“Our company is in the process of acquiring a small competitor that employs mostly female workers whose wage structure is notably different from ours. Can we continue to pay these employees their existing rates?”
“Over the years our company’s job classifications and their corresponding duties have undergone many changes. Our intentions were always noble, but we are beginning to wonder if our wage rates are compliant with pay equity legislation.”
Both federally and provincially regulated employers are obligated to maintain practices that preserve pay equity in the workplace. Ontario Pay Equity legislation, for example, applies to all Ontario employers with 10 or more employees. Legislation requires employers to identify and evaluate job classes using a gender neutral evaluation system, compare compensation for similarly valued job classes and make any adjustments that may be necessary.
New employers with at least 10 employees who are starting businesses must identify and provide for compensation practices that are in immediate compliance with all legislative requirements. Similar obligations arise with the creation of new job classifications. If a business is bought or sold, there are pay equity considerations with respect to outstanding liabilities and the effect of these on the continuing business. As well, identifying pay equity as a priority will help to avoid costly complaints and audits.
In the unionized workplace, there are significant labour relations implications involved in negotiating collective agreements that will not undermine the maintenance of pay equity.
Our lawyers regularly advise on the integration of pay equity with labour relations, human rights and employment standards. We assist employers in all compliance matters, including the preparation and maintenance of pay equity plans as may be required, as well as assisting new employers with the implementation of compensation systems. Where a complaint arises, we provide representation for employers dealing with the complaint.