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Miguel Mangalindan is a Senior Associate Lawyer at Monkhouse Law where he practices Employment, Human Rights and Disability Insurance Law. He was a panelist at Trucking HR Canada’s Mental Health symposium last October, and recently participated as one of the Learning Highway session presenters at Women with Drive, sharing insights on how Bill C-86 will impact you. This week, we invited him to again share his expertise with us through our Blog Series.
On December 13, 2018, the federal government’s Bill C-86, which among other things establishes a new Pay Equity Act, received royal assent. The Act will require federally regulated employers to make sure that employees in female-dominated jobs receive the same level of compensation as those in male-dominated jobs of similar effort, responsibility, skill, and working conditions.
In short, it aims to ensure equal pay for work of equal value.
Who has to comply?
The Pay Equity Act applies to federal workplaces with 10 or more employees. This includes public services; Crown agencies and private companies that operate a federal work, undertaking, or business; and any employer with more than $1 million in federal government contracts.
Employers will have three years to establish a pay equity plan once the Act comes into force, and have to review and update their plan at least once every five years. Different deadlines apply to provincially regulated employers that become subject to the Act due to becoming federally regulated after the Act comes into force.
What is a Pay Equity Plan?
According to the Act, a pay equity plan must do the following:
- Indicate the number of employees and job classes within the workplace;
- Indicate what gender is predominant in each class;
- Evaluate the value of work performed by each job class;
- Identify the compensation associated with each job class and compare female- and male-predominant job classes of similar value;
- Set out the results of the comparison, identifying which female-predominant job classes require an increase in compensation and when those increases are due; and
- Provide information on the dispute-resolution procedure available to employees.
How do you put this plan into action?
In terms of process requirements, there must be a committee that creates the pay equity plan, notice of the plan to all employees, and then implementation. The employer must also maintain pay equity after the initial plan and payouts are made.
The Act specifies the members of the pay equity committee as well as the contents of the plan. It also sets out a formula for how to compare male and female jobs. There are rights of appeal to a new federal Pay Equity Commission that will be part of the Canadian Human Rights Commission.
The federal government has yet to proclaim a date when the Act will come into force but there will be some grace period allowed for implementation.
In the meantime, federally regulated employers should start reviewing their compensation systems and begin the process of planning and implementing pay equity, which will take lots of time, expertise, and resources to do.
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