Pay Equity Regulations: AMPs and Technical Fixes

Summary#

This is a proposed change to the federal Pay Equity Regulations published in the Canada Gazette on November 18, 2023. It would add rules for administrative monetary penalties and make technical fixes to how some pay-equity calculations and reporting work. The changes are proposed (not yet law) and are intended to come into force in spring 2024.

What it does#

• Creates a clear process for employers to update a pay equity plan when a workplace has no predominantly male job classes.
• Changes how three “typical” male job classes are priced so they line up with the new federal minimum-wage rules in the Canada Labour Code:
  • the base (maintenance) rate would be the higher of the federal minimum or the applicable provincial minimum;
  • the technician multiplier would be changed to 1.2 times that base; the manager multiplier to 1.75 times that base.
• Requires employers to include more detail in their annual statement to the Pay Equity Commissioner, including:
  • the dollar amount of increases in the hourly rate for each predominantly female job class receiving an increase;
  • the date(s) those hourly increases are paid (or the phased-in schedule); and
  • the number of women in each affected job class.
• Clarifies when groups of employers must post the notice of obligations so each member has time to comply.
• Sets up an administrative monetary penalties (AMPs) system:
  • lists which violations can attract a penalty;
  • groups violations as “minor,” “serious,” or “very serious” and sets penalty ranges by employer size (examples for first violations):
    • workplaces with 10–99 employees: minor $500–1,000, serious $2,000–3,000, very serious $5,000–7,500;
    • larger workplaces have higher ranges (up to $50,000 for the most serious repeat violations in the largest employers);
  • explains how penalties would be calculated using a gravity score (criteria scored roughly −2 to 4 or 0 to 4 depending on the factor);
  • sets rules for serving AMP notices and for what information about penalties may be published.
• Provides an overall cost estimate for the package of changes of $3,905,965 (present value over 10 years). It estimates administrative costs to businesses of $593,999 and compliance costs to the regulator, the Canadian Human Rights Commission (CHRC), of $3,062,479.

Who's affected#

• Employers in federally regulated workplaces with 10 or more employees. This includes firms in:
  • transportation (road, air, rail, maritime),
  • banks,
  • telecommunications and broadcasting,
  • postal services and pipelines,
  • grain handling,
  • Crown corporations and the federal public service,
  • the Royal Canadian Mounted Police (RCMP) and the Canadian Armed Forces.
• The employer-side and union-side members of workplace pay equity committees.
• The Pay Equity Commissioner, who operates from the Canadian Human Rights Commission (CHRC), and the Department of Employment and Social Development, which sponsored the proposal.
• Small federally regulated businesses: the regulatory analysis estimates about 3,584 small businesses would be affected, covering roughly 91,600 employees. The estimated total cost to those small businesses over 10 years is $658,342 (present value), or about $183.69 per business (present value).

Why it matters#

• Employers will need to collect and report more detailed pay data. That may mean modest extra admin work and one-off costs for some businesses. The government estimates the per-small-business impact is small in dollar terms but widespread.
• The AMPs system gives the Commissioner a new, measurable tool to enforce the pay equity rules. That raises the risk of fines for non-compliance and adds an incentive for employers to meet their obligations.
• The extra reporting is meant to let the Commissioner better measure how pay-equity actions affect the gender wage gap. That could lead to clearer public information and stronger enforcement over time.
• Workers in predominately female job classes — especially women from groups that face larger wage gaps — may benefit if the new rules lead to faster or more consistent pay adjustments.
• This is a proposal, not final law. Stakeholders were invited to comment after the November 18, 2023 publication (a 30-day comment period was offered). The details could change before the rules are finalized.