Bottom Line
On November 25, 2020, the Federal Government published amendments to the Employment Equity
Regulations (the “Regulations“) under the
federal Employment Equity Act (the
“Act“). The amended Regulations
introduce new pay transparency requirements that will come into
force on January 1, 2021. The Act and the
Regulations apply to federally regulated private-sector
employers who employ one hundred or more employees.
Purpose of the Amendments
Each year, federally regulated private-sector employers are
required to file an employment equity report with the federal
Minister of Labour. The amendments introduce modified reporting
obligations that introduce measures to address wage gaps within the
designated groups through the inclusion of new pay transparency
reporting obligations. The measures are part of the Federal
Government’s initiative to assist Canadian workplaces to
“become more just, inclusive, diverse and ultimately more
productive”. Moreover, the measures raise awareness of wage
gaps that affect women, Aboriginal peoples, persons with
disabilities, and members of visible minorities.
Salary Calculation
The most significant changes relate to the calculation of
salaries for reporting purposes. Under the previous regulations,
the calculation of employee salaries was complex and employers
raised concerns about the burden these requirements placed on their
human resources and accounting practices. For simplicity, the
amendments modify the salary calculation and introduce a broader
definition of the term “salary”. The term
“salary” is now defined as:
. remuneration paid for work performed by an employee, before
deductions, in the form of basic pay, pay for piecework, shift
premiums, bonus pay and overtime pay, but does not include
benefits, securities, severance pay or termination pay, vacation
pay, payment in kind, supplementary payments, allowances,
retroactive payments, reimbursements for employment expenses or
compensation for extra-duty services other than overtime pay.
This modification allows employers to collect information that
is more readily available through their human resources and
accounting systems. Further, the modifications facilitate the
determination of hourly rates of pay, bonus pay, and overtime pay
for the purpose of reporting wage, bonus, and overtime pay gaps
within federally regulated private-sector workforces.
In addition to the current list of records, employers are
required to maintain records of every employee’s salary, the
period over which the salary is paid, hours worked, bonus pay,
overtime pay, and overtime hours worked. Employers must also record
each employee’s occupational group classification and the
following information for employees in each designated group:
- the mean and median difference in
hourly rates; - the mean and median difference…
Read More: Federal Government Introduces Amendments To The Employment Equity