Pay Equity Regulations (SOR/2021-161)

Marginal note:Sum of differences method

• 16 (1) The employer or pay equity committee, as the case may be, that uses the sum of differences method must multiply, for each predominantly female job class that is located below the male regression line established under paragraph 50(1)(a) of the Act, the factor calculated in accordance with subsection (2) by the absolute value of the difference between the compensation associated with the predominantly female job class and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class.

• Marginal note:Factor

  (2) For the purposes of subsection (1), the factor is the result of the formula

  (A − B) ÷ C

  where

  A

  is the sum of the compensation associated with predominantly male job classes, were such job classes located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job classes;

  B

  is the sum of the compensation associated with the predominantly female job classes or the value determined for A, whichever is less; and

  C

  is the sum of the absolute values of the differences, for each predominantly female job class that is located below the male regression line, between the compensation associated with the job class and the compensation associated with a predominantly male job class, were such a job class located on the male regression line, in which the value of the work performed is equal to that of the predominantly female job class.

• Marginal note:Increase in compensation

  (3) The increase in compensation associated with a predominantly female job class located below the male regression line is the product calculated in accordance with subsection (1) in respect of that job class.

Marginal note:Clarification

17 The segmented line method set out in section 15 and the sum of differences method set out in section 16 are to be applied without regard either to the number of employees or to the number of positions in a job class.

Obligations — No Predominantly Male Job Classes

Marginal note:Application

18 Sections 19 to 29 apply with respect to an employer — or, if a pay equity committee has been established, to that committee — for the determination of differences in compensation for the purposes of section 60 of the Act, if the employer or committee, as the case may be, has determined that there are no predominantly male job classes.

Marginal note:Choice of method

• 19 (1) An employer — or, if a pay equity committee has been established, that committee — must use, to determine differences in compensation for the purposes of section 60 of the Act

  • (a) at least three predominantly male job classes of its choice from another employer that meets the conditions set out in subsection (2); or

  • (b) three fictional predominantly male job classes, each of which is created by the employer or committee based on a different typical job class set out in Schedule 1.

• Marginal note:Other employer

  (2) For the purposes of paragraph (1)(a), the other employer must meet the following conditions:

  • (a) it must have at least three job classes that it — or, if a pay equity committee has been established by the other employer, that committee — has determined under section 35 of the Act to be predominantly male and for which the compensation has been calculated in accordance with sections 44 to 46 of the Act; and

  • (b) it must agree to provide the employer — or, if a pay equity committee has been established by that employer, that committee — that has chosen to use those job classes with the data in its possession that is necessary to determine the value of work performed in those job classes and, for each job class chosen, with the salary at the highest rate in the range of salary rates for positions in the job class.

• Marginal note:Criteria

  (3) An employer — or, if a pay equity committee has been established, that committee — choosing job classes provided by another employer under paragraph (1)(a) must, to the extent possible, ensure that those job classes

  • (a) come from an employer with characteristics similar to its own — or, in the case of a pay equity committee choosing job classes, those of the relevant employer — such as the following:

    • (i) the two employers are part of the same industry,

    • (ii) they operate in regions where the cost of living is similar,

    • (iii) they have a similar number of employees,

    • (iv) they have a similar proportion of unionized employees, and

    • (v) they have similar compensation practices; and

  • (b) are representative of the range of values of work performed in the job classes of that other employer, as determined by the other employer or the pay equity committee established by that employer, as the case may be, under section 41 of the Act.

Marginal note:Determination of value of work

• 20 (1) An employer — or, if a pay equity committee has been established, that committee — must determine the value of the work performed in each predominantly female job class determined under section 35 of the Act and in each predominantly male job class chosen or created under subsection 19(1). The value of the work performed in those predominantly male job classes is to be determined as if the work were performed in the course of the operations of the employer.

• Marginal note:Value already determined

  (2) For greater certainty, an employer or a pay equity committee, as the case may be, may determine that the value of the work performed in each of the predominantly female job classes determined under section 35 of the Act is the value that has already been determined by means of a method that complies with the requirements set out in sections 21 and 22.

• Marginal note:Group of job classes

  (3) If an employer or a pay equity committee, as the case may be, treats a group of job classes as a predominantly female job class in accordance with section 38 of the Act, the value of the work performed in that job class is considered to be the value of the work performed in the individual predominantly female job class within the group that has the greatest number of employees.

Marginal note:Criterion

21 The criterion to be applied in determining the value of the work performed is the composite of the skill required to perform the work, the effort required to perform the work, the responsibility required in the performance of the work and the conditions under which the work is performed.

Marginal note:Method

22 In addition, an employer — or, if a pay equity committee has been established, that committee — must, to determine the value of the work performed, use a method that

• (a) does not discriminate on the basis of gender; and

• (b) makes it possible to determine the relative value of the work performed in all of the predominantly female job classes determined under section 35 of the Act and in all of the predominantly male job classes chosen or created under subsection 19(1).

Marginal note:Calculation of compensation

• 23 (1) The employer — or, if a pay equity committee has been established, that committee — must calculate the compensation, expressed in dollars per hour, associated with each job class for which it has determined, under section 20, the value of the work performed.

• Marginal note:Compensation plan — job classes chosen

  (2) If the employer or pay equity committee, as the case may be, uses predominantly male job classes chosen under paragraph 19(1)(a), it must make any adaptations necessary in the calculation of any form of compensation other than salary so that the compensation associated with those predominantly male job classes is in accordance with the compensation plan that applies to the employees of the employer.

• Marginal note:Compensation — job classes created

  (3) If the employer or pay equity committee, as the case may be, uses predominantly male job classes created under paragraph 19(1)(b), it must calculate the compensation for full-time work, expressed in dollars per hour, associated with each of those job classes

  • (a) taking into account

    • (i) the elements set out in columns 2 to 5 of Schedule 1 for the typical job class on which the job class that was created is based, and

    • (ii) salaries that are generally accepted as current for positions that have duties and responsibilities similar to those set out in Schedule 1 for the typical job class on which the job class that was created is based, that require experience, education and training similar to those set out in Schedule 1 for that typical job class and that are under employers that, to the extent possible, have similar numbers of employees as the employer and are in the same industry and geographic area as the employer or a geographic area where the cost of living is similar;

  • (b) ensuring that the hourly rate of pay for the job class is not less than

    • (i) in the case of a job class that was created based on the maintenance worker typical job class described in item 1 of Schedule 1, a wage at the minimum hourly rate referred to in section 178 of the Canada Labour Code, without taking into account subsections 178(4) and (5) of that Act, as if the employees in positions in that job class are usually employed in the province in which the employer’s employees are usually employed or, if the employer’s employees are usually employed in more than one province, as if the employees are employed in the province with the highest minimum hourly rate, amongst the provinces in which the employees are usually employed, referred to in subsection 178(2) of that Act,

    • (ii) in the case of a job class that was created based on the technician typical job class described in item 2 of Schedule 1, 1.2 times the minimum hourly rate referred to in subparagraph (i), and

    • (iii) in the case of a job class that was created based on the manager typical job class described in item 3 of Schedule 1, 1.75 times the minimum hourly rate referred to in subparagraph (i); and

  • (c) including all forms of compensation other than salary that the employer would pay for the work performed in the job class if the work were performed in the course of the operations of the employer.

• Marginal note:Group of job classes

  (4) If an employer or a pay equity committee, as the case may be, treats a group of job classes as a predominantly female job class in accordance with section 38 of the Act, the compensation associated with that job class is considered to be the compensation associated with the individual predominantly female job class within the group that has the greatest number of employees.

• Marginal note:Salary — job classes chosen

  (5) If an employer or pay equity committee, as the case may be, uses predominantly male job classes chosen under paragraph 19(1)(a),

  • (a) for the purpose of determining salary in the calculation of the compensation associated with a predominantly female job class, the salary at the highest rate in the range of salary rates for positions in the job class is to be used; and

  • (b) for the purpose of determining salary in the calculation of the compensation associated with a predominantly male job class, the salary at the highest rate in the range of salary rates for positions in the job class, provided by the employer from which the job class was chosen, is to be used.

• Marginal note:Salary — job classes created

  (6) If an employer or pay equity committee, as the case may be, uses predominantly male job classes created under paragraph 19(1)(b), for the purposes of determining salary in the calculation of the compensation associated with a predominantly female job class, the salary at the highest rate in the range of salary rates for positions in the job class is to be used.

• Marginal note:Definition of full-time work

  (7) For the purposes of subsection (3), full-time work means 30 or more hours of work over a period of one week.

Marginal note:Exclusions from compensation

24 An employer — or, if a pay equity committee has been established, that committee — may exclude from the calculation of compensation, with respect to each job class in respect of which compensation is required to be calculated, any form of compensation that is equally available, and provided without discrimination on the basis of gender, in respect of all of those job classes.

Marginal note:Differences in compensation excluded

25 An employer — or, if a pay equity committee has been established, that committee — must exclude from the calculation of compensation associated with a predominantly female job class any differences in compensation that either increase or decrease compensation in any or all positions in that job class as compared with the compensation that would otherwise be associated with the position, if the differences are based on any one or more of the following factors and those factors have been designed and are applied so as not to discriminate on the basis of gender:

• (a) the existence of a system of compensation that is based on seniority or length of service;

• (b) the practice of temporarily maintaining an employee’s compensation following their reclassification or demotion to a position that has a lower rate of compensation until the rate of compensation for the position is equivalent to or greater than the rate of compensation payable to the employee immediately before the reclassification or demotion;

• (c) a shortage of skilled workers that causes an employer to temporarily increase compensation due to its difficulty in recruiting or retaining employees with the requisite skills for positions in a job class;

• (d) the geographic area in which an employee works;

• (e) the fact that an employee is in an employee development or training program and receives compensation at a rate different than that of an employee doing the same work in a position outside the program;

• (f) the non-receipt of compensation — in the form of benefits that have a monetary value — due to the temporary, casual or seasonal nature of a position;

• (g) the existence of a merit-based compensation plan that is based on a system of formal performance ratings and that has been brought to the attention of the employees; or

• (h) the provision of compensation for extra-duty services, including compensation for overtime, shift work, being on call, being called back to work and working or travelling on a day that is not a working day.

Marginal note:Comparison of compensation

26 An employer — or, if a pay equity committee has been established, that committee — that has calculated under section 23 the compensation associated with each job class must, using the compensation so calculated, compare, in accordance with sections 27 to 29, the compensation associated with the predominantly female job classes with the compensation associated with the predominantly male job classes chosen or created under subsection 19(1), for the purpose of determining whether there is any difference in compensation between those job classes.

Marginal note:Compensation comparison methods

27 The comparison of compensation must be made in accordance with the equal average method set out in section 28 or the equal line method set out in section 29.

Marginal note:Equal average method

28 An employer or pay equity committee, as the case may be, that uses the equal average method of comparison of compensation must apply the following rules:

• (a) the average compensation associated with the predominantly female job classes within a band — or, if there is only one such job class within a band, the compensation associated with that job class — is to be compared to

  • (i) if there is more than one predominantly male job class chosen or created under subsection 19(1) within the band, the average compensation associated with those predominantly male job classes within the band,

  • (ii) if there is only one predominantly male job class chosen or created under subsection 19(1) within the band, the compensation associated with that job class, or

  • (iii) if there are no predominantly male job classes chosen or created under subsection 19(1) within the band, the compensation calculated under paragraph (b);

• (b) the compensation for the purpose of subparagraph (a)(iii) is

  • (i) the amount determined by the formula

    (A × B) ÷ C

    where

    A

    is the average compensation associated with the predominantly male job classes chosen or created under subsection 19(1) — or, if there is only one such job class, the compensation associated with that job class — that are within the band that is closest to the band within which the predominantly female job class or classes are located,

    B

    is the average value of the work performed in the predominantly female job classes within the band or, if there is only one such job class, the value of the work performed in that job class, and

    C

    is the average value of the work performed in the predominantly male job classes within the band referred to in the description of A or, if there is only one such job class, the value of the work performed in that job class, or

  • (ii) despite subparagraph (i), if there is at least one predominantly male job class chosen or created under subsection 19(1) within each of two bands that are equidistant from the band within which the predominantly female job class or classes are located and there is no other band containing at least one predominantly male job class that is closer to that band, the amount determined by the formula

    (A + B) ÷ 2

    where

    A

    is the average compensation associated with the predominantly male job classes chosen or created under subsection 19(1) within one of the two bands or, if there is only one such job class, the compensation associated with that job class, and

    B

    is the average compensation associated with the predominantly male job classes chosen or created under subsection 19(1) within the other band or, if there is only one such job class, the compensation associated with that job class;

• (c) the compensation associated with a predominantly female job class within a band is to be increased only if

  • (i) that compensation is lower than the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be, and

  • (ii) the average compensation associated with the predominantly female job classes within the band — or, if there is only one such job class, the compensation associated with that job class — is lower than the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be;

• (d) if the compensation associated with a predominantly female job class within a band is to be increased, the increase is to be determined by multiplying the factor calculated in accordance with section 11 by an amount equal to the difference between the compensation associated with the job class and the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be; and

• (e) an increase in compensation associated with the predominantly female job class or classes within a band is to be made in such a way that, after the increase, the average compensation associated with the predominantly female job classes within the band — or, if there is only one such job class, the compensation associated with that job class — is equal to the compensation or average compensation referred to in subparagraph (a)(i), (ii) or (iii), as the case may be.