Extensions to Post Pay Equity Plans and New Regulations under the Pay Equity Act

?? Amy Gibson, Sarah Carr, Alexsondra Moar

As indicated in our previous blog post, most Canadian federally regulated workplaces with 10 or more employees are required to post their pay equity plans and notice of increases by September 3, 2024 and provide any required increases in compensation on September 4, 2024.

Extensions to Post Pay Equity Plan

An employer can request an extension to post their pay equity plan by submitting a request for authorization to the Pay Equity Commissioner. Such requests can be made through the employer’s Pay Equity Portal.

The Commissioner will only grant the extension request if they are of the opinion that it is “appropriate in the circumstances,” taking into consideration the following:

• Why the employer is unable to complete the final pay equity plan in the legislated time. This includes assessing the amount of time and resources that the employer has already dedicated to the pay equity exercise;
• If the employer has taken genuine and meaningful steps to establish their pay equity plan within the prescribed timeline;
• If it is appropriate to authorize the extension, in light of the purposes and goals of the Pay Equity Act;
• What date the employer proposes to post their final pay equity plan; and
• What is the employer’s plan to complete the remaining work within the proposed extended deadline.

If the Commissioner grants the request, the Commissioner will determine the appropriate time period for posting the pay equity plan.

An employer who submits an extension request to the Commissioner must notify the affected employees and representatives of such extension request and must provide to the Commissioner evidence to confirm that the employees and representatives have been notified.

Should an extension be granted, any compensation increases must nonetheless be paid back to the day after the plan is posted (which is no later than September 4, 2024). Accordingly, in addition to increasing compensation or phasing in increases as of the day after the plan is posted, employers will be required to provide affected employees with a lump sum payment, plus daily interest, for the period of the extension in respect of such increased compensation.

Should an extension not be granted, the legislated deadline (and the associated penalties should such deadline not be met) will continue to apply. Accordingly, employers who submit a request for an extension should nonetheless continue to move their pay equity process forward.

New Regulations under the Pay Equity Act

The Pay Equity Regulations under the Pay Equity Act were recently amended to provide more further guidance to employers in implementing their pay equity plans. The most significant amendments provide clarity on the issuance of administrative monetary penalties.

When in breach of designated violations under the Act and Regulations, employers could be subject to administrative monetary penalties.

The baseline monetary penalty amount applicable to the violation ranges from $500 to $50,000 and varies depending on the categorization of the violation (minor, serious or very serious) and the category of violator (small employer versus large employer).

The Commissioner will determine penalty amounts on a case-by-case basis, using a list of aggravating and mitigating factors to assess the gravity of the incident of non-compliance. Such factors include:

• The degree of negligence of the employer or other person acting in the course of their employment with the employer;
• The degree to which the employer or other person might derive strategic or economic advantage from a continuing violation;
• The degree to which the employer or other person demonstrated disregard for the authority of the Commissioner;
• The manner in which the violation came to the Commissioner’s attention; and
• The steps taken by the employer or other person to mitigate or reverse the harm done by the violation.

Takeaways for employers

The deadline to post the final pay equity is quickly approaching. Employers who do not believe they will meet the legislative requirement to post their final pay equity plan by September 3, 2024 should consider submitting a request to the Commissioner for an extension, recognizing that regardless of whether the request is granted, any compensation increases will apply from September 4, 2024 onward.

Employers who fail to comply with provisions of the Act or Regulations may also be subject to monetary fines of up to $50,000.

To understand more about the potential impact the Act may have on your workplace, or for advice at any stage of the pay equity process, please contact our labour and employment group.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.