On April 1, 2018 Equal Pay for Equal Work, the new section 42 of the Employment Standards Act (ESA) came into force. This was a Bill 148 amendment. You can read more about the big changes Bill 148 has made to the Ontario employment landscape in our previous posts on this topic.
Equal Pay for Equal work expands pay equity from pay equity on the basis of sex, to pay equity on the basis of employment status.
Employers now have to pay employees performing substantially the same kind of work the same rate of pay, regardless of their employment status.
Substantially the same work is not necessarily identical work. Work will be considered “substantially the same” if it requires the same level of skill, ability and responsibility, and is performed in the same establishment and under the same working conditions.
Permitted exceptions to the rule are where a difference in the rate of pay exists on the basis of:
- a seniority system;
- a merit system; or
- a system that measures earnings by quantity or quality of production.
Collective agreements commonly make distinctions to rates of pay on the basis of employment status, and may conflict with this new law. The transition provision at section 42.1(7) of the ESA allows for non-compliant collective agreement provisions to prevail over the legislation until the collective agreement expires, or until January 1, 2020, whichever is earlier.
Employee’s Right to Request a Review
If an employee suspects that they are being paid less than another employee performing substantially the same job, and that they are being paid less due to their employment status, they can request that their employer review their rate of pay.
The employer must then either adjust the employee’s pay (up not down), or, if the employer believes they are justified with respect to the difference in pay, they must respond to the employee setting out their reasons in writing.
Employers must now be in compliance with the law. Wages will need to be adjusted up to remedy any gaps in pay that exist on the basis of employment status. Wages cannot be adjusted down to bring them into line.
If you need help making sure your workplace is Bill 148 compliant contact us.