Canada pay transparency reporting law guide


Introduction
Canada's Pay Equity Act, which was passed in December 2018, came into force Aug. 31, 2021. The Act requires employers that are unionized or have 100 or more employees to publish pay equity plans.
Canadian employers had three years from the law's enactment to develop their pay equity plans. The first plan had to be finalized and posted by Sept. 3, 2024.
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Canada Reporting Requirements
The initial pay equity plan had to be developed by July 5, 2024. Employees at applicable organizations were given a minimum of 60 days to provide written comments on the plan to be considered.
Who Needs to Report?
Employers that are unionized or have 100 or more employees are required to develop and publish pay equity plans. Federally-regulated organizations with 10 or more employees are also required to prepare and post a plan.
What to Report?
The pay equity plan must contain the following components:
- Identify job classes in the workplace (i.e. positions that share certain similarities);
- Determine which job classes are commonly held by women and which ones are commonly held by men;
- Value the work done in each of these job classes;
- Calculate total compensation in dollars per hour for each predominantly male and female job class; and,
- Determine whether there are differences in compensation between jobs of equal value.
Where and When to Report?
The pay equity plans must be posted on the company’s website by Sept. 3, 2024.
Regulatory Filing
Pay equity plans are to be published and made accessible to all employees and the public, but regulatory reporting is not required in the first two years.
Gender pay gap information must be published on the employer’s website, or made available in physical format at the employer’s principal place of business if a website does not exist.
After year three (2027), employers are required to file an annual statement.
Internal Disclosure
Employees must have access to the pay equity plans, and employees were required to have a minimum of 60 days to review the plans and provide written input.
Deadlines and Cadence
Employers will be required to file their annual statement in 2025 and must update their pay equity plan every five years.
Once the final version of the pay equity plan has been posted, employers must correct any pay equity gaps. This is done by increasing the compensation of employees in jobs that are not receiving equal pay for work of equal value. These increases in compensation are payable in full the day after the final version of the plan is posted; however, employers may be allowed to phase in these increases, according to the Canadian Human Rights Commission.
If the total amount of the increases in compensation that are owed to all employees is greater than 1% of the employer’s annual payroll, the employer may phase in the increases over a number of years.
Timelines for doing so differ depending on the number of employees:
- Employers with 10 to 99 employees who qualify must phase in the increases in compensation within five years of posting their plan.
- Employers with 100 or more employees who qualify must phase in the increases in compensation within three years of posting their plan.
Each annual increase must be equal or greater than 1% of the employer’s payroll costs for the year preceding the posting of the plan.
Canada Pay Transparency Requirements
There is currently no federal requirement in Canada for employers to post salary details to applicants or employees regarding specific positions.
However, Canadian provinces British Columbia and Ontario have enacted pay transparency laws, which require applicable employers to provide salary ranges on job postings.
Employment Equity Standards
Canada's Employment Equity Act of 1995 was established to achieve equality in the workplace so that no person shall be denied employment opportunities or benefits for reasons unrelated to ability.
The Act prevents employers from discriminating on the basis of gender, race/ethnicity, disability, sexual orientation, and other protected classes. The Act specifically provides protections for women, Aboriginal peoples, persons with disabilities and "members of visible minorities by giving effect to the principle that employment equity means more than treating persons in the same way but also requires special measures and the accommodation of differences."
The Risks of Non-Compliance
Employers that do not comply with the Act are subject to penalties. Violations could cost an organization between $30,000 to $50,000, as imposed by the Canada Pay Equity Commissioner.
How Can Trusaic Assist with Canada Pay Equity Plan Reporting Compliance?
1. Comply - Use Trusaic's RAPTR solution to complete required reporting by compliance deadlines:
Applicability Determination: Perform an accurate assessment of your applicability, according to jurisdictional specific definitions and regulatory frameworks so you can understand your reporting obligations across the globe.
Deadline Management: Prepare ahead of time with project timelines, timely notifications, and reminders, to keep you on track to meeting jurisdictional deadlines.
Expert Legal Guidance and Support: Benefit from the expertise of our trusted pay equity attorneys, so you understand your compliance requirements across a diverse global regulatory landscape. Receive world-class customer support, including assistance throughout the compliance process.
Streamlined Data Extraction: Collect the necessary data for analysis and submission with a simple click of a button; powered by certified data integrations with the world's largest HCM, HR and Payroll platforms, including Workday, SAP, UKG and ADP. Provide data through Trusaic's Workplace Equity platform, a SOC 2 Type II and GDPR-compliant tool for data transmission.
Data Quality Assurance: Trusaic performs data validations to ensure your collected data and information aligns with the standards and definitions provided by each jurisdiction.
Compliant Report Outputs: Take away the burden of reporting by effortlessly generating outputs containing necessary compliance information.
Reporting Checklist: Follow step-by-step guidance on where, when and how to report to any jurisdiction's regulatory body, as well as your required internal disclosure and public posting obligations.
2. Correct - Use PayParity and OpportunityParity to understand, explain and resolve pay disparities:
Risk Assessments: Stay aware of any potential exposure to any government audit or litigation. Our cross-functional team of data scientists, statisticians, and government regulatory compliance experts have rigorously worked to reverse-engineer the calculations that will be used by jurisdictions to estimate pay disparities, so you can prepare in advance.
Understand your Pay Gaps: Leverage Trusaic's pay equity software solution to explain your pay gaps so you can understand the root causes and safeguard from equal pay claims and legal action.
Resolve Pay Disparities: Make pay adjustments where applicable so you can eliminate pay disparities and show improvements in your reported pay gaps from one year to the next.
Identify Barriers to Professional Growth: Ensure workforce diversity and equity with hiring, promotion, retention, and opportunity analytics using opportunity equity software solution.
3. Communicate - Use Trusaic's Workplace Equity Solution to communicate narratives and share salary ranges with confidence:
Workplace Equity Narrative: Communicate the sources of your pay gaps, progress objectives, and corrective measures to employees and internal stakeholders with Trusaic's Workplace Equity product suite. Show data-backed progress in your pay gaps over time.
Salary Range Explainability: Use Salary Range Finder to establish and post competitive and equitable pay ranges to confidently comply with pay transparency laws.
Mitigate Risk of Recurrent Pay Disparities: Ensure new hires receive fair pay offers with the use of external labor market data and internal pay equity analytics to reduce unplanned and expensive pay remediations.
Trusaic is GDPR compliant and can assist any Canadian organization operating in an EU state in meeting its obligations under both the EU Corporate Sustainability Reporting Directive and the EU Pay Transparency Directive.