotia Pay Equity Act bars employers from paying employees less than others for doing similar work. Employers may still pay employees different wages if there is an established seniority or merit system, or measures in place that monitor the employee’s quantity or quality of work.

Newfoundland & Labrador

While Newfoundland & Labrador is in the process of passing pay equity and pay transparency legislation for the public sector, there is currently no pay equity legislation for most employers. However, employers must not pay employees differently based on a protected characteristic under human rights legislation.

How can we eliminate wage discrimination in the workplace?

Eliminating wage discrimination in the workplace is a crucial step towards creating an inclusive and discrimination-free environment, in accordance with human rights and pay equity legislation. Here are some actionable tips that businesses can implement to prevent and eliminate wage discrimination:

Understand the law

Ensure that you are familiar with the applicable laws surrounding equal pay, to avoid unintentionally perpetuating wage discrimination.

Implement anti-discrimination policies

Implement policies that prohibit discrimination and protect employees from being paid differently based on protected grounds under human rights legislation.

Base compensation decisions on objective criteria

Use objective criteria, such as skills, education, and experience, to determine an employee’s compensation. Avoid considering factors such as gender, race, age, or other protected grounds when determining wages.

Train and educate managers

Managers are often responsible for making compensation decisions, so it is important to train and educate them on how to handle raised requests. Managers should base their decisions on an employee’s performance, rather than personal feelings or biases.

By implementing these strategies, businesses can create an inclusive workplace, free from wage discrimination.

Do you need help drafting policies that combat wage discrimination?

During the wage assessment process, it is essential to maintain objectivity and avoid any biases or personal preferences. If you require assistance in developing strategies for assessing wages or implementing transparent policies on wages for your employees, Peninsula’s services can provide quality advice on any employment-related issues.  To learn more about how our services can benefit your business, call an expert today at 1 (833) 247-3652