Pay Transparency Reporting for Employers

Summary#

The final rule titled Regulations Amending the Employment Equity Regulations: SOR/2020-236 changes what employers must report about pay and how they must keep records. It mainly requires federally regulated private-sector employers to provide payroll data that lets the government calculate and publish wage gaps by group. The amendments came into force on January 1, 2021.

What it does#

• Changes the definition of salary so employers report a set of payroll data elements (basic pay, period covered, hours tied to that pay, bonus pay, overtime pay and overtime hours). This lets officials compute hourly rates and wage gaps.
• Requires employers to report new pay-gap measures on their annual forms, including mean and median differences in hourly rates, bonus pay and overtime pay; and the share of employees who received bonus or overtime pay.
• Incorporates Forms 1–6 by reference as the Employment Equity Forms 2021, so the forms can be updated online without changing the regulations text.
• Expands the list of census metropolitan areas used for reporting from the previous limited list to the full set used by Statistics Canada (the Gazette notes there are 35 CMAs as of the 2016 Census).
• Aligns salary bands with Statistics Canada ranges (including a top category $250,000 and over) and revises occupational group schedules (replaces several schedules with updated lists).
• Makes employers use the definitions of the four designated groups from the Employment Equity Act on workforce self-identification questionnaires (to standardize survey data).
• Adds specific record-keeping requirements: employers must retain the payroll elements listed above for each employee.
• Updates how reports are filed and how the government’s reporting system (the Labour Program’s WEIMS) will collect and publish aggregate wage-gap data. The Gazette says an IT project of about $1,000,000 was planned to modify WEIMS and build online publication tools.
• Keeps the old rules in place for completing the 2020 report (so the new requirements affect reporting for later years).

Who's affected#

• Federally regulated private‑sector employers that employ 100 or more people (these employers are already required to file employment equity reports).
• Workers in those workplaces—especially the four designated groups the law tracks: women, Aboriginal peoples, persons with disabilities, and members of visible minorities—because their pay data will be part of the new reporting and public statistics.
• The federal Labour Program and Employment and Social Development Canada, which collect, process and publish the new statistics.
• The changes also adjust how parts of the federal public administration are described in the regulations, though the main new reporting requirements apply to the private sector covered by the Act.

Why it matters#

• The change makes it possible to calculate and publish clearer wage‑gap information (hourly rates, bonus and overtime differences) for federally regulated employers. That can increase public awareness and pressure on employers to fix pay inequalities.
• Employers will likely need to update payroll and HR systems and keep new records. The government estimated upfront and implementation costs (present value) of $1,148,800, with an expected present‑value benefit of $61,400, and a net present value of −$1,087,400 over 10 years (figures are from the Gazette’s regulatory impact analysis).
• The rule protects individual privacy by publishing aggregated statistics rather than individual salaries.
• Practically, employers report each year on June 1 using the prior year’s data; the Gazette explains that, for example, 2021 data would be reported on June 1, 2022. The new rules give employers time to adapt before those reporting deadlines.