Canada Gazette, Part I, Volume 157, Number 46: Regulations Amending the Pay Equity Regulations (Administrative Monetary Penalties and Technical Amendments)

November 18, 2023

Statutory authority
Pay Equity Act

Sponsoring department
Department of Employment and Social Development

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Pay Equity Act (Act) and Pay Equity Regulations (Regulations) require that employers in federally regulated workplaces with 10 or more employees proactively examine their compensation practices and ensure that workers in predominantly female job classes receive equal pay for work of equal value. The regime is administered and enforced by the Pay Equity Commissioner (Commissioner), who is a member of the Canadian Human Rights Commission (CHRC).

Since the coming into force of the Act and the Regulations in 2021, a number of issues have been identified related to implementation. While the Act requires employers or pay equity committees to establish and proactively update their pay equity plan, the Regulations are silent about how to update a plan if the employer has no predominantly male job classes. Additionally, the Regulations do not align with the Canada Labour Code (Code) provisions regarding minimum wages for federally regulated workplaces, complicating the calculation of hourly rates of pay for typical job classes. While employers are required to submit annual statements about the implementation of pay equity in their workplaces, there is no requirement to provide information about increases to the hourly rate of pay owed to female job classes receiving an increase in compensation, making it difficult to assess the impacts on the gender wage gap. There is also a lack of clarity regarding the deadlines for some groups of employers to post the notice of obligations, which could inadvertently lead to violations. Finally, the current pay equity regime does not include regulatory provisions to operationalize an administrative monetary penalties (AMPs) system. Without a system of AMPs, the Commissioner would not have all the potential tools available to address non-compliance with the pay equity regime.

The Regulations Amending the Pay Equity Regulations (Administrative Monetary Penalties and Technical Amendments) (the proposed Regulations) are intended to address these issues and to support the implementation of the pay equity regime.

Background

Pay equity regime

Pay equity is the concept of equal pay for work of equal value. It addresses systemic discrimination in compensation systems resulting from the undervaluation of work traditionally performed by women. Together, the Act and Regulations direct federally regulated public and private sector employers with ten or more employees to take proactive steps to ensure they are providing equal pay for work of equal value. Employers regulated under the Act include private sector employers in the following sectors: transportation (road, air, rail, maritime); banks; telecommunications and broadcasting; postal and pipelines; grain handling; as well as federal Crown corporations, the federal public service, the Royal Canadian Mounted Police and the Canadian Armed Forces.

Under the Act, employers must develop and implement a pay equity plan for their workplace. Employers who have been subject to the Act since it came into force in August 2021 must develop and post a pay equity plan by September 3, 2024. The Act requires employers with more than 100 employees and employers with 10 to 99 employees, any of whom are unionized, to form a pay equity committee made up of employer and employee representatives. This committee will be responsible for developing and updating the pay equity plan. Employers with 10 to 99 employees, with no unionized employees, can develop and implement a pay equity plan without having to establish a pay equity committee, although they can choose to form a committee voluntarily.

The process for updating pay equity plans

Under the Act, employers or pay equity committees are required to update the pay equity plan at least every five years to identify and correct any pay gaps that emerge since the initial posting of the plan. The Act and Regulations set out a three-step process that employers and pay equity committees must follow to update their pay equity plan: (1) collecting data; (2) analyzing workplace information; and (3) comparing compensation.

The Regulations require employers and pay equity committees to collect data in the form of snapshots, and to use them as the basis of the pay equity analysis. A snapshot is a point-in-time data set (e.g. gender predominance of a job class, compensation of a job class) that the Regulations deem to be representative of the workplace for a one-year period. Under the Regulations, the last snapshot used to develop the updated pay equity plan is considered representative of the workplace for the period between the date that the preceding snapshot was taken and the date that the updated plan is posted.

Employers or pay equity committees must then carry out a pay equity analysis of the data collected in each snapshot to identify any changes that are likely to have impacted pay equity since the more recent of the posting date of the initial or most recently updated plan or the previous snapshot.

Lastly, employers or pay equity committees must conduct a comparison of compensation to identify and measure the size of any pay equity gap.

Calculating the hourly rates of pay for a “typical job class”

The Regulations permit employers or pay equity committees of workplaces with no predominantly male job classes to choose between two methods when establishing their pay equity plans: the proxy method and the typical job class method. The proxy method requires that employers or pay equity committees select three or more predominantly male job classes from another organization or business covered by the Act to develop proxy male job classes in their plan. The typical job class method requires that employers create three fictional predominantly male job classes using the rules established in the Regulations.

The Regulations prescribe the methods to determine the minimum hourly rate of pay for each of the three fictional job classes under the typical job class method. The methods for the three fictional job classes are

The Regulations are currently silent on how to update pay equity plans where workplaces have no predominately male job classes.

Annual statement requirements

Employers are required to submit annual statements to the Commissioner with information on their pay equity plans, which enables the Commissioner to assess the implementation of the pay equity regime in federally regulated workplaces. Information that must be provided includes, but is not limited to:

While the current annual statement requirements collect certain information on increases to compensation owed to female job classes, they do not require employers to indicate what portion of the increase in compensation is due to increases to the hourly rate of pay owed to each predominantly female job class receiving an increase in compensation as opposed to non-pay benefits such as health or life insurance.

Posting the notice of obligation for groups of employers

The Act provides that two or more employers may apply to the Commissioner to be recognized as a group of employers under the Act, allowing them to develop a single pay equity plan as a group. When the Commissioner chooses to recognize the group of employers, the Act requires that the Commissioner must choose the day on which the group becomes subject to the Act. The day must be after one of the employers in the group became subject to the Act and is the earliest day that would give the group sufficient time to meet their obligations under the Act.

Under sections 14 and 15 of the Act, employers and groups of employers must post a notice of their obligations under the Act. Sections 7 and 8 of the Regulations further specify that the posting must be made within 60 days after the day that they become subject to the Act. This notice includes information related to the employer’s responsibility to establish a pay equity plan and, as applicable, a pay equity committee, including the requirements for pay equity committee membership and the process for selecting or appointing its members. If the Commissioner sets a date that the group of employers becomes subject to the Act that is more than 60 days before the day the Commissioner approved a group’s application, the group of employers would be in violation of the requirement to post their notice of obligations within 60 days after the day that they become subject to the Act.

Administrative monetary penalties

The Act provides the Commissioner with powers to encourage compliance with the pay equity regime, including issuing notices of violation to parties who fail to comply with a provision of the Act or the Regulations or who contravene an order. The Act sets out that if the Commissioner has reasonable grounds to believe that a designated provision has been violated, the Commissioner may issue a notice of violation. The Act also prescribes the information that must be included in the notice of violation.

The Commissioner is empowered to conduct enforcement activities to verify compliance with the Act and Regulations, including responding to complaints and conducting investigations and compliance audits. These enforcement activities will be undertaken by the CHRC for the Commissioner, as required to ensure compliance, either reactively in response to a complaint, or proactively based on the discretion of the Commissioner.

The Act also provides authority for the Governor in Council to make regulations with respect to specific aspects of the AMPs system, including designating contraventions of certain provisions of the Act and Regulations as violations, specifying the method of determining the amount of a penalty to be issued, and setting out other procedural details, such as how documents will be served.

The Act sets out the following maximum penalties for violations:

There have not been any regulations published to date regarding the AMPs provisions under the Act.

Under section 131 of the Act, the employer or bargaining agent is liable for violations committed by their employees, agents or mandataries acting in the course of their employment. This applies to employees who are pay equity committee members and who, under subsection 22(3) of the Act, are deemed to be at work when doing work of the committee.

Objective

The proposed Regulations have the following objectives:

  1. Establish the process for updating pay equity plans in workplaces that have determined there are no predominantly male job classes;
  2. Ensure alignment between the Regulations and the federal minimum wage requirements under the Code if employers without predominately male job classes use typical job classes as a basis for analysis;
  3. Require the submission of additional information to better measure the impact of the pay equity regime on the gender wage gap;
  4. Ensure that each employer within a group of employers can comply with the posting deadline for a group of employers’ notice of obligations as set out in the Act; and
  5. Operationalize the AMPs system set out in the Act.

Description

Establish a process for updating pay equity plans in workplaces with no predominantly male job classes

In order to update their pay equity plans, the proposed Regulations would require employers and pay equity committees of workplaces with no predominantly male job classes to: (1) collect workplace data; (2) analyze workplace information; and (3) compare compensation. This process is based on the existing process under the Regulations to establish the initial pay equity plan in workplaces with no predominantly male job classes.

Revise the rules for calculating the hourly rates of pay for a “typical job class”

The proposed Regulations would change the method for determining the rates of pay for the typical job classes to ensure alignment with the 2021 amendments to the Code. Employers regulated under Part III of the Code are required to pay their employees the higher of either the provincial minimum wage in the province where the employee is usually employed, or the new federal minimum wage.

The method to calculate the minimum hourly rates of pay for the maintenance worker job class would be changed to be the greater of either the federal minimum wage or the applicable provincial minimum wage. The applicable provincial minimum wage is determined as either the provincial minimum where an employer’s employees are usually employed or, if the employer’s employees work in more than one province, the highest provincial minimum wage amongst the provinces where they work.

The proposed Regulations would also lower the multipliers from 2.5 times to 1.2 times for the technician job class and from 3.33 times to 1.75 times for the manager job class, because when the new federal minimum wage rule under the Code is applied to the current multipliers for the technician and manager job classes, the result is a higher fictional wage than real wages currently paid to federally regulated employees in similar sectors.

While this proposed change would ensure that employers could not use a rate of wages less than the minimum wage to calculate the pay of a typical job class, it would not impact pay increases for the predominately female job classes against which the typical job class would be compared. This is because existing employees must already be paid at least the federal minimum wage for employers subject to Part III of the Code or are already paid at least the federal minimum wage for employers who are subject to the Act but not Part III of the Code.

Require additional information in the annual statement

To better equip the Commissioner to determine the impact of the pay equity regime on the gender wage gap, employers would be required to submit the following additional information as part of their annual statements:

This information would enable the Commissioner to isolate and compare changes to female job classes’ hourly rates of pay. It would exclude pensions, as well as other payments and benefits received from the employer, from the calculation of compensation.

Amend the posting deadline for a group of employers to post their notice of obligations

The proposed Regulations would establish new criteria as to when a group of employers must post their notice of obligations. Under the proposed Regulations, a group of employers that becomes subject to the Act less than 60 days after they are recognized by the Commissioner as a group of employers would be required to post their notice within 60 days of being recognized. A group of employers that becomes subject to the Act 60 days or more after they are recognized by the Commissioner as a group of employers would be required to post their notice by the day that they become subject to the Act.

This would ensure that each employer in a group of employers has adequate time to post the notice of obligations within their workplaces, and that employees receive the notice in a timely manner.

Establish an administrative monetary penalties system

The proposed Regulations would establish a framework for issuing AMPs in relation to designated provisions of the Act and Regulations with specified penalty ranges that take into account the size of the workplace and compliance history.

Designation of violations

The proposed Regulations would designate violations under the Act and Regulations. Only designated violations would be subject to an AMP. Designated violations — listed in the schedules to the proposed Regulations — include contraventions of

Most of the obligations under the Act and Regulations relate to employers, though some obligations also apply to bargaining agents or other persons.

Method used to determine the amount of an AMP

The proposed Regulations would specify the method of determining the amount of an AMP in any given situation. The baseline penalty amount applicable to a violation would vary depending on the type of violation and the category of violator. Each designated violation would be classified as “minor,” “serious” or “very serious” based on the relative severity of the impact of non-compliance on the following factors:

Provisions related to obligations such as posting notices, submitting annual statements, or other administrative provisions would be categorized as minor. Provisions that set out key obligations in the pay equity process, such as requirements to establish a pay equity committee or to post a final pay equity plan, or require compliance with an order of the Commissioner, would be categorized as serious. The classification of very serious would be reserved for the violation of provisions that prevent the Commissioner from administering and enforcing the Act, such as obstructing the work of the Commissioner, or actions that have been taken that harm employees’ interests – such as reducing pay to achieve pay equity, or where there have been acts of reprisal for participation in the pay equity process.

The penalty range for a violation is determined by the role of the party who committed the violation, with different penalty ranges established for different sizes of workplaces, associated bargaining agents, and other persons. Within each category, the penalty range can also vary based on the classification of the violation and the compliance history of the party that has committed the violation.

The Commissioner would determine penalty amounts within the applicable range on a case-by-case basis, using a list of aggravating and mitigating criteria to assess the gravity of the incidence of non-compliance. Each gravity criterion would be assessed on a point scale. The sum of the points assessed for all of the gravity criteria would be the gravity value. The gravity value would be used as part of a formula to determine the penalty amount that would apply within the applicable penalty range.

Table 1.A: Penalty ranges applicable in workplaces with 10-99 employees and individuals (all amounts in $ CAD)
Classification First violation Second violation Third and subsequent violations
Minor 500 to 1,000 1,000 to 1,500 1,500 to 2,500
Serious 2,000 to 3,000 3,000 to 4,500 4,500 to 7,000
Very serious 5,000 to 7,500 7,500 to 12,000 12,000 to 30,000
Table 1.B: Penalty ranges applicable in workplaces with 100-499 employees (all amounts in $ CAD)
Classification First violation Second violation Third and subsequent violations
Minor 1,000 to 1,500 1,500 to 2,500 2,500 to 4,000
Serious 3,000 to 4,500 4,500 to 7,000 7,000 to 10,500
Very serious 8,000 to 12,000 12,000 to 18,000 18,000 to 40,000
Table 1.C: Penalty ranges applicable in workplaces with 500+ employees (all amounts in $ CAD)
Classification First violation Second violation Third and subsequent violations
Minor 3,000 to 4,500 4,500 to 7,000 7,000 to 10,500
Serious 9,000 to 13,500 13,500 to 20,000 20,000 to 30,000
Very serious 18,000 to 27,000 27,000 to 40,500 40,500 to 50,000
Table 2: Gravity criteria and point values
Level Gravity criterion Point value
1 The degree of negligence of the violating party 0 to 4
2 The degree to which the violating party might derive strategic or economic advantage from continued non-compliance 0 to 4
3 Demonstrated disregard for the authority of the Commissioner 0 to 4
4 The manner in which the violation came to the Commissioner’s attention −2 to 4
5 The steps taken to mitigate or reverse the harm done by the violation −2 to 4
Service of documents in relation to AMPs

The proposed Regulations would establish requirements for the service of documents related to AMPs, including notices of violation and any review decision by the Commissioner. Service would be made to employers, groups of employers, and bargaining agents by

Similarly, service would be made to persons by

The proposed Regulations would also set requirements for substitutional service and for establishing proof of service.

Additional information that may be published in relation to AMPs

The Act allows for the names and information regarding employers, employers within groups of employers or bargaining agents who have received an AMP to be made publicly available. Naming of violators provides an incentive for employers and bargaining agents to comply with the Act. Violators may only be identified once a penalty imposed under the AMPs system is final – meaning it has been paid, or all review provisions under the Act have been exhausted.

The proposed Regulations would expand the categories of information that may be published in order to further deter non-compliance. This additional information would include, the city and province where the violator is located, the nature of the order in the case of a violation resulting from non-compliance with an order, the date on which the period to file a request for review either elapsed or a review decision was made, whether compliance was achieved and the date, whether the set penalty was paid and the date and whether the payment is in default.

Regulatory development

Consultation

In developing the proposed Regulations, the Labour Program consulted with employer and employee representatives, union representatives, national Indigenous organizations, industry experts and advocacy experts through a survey on the proposed AMPs regime with the option to provide additional comments, if desired. A discussion paper was also sent to stakeholders asking detailed questions on the proposed AMPs regime and on the other areas addressed in the proposed Regulations, including the proposal to update information required to be provided in annual statements to the Commissioner and the proposal to establish a process for updating pay equity plans for employers with no predominantly male job classes. Both the discussion paper and survey were sent out in May 2022 with responses requested by June 2022.

Of the 210 stakeholder organizations who were invited to participate in the survey and discussion paper consultations, thirty-five completed the survey, including employers, employer organizations, employees, and unions, with 28 stakeholders providing comments as well as answering the questions. In addition, 10 stakeholders provided written submissions on the discussion paper.

Stakeholder feedback was positive overall. Employer and employee representatives were generally in favour of the initiative and supportive of the new compliance and enforcement tools. Related to AMPs, the majority of employer and employee representatives agreed with offering a penalty range for violations, and that penalty amounts should be determined on a case-by-case basis using prescribed gravity criteria. Employers advocated for clear and transparent rules and emphasized the need for communication and education by the Commissioner before an AMP is issued. Employee representatives generally expressed that the proposed penalty amounts were sufficient, however, some representatives expressed concern that penalty ranges were too low to deter large employers from undertaking repeated violations.

Some employers also expressed concern that the new annual statement requirements could increase their administrative burden should the requirements be expanded through the proposed Regulations. There was no employer or employee feedback received on the other measures.

The proposed Regulations are based on stakeholder feedback from the consultations. Related to AMPs, the proposed provisions establish penalty ranges for minor, serious or very serious violations that take into account employer size and compliance history. They also define gravity criteria that describe factors the Commissioner would take into consideration when determining the penalty amount for a specific violation.

The proposed Regulations respond to employer concerns regarding the potential administrative burden of additional statement requirements by limiting the new required information to (1) the dollar amount of the increase in the hourly rate of pay provided to female job classes receiving an increase in compensation; (2) the date or dates that the increases in the hourly rate of pay were made; and (3) the number of women holding positions in the female job class receiving increases.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, a modern treaty implications assessment was conducted. There have been no impacts on modern treaties identified in relation to these proposed Regulations.

Indigenous-owned federally regulated private-sector businesses are subject to the Act. Therefore, national Indigenous organizations and Indigenous-owned federally regulated businesses were invited by email to provide feedback on the discussion paper and take part in the online survey. No written submissions or survey responses were received from stakeholders representing Indigenous organizations.

The Act provides that employers who are Indigenous governing bodies (IGBs) are excluded from the application of the Act until a date specified by the Governor in Council. The proposed Regulations will therefore not affect these employers at this time. A collaborative engagement process has been initiated with Indigenous partners to collect their views on the Act itself and see how it can be tailored to ensure positive results in an Indigenous context.

Instrument choice

The proposed Regulations are necessary to make technical amendments to the Regulations and to introduce provisions enabling the use of the AMPs regime to ensure compliance with the requirements of the Act and Regulations. As there is no other instrument (e.g. internal policies or operational policy directives) that could attain the objectives sought, regulatory amendments are required.

Regulatory analysis

Benefits and costs

The costs associated with the proposed Regulations over a 10-year period are estimated at $3,905,965. Of these total costs, $593,999 would be administrative costs borne by businesses, $16,929 would be administrative costs borne by government, $3,062,479 would be compliance costs borne by government and $232,557 would be compliance costs borne by businesses. No costs would be passed on to workers or consumers from the proposed regulatory package.

Benefits

The proposed Regulations would facilitate employers and pay equity committees being able to comply with the requirements set out in the Act within legislated time limits and ensure that the Commissioner has the information required to properly measure the pay equity regime’s impact on the gender wage gap. The proposal would also promote increased compliance with the Act and its Regulations, thereby contributing to reducing the gender wage gap in federally regulated workplaces.

Costs
Table 3: Monetized costs
Impacted stakeholder Description of cost Type of cost Year 1 Year 3 Year 6 Year 10 Total (present value) Annualized value
Industry Updating pay equity plans in workplaces with no predominantly male job classes Compliance $30,096 $18,966 $76,471 $11,811 $232,557 $33,111
Industry Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap Administrative $89,973 $78,586 $45,420 $34,651 $593,999 $84,572
Government (RCMP) Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap Administrative $72 $62 $51 $39 $537 $77
Government (Core public administration) Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap Administrative $1,300 $1,135 $927 $707 $9,770 $1,391
Government (Canadian Armed Forces) Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap Administrative $75 $66 $54 $41 $567 $81
Government (Separate agencies) Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap Administrative $845 $738 $535 $408 $6,056 $862
Government (Canadian Human Rights Commission) Receiving submission of additional information in annual statements to facilitate measuring the impact of the pay equity regime on the gender wage gap Compliance $115,760 $150,811 $123,106 $93,917 $1,240,701 $176,648
Government (Canadian Human Rights Commission) Operationalizing the AMPs system Compliance $544,455 $210,284 $148,246 $60,218 $1,821,779 $259,380
All stakeholders Total costs Compliance $690,311 $380,060 $347,824 $165,946 $3,295,036 $469,139
All stakeholders Total costs Administrative $92,265 $80,588 $46,987 $35,846 $610,929 $86,982
All stakeholders Total costs All $782,576 $460,648 $394,811 $201,792 $3,905,965 $556,122

The time frame for this analysis is 10 years, from 2024–2025 to 2033–2034. Each year’s time frame is April 1 to March 31. All costs are calculated in 2019 price year. To calculate present value (NPV), a discount rate of 7% was used, as recommended by the Canadian Cost-Benefit Analysis Guide for the evaluation of regulations, projects, programs or other government initiatives. The costs appearing below are in 2024 present value terms.

Sources of information for costing

The number of employers and employees were derived from the 2015 Federal Jurisdiction Workplace Survey (FJWS). The 2015 employer counts are used as is. The number of employers in the federally regulated private sector is expected to change very little and there is no reliable way of updating the count. Hourly wage rate estimates were obtained from the 2019 Labour Force Survey (LFS). These wage estimates are based on the proxy for federal jurisdiction employees using four-digit North American Industry Classification System (NAICS) codes for three employer sizes: small (10 to 99 employees), medium (100 to 499 employees) and large (500 or more employees). The hourly wage estimates by federally regulated employers were then multiplied by the weight of each industry to obtain the average hourly wage of employees. The estimated wage rates were then marked up by 25% for non-wage benefits and other overheads (e.g. accommodation). This is the standard overhead proportion used by the Treasury Board Secretariat (TBS). Following this 25% markup, the following 2019 hourly wage estimates were used for the purposes of this analysis: $44 for small companies, $46 for medium-sized companies and $50 for large companies.

The wage estimate for the Canadian Armed Forces was obtained using the four-digit North American Industry Classification System (NAICS) code 9111. This NAICS code comprises establishments of the Canadian Armed Forces and civilian agencies primarily engaged in providing defence services. This wage estimate was marked up by 25% for non-wage benefits and other overheads. Following this markup, a wage of $58 was used. The number of separate federal public service agencies as well as their employee counts is sourced from the Treasury Board Secretariat. A wage of $65 per hour was used for the RCMP, the core public administration, and the separate agencies.

Costs to businesses

Federally regulated private sector employers, including Crown Corporations, are expected to incur costs due to the proposed requirements to update pay equity plans in workplaces with no predominantly male job classes and to provide additional information in their annual statements.

Updating pay equity plans in workplaces with no predominantly male job classes

The proposed Regulations would establish the process for updating pay equity plans for employers or pay equity committees in workplaces where there are no predominantly male job classes.

The costing of this item was completed only for small (10 to 99 employees) and medium-sized businesses (100 to 499 employees), since large companies (500 or more employees) are assumed to have multiple job classes due to their size. For this reason, large companies are not expected to encounter a situation where there are no predominantly male job classes and the cost for large companies to comply is zero.

The costing assumes that 5% of small employers (179 employers) and 2% of medium-sized employers (11 employers) would have no predominantly male job classes.

The cost to employers to familiarize themselves with the regulatory compliance requirements is calculated by assuming that it would take one employee a total of one hour to complete this task in both small and medium-sized employers. This amount of time is then multiplied by the number of small and medium-sized employers with no predominantly male job classes and by the average hourly federal jurisdiction employee wage in each of these two employer size categories.

The costing assumes that employers would review the regulatory requirements in year 1 (2024–2025). The estimated cost to small employers would be $7,876, which is equivalent to a cost of $44 per employer on average, while the cost to medium-sized employers would be $506, which is equivalent to a cost of $46 per employer on average. The total one-time cost to small and medium employers of the time required to familiarize themselves with the regulatory requirements would be $8,382 ($44 per employer on average).

After reviewing the regulatory requirements, employers would have to produce annual snapshots every year, for a total of 10 snapshots over the 10-year period. The cost to employers to produce these 10 snapshots is calculated by assuming that small employers would require a total of 2.5 employee hours to produce a snapshot while medium-sized employers would require a total of 4 employee hours. Employers could opt to spread these hours between more than one employee. These hours were then multiplied by the total number of snapshots (10), the estimated number of small and medium-sized employers with no predominantly male job classes and the average hourly federal jurisdiction employee wage in each of these two employer size categories.

The estimated cost to small employers would be $147,975, or $827 per employer on average, while the cost to medium-sized employers would be $15,211, or $1,383 per employer on average. The total cost to employers to produce these 10 snapshots would be $163,186 ($859 per employer on average).

Employers would also have to apply the proxy method or the typical job class method in year 6 (2029–2030) in order to be able to update their pay equity plan. The costing assumes that 40% of employers (76 employers; 72 small and 4 medium-sized) would use the proxy method while 60% (114 employers, 107 small and 7 medium-sized) would apply the typical job class method.

The cost to employers to apply the proxy method is calculated by assuming that it would take small employers a total of 6 employee hours to apply this method while medium-sized employers would require a total of 9 employee hours. At the same time, small employers would require 1 hour to apply the typical job class method while medium-sized employers would require 1.5 hours. These hours are then multiplied by the number of small and medium-sized employers with no predominantly male job classes that would use each of these methods and the average hourly federal jurisdiction employee wage in each of these two employer size categories.

Small employers applying the proxy method would incur a total cost of $13,552, which is equivalent to a cost of $188 per employer on average, while medium-sized employers would incur a total cost of $1,181, or $295 per employer on average.

At the same time, small employers applying the typical job class method would incur a total cost of $3,357, which is equivalent to $31 per employer on average, while medium-sized employers would face costs of $344, or $49 per employer on average. The total cost to employers to apply these methods would be $18,434 ($97 per employer on average).

Employers would also incur costs for analyzing the first five snapshots and updating their pay equity plans. These costs would also be incurred in year 6 (2029–2030). They are calculated by assuming that it would take small employers a total of seven employee hours to complete this task and medium-sized employers a total of nine employee hours. These hours are then multiplied by the number of small and medium-sized employers with no predominantly male job classes and the average hourly federal jurisdiction employee wage in each of these two employer size categories.

The estimated cost to small employers would be $39,308, or $220 per employer on average, while the cost to medium-sized employers would be $3,247, or $295 per employer on average. The total cost to employers to analyze the first five snapshots and update their pay equity plans would be $42,555 ($224 per employer on average).

The total compliance cost to employers in the federally regulated private sector, including Crown Corporations, of establishing a process for updating pay equity plans where there are no predominantly male job classes is estimated at $232,557 ($1,224 per employer on average). The total cost for small employers would be $212,068 ($1,185 per employer on average), while the total cost to medium-sized employers would be $20,489 ($1,863 per employer on average).

Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap

The proposed Regulations would require that employers in the federally regulated private sector with 10 or more employees submit additional information as part of their annual statements to the Commissioner. Employers without pay adjustments and those with fewer than 10 employees would not need to submit any additional information to the Commissioner.

Employers with 10 or more employees with wage adjustments would need to submit the following information for each job class receiving a wage adjustment:

The costing takes into account the fact that not all employers with 10 or more employees would have pay adjustments when creating and updating their pay equity plan.

Costs for employers with wage adjustments following the creation of a pay equity plan (years 1 to 5)

The costing assumes that all medium-sized (563) and large (197) employers would have wage adjustments following the creation of a pay equity plan. The costing also assumes that 97%, or 3 476 small-sized employers, would have wage adjustments.

The costs to employers associated with the requirement to submit additional information on the date(s) and dollar amounts of hourly pay increases in each year are calculated by assuming that small employers would require a total of 0.25 employee hours to complete this task, medium-sized employers a total of 0.3 employee hours and large employers a total of 0.4 employee hours.

Costs are estimated by multiplying the number of employers with wage adjustments following the creation of their pay equity plan by the total number of employee hours it would take to complete this task and the average hourly federal jurisdiction employee wage. The estimated costs to employers over years 1 to 5 are as follows:

The costing is similar for the calculation of the costs to employers associated with providing the number of women in each job class receiving a wage adjustment. It is assumed that small employers would take 0.2 hours to complete this task, medium-sized employers 0.25 hours and large employers 0.3 hours.

The estimated costs over years 1 to 5 are as follows:

Costs for employers with wage adjustments following the update of a pay equity plan (years 6 to 10)

The costing assumes that 65% of small employers (2 330 employers), 75% of medium-sized employers (422 employers), and 100% of large employers (197 employers) would have wage adjustments following the update of their pay equity plan (years 6 to 10).

The estimated costs to employers associated with submitting information on the date and dollar amounts of hourly pay increases are calculated by assuming that in years 6 to 10, it would take small employers a total of 0.25 employee hours to complete this task, medium-sized employers a total of 0.3 employee hours and large employers a total of 0.4 employee hours.

Costs are estimated by multiplying the number of employers with wage adjustments following the update of their pay equity plan by the number of employee hours it would take to complete this task and the average hourly federal jurisdiction employee wage. The estimated costs over years 6 to 10 are as follows:

For the calculation of the costs to employers of providing the number of women in each job class receiving a wage adjustment, small employers are assumed to take 0.2 hours to complete this task, medium-sized employers 0.25 hours and large employers 0.3 hours. The methodology used to estimate these costs is the same as above.

The estimated costs over years 6 to 10 are as follows:

The total cost to employers associated with submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime is estimated at $593,999. The total cost to small employers is $446,274, the total cost to medium-sized employers is $95,908, while the total cost to large employers is $51,818.

Cost to the federal public service, the RCMP, the Canadian Armed Forces and separate agencies

The core public administration, separate agencies, the RCMP and the Canadian Armed Forces are expected to incur costs due to the proposed requirements to provide additional information in their annual statements. However, they are not expected to incur costs from the requirement to update pay equity plans in workplaces with no predominantly male job classes.

Updating pay equity plans in workplaces with no predominantly male job classes

There are no estimated costs to the core public administration, the RCMP, the Canadian Armed Forces and separate agencies. The core public administration, the RCMP and the Canadian Armed Forces are all large employers that will have multiple job classes due to their size, including some job classes that are predominately male.

Among the 21 separate agencies, 13 are large, three are medium-sized and five are small. Large agencies are expected to have at least one predominately male job class. For the purposes of this cost analysis, it is also assumed that the medium and small agencies have at least one predominately male job class, as it is expected that the gender balance at small and medium sized agencies will mirror the general composition of the federal public service overall.

Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime

Costs to the core public administration and the RCMP

The core public administration and the RCMP are large employers that would likely have wage adjustments following both the creation and update of their pay equity plans. Based on information provided by the Treasury Board of Canada Secretariat – Office of the Chief Human Resources Officer, the submission of this information would be done by an employee at the PE-05 group and level, and this task would require 0.6 employee hours at the RCMP and 10 employee hours at the core public administration. The hours required for the core public administration are higher than for employers in the federally regulated private sector because the Treasury Board of Canada Secretariat would need to compile the information from all the different departments making up the core public administration and then submit the information. Costs are estimated by multiplying the number of employee hours it will take to complete this task by the average hourly wage of an employee at the PE-05 classification. The estimated costs over the 10-year period are as follows:

Providing the number of women in each job class receiving a wage adjustment is assumed to require a total of 0.5 employee hours for the RCMP and 10 employee hours for the core public administration. The estimated costs over the 10-year period are as follows:

Costs to the Canadian Armed Forces

The costing assumes that as a large employer, the Canadian Armed Forces would have wage adjustments following both the creation and update of their pay equity plan. We assume that the Canadian Armed Forces would require 0.7 hours to submit information on the date(s) and dollar amounts of hourly pay increases. The hours required are higher than for large employers in the federally regulated private sector because of the large size of the Canadian Armed Forces. Costs are calculated by multiplying the number of employee hours it will take to complete this task by the average hourly wage in the Canadian Armed Forces. The estimated costs over the 10-year period are $305.

The costing is similar for the calculation of the costs to employers associated with providing the number of women in each job class receiving a wage adjustment. The costing assumes that the Canadian Armed Forces would take 0.6 hours to complete this task. The estimated costs over the 10-year period are $262.

Costs to the separate agencies

The costing assumes that all separate agencies, irrespective of their size, would have wage adjustments following the creation of a pay equity plan. The costs are calculated by assuming that small separate agencies would require 0.25 hours to submit information on the date(s) and dollar amounts of hourly pay increases, medium-sized agencies 0.3 hours and large agencies 0.4 hours. This task would be completed by an employee at the PE-05 group and level. This employee would be paid the same amount irrespective of the size of the separate agency, as there is a common pay scale in the federal public service. Costs are estimated by multiplying the number of agencies with wage adjustments by the number of employee hours it would take to complete this task and the average hourly wage of an employee at the PE-05 classification. The estimated costs to separate agencies over years 1 to 5 are as follows:

The same methodology is used to calculate the cost to separate agencies employers associated with providing the number of women in each job class receiving a wage adjustment. The costing assumes that small agencies would take 0.2 hours to complete this task, medium-sized agencies 0.25 hours and large agencies 0.3 hours. The estimated costs to separate agencies over years 1 to 5 are as follows:

The costing assumes that 60% of small agencies (3 employers), 67% of medium-sized agencies (2 employers), and 100% of large agencies (13 employers) would have wage adjustments following the update of their pay equity plan (years 6 to 10). The assumptions as to the time required to complete each task are the same as for the years following the creation of the pay equity plan. The costs are estimated by multiplying the number of agencies with wage adjustments by the number of employee hours it would take to complete the task and the average hourly wage of a PE-05 employee. The costs associated with submitting information on the date(s) and dollar amounts of hourly pay increases are as follows between years 6 and 10:

The costs associated with providing the number of women in each job class receiving a wage adjustment are as follows:

The overall costs to the core public administration, the RCMP, the Canadian Armed Forces and the separate agencies to submit additional information in the annual statements to the Commissioner are $16,929.

Costs to the CHRC

The CHRC, as a regulator, would incur the costs necessary to implement and enforce the proposed Regulations. These include costs associated with measuring the impact of the pay equity regime on the gender wage gap; operationalizing, implementing, and administering the AMPs system; and updating developing communications strategies to share information about new enforcement measures.

Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime

The CHRC would need to update its reporting system and information portal to capture additional information provided in the annual statements, to process it and to vet it for errors.

The CHRC would also need to build a form that employers will use to submit information. This task would require 20% of a full-time EC-06 employee’s time in the three-month period between April and June 2024, who would also have to work with contractors to ensure that the form and data can be properly integrated into the Portal.

Additionally, once the form is built, another full-time employee (at the EC-07 group and level, 100% of the employee’s time) would be required to receive, analyze and vet the information received for any errors. This employee would use the information submitted by employers for data analysis and research purposes. This employee would be required in the last seven months of year 1 and between years 2 and 10.

Moreover, the information submitted by employers would provide specific details on key elements of the pay equity process and would require the additional time and expertise of a full-time employee (at the EC-06 group and level, 5% of the employee’s time) to assess the meaning of these key elements for the administration and enforcement of the Act. This employee would be required in the last seven months of year 1 and between years 2 and 10.

Information technology support would be required throughout the entire process (at the IT-02 group and level, 20% of a full-time employee’s time). This employee would be required from years 1 to 10.

Based on the employees required and their salaries, the total costs to the CHRC over the entire 10-year period to process the information submitted by employers are estimated at $1,240,701.

Operationalizing the AMPs system

The CHRC would also incur costs as they will need to dedicate some of their compliance and enforcement personnel to the administration of the AMPs system. The costing assumes that the AMPs system would be implemented in the first 9 months of 2024–25. Administration of the system would begin in the last seven months of 2024–25 and continue through the rest of the 10-year period.

Implementation of the AMPs system

The CHRC would need to develop numerous templates, processes, and procedures for the implementation of the AMPs system. AMPs Regulations, including the calculation of penalties is highly complex. The CHRC would require time and resources to develop training materials and deliver training to staff to build internal capacity to implement the system.

Implementation of the AMPs system would require two EC-06 employees (100% FTE), one LP-03 (50% FTE) and one CS-02 employee (100% FTE) in the first 9 months of 2024–2025 to provide legal support and to support with computer systems. Personnel costs for the implementation of the AMPs system, based on the employee’s required and their salaries, are estimated at $344,832.

Administration of the AMPs system

The CHRC would need to dedicate some of their compliance and enforcement personnel to the administration of the AMPs system. This personnel is as follows:

Compliance and enforcement personnel costs would depend on the degree of employer non-compliance. It is assumed that non-compliance would be the highest in the first two years. However, it is anticipated that preliminary indications of violations and compliance orders would progressively incentivize employers to comply. As a result, the compliance rate of employers is expected to gradually rise between years 3 and 5. Employer’s non-compliance rate would rise in the year when pay equity plans are updated (year 6) and would gradually decline afterwards until the next pay equity plan update. As a result of this variation in the compliance rate of employers, the FTEs required would vary from year to year:

Based on the employees required and their salaries, compliance and enforcement personnel costs are estimated at $1,438,771.

Other costs

The CHRC would also incur costs to explore new software and/or upgrade existing software to allow for issuing AMPs. Software costs in 2024–2025 are anticipated at $20,000.

The CHRC would also incur costs to develop a communications strategy to announce the new enforcement measures. Developing this strategy would require 75 hours of an IS-03 employee’s time, 120 hours from an IS-04 employee, 75 hours from an IS-05 employee and 75 hours of an AS-03 employee’s time. Based on the number of employees required and their salaries, the costs to develop the strategy are estimated at $18,175 and would be incurred in year 2024–2025.

Overall costs to the CHRC

The overall costs to the CHRC are anticipated to be $3,062,479 over the ten-year period examined.

Qualitative benefits

Positive impacts

Small business lens

The small business lens applies as there are impacts on federally regulated private sector small businesses associated with the proposed Regulations. As the Act only applies to employers with 10 or more employees, the total number of federally regulated employers affected by the proposed Regulations who are small businesses would be approximately 3 600, employing approximately 91 600 employees. This number does not include employers with over 100 employees, who are not considered small businesses.

The total compliance costs to small businesses associated with updating the pay equity plan when there are no predominantly male job classes would be approximately $212,068 for this 10-year time frame. Of these costs, $7,876 would be associated with familiarizing themselves with the regulatory requirements, $147,975 with producing 10 annual snapshots, $16,909 to apply the proxy method or typical job class method, and $39,308 to analyze the first 5 snapshots and update their pay equity plan. Administrative costs associated with submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap would be approximately $446,274. Small businesses would incur no costs from the implementation of the AMPs system. Overall, the total costs to small businesses associated with the regulations would be $658,342 over the 10-year period. No flexibility in the application of the regulations to small business was provided because updating the pay equity plan is a key part of the pay equity regime and the information provided through the annual statement is required to measure the impact of the regime on the gender wage gap.

Small business lens summary
Table 4: Compliance costs
Activity Annualized Value Present Value
Establish the process for updating pay equity plans where there are no predominantly male job classes $30,194 $212,068
Total compliance cost $30,194 $212,068
Table 5: Administrative costs
Activity Annualized Value Present Value
Submitting additional information in annual statements to the Commissioner to facilitate measuring the impact of the pay equity regime on the gender wage gap $63,539 $446,274
Total administrative cost $63,539 $446,274
Table 6: Total compliance and administrative costs
Totals Annualized Value Present Value
Total cost (all impacted small businesses) $93,733 $658,342
Cost per impacted small business $26.15 $183.69

One-for-one rule

The one-for-one rule applies as there would be an incremental increase in administrative burden on businesses with 10 or more employees who have wage adjustments. The proposed Regulations would impose additional administrative requirements on those employers to provide additional information to the Commissioner in their annual statement and would trigger the one-for-one rule under Element A.

Using the methodology required by the Red Tape Reduction Regulations, it is estimated that the total administrative costs imposed on affected federally regulated private sector employers by the requirement to submit additional information in annual statements to the Commissioner would be $234,959 or $33,453 in annualized terms. Of these costs, $131,040 (or $18,657 annualized) would stem from the requirement to submit information on the date(s) and dollar amount of increases to the hourly rate of pay for each female job class receiving an increase in compensation. Meanwhile, $103,919 ($14,796 annualized) would stem from the requirement to submit information on the number of women in each job class receiving a pay increase.

The proposed Regulations would not trigger Element B for the one-for-one rule as they would not introduce a new regulatory title to the Labour Program’s existing regulatory stock.

Regulatory cooperation and alignment

This regulatory initiative is not part of a formal bilateral agreement.

Ontario and Quebec have had proactive pay equity legislation in place for several decades. Their pay equity regimes were identified as models that would serve as the basis for the development of the federal pay equity regime. The Act was broadly developed using aspects from both provincial regimes and then adapted to fit and serve the federal jurisdiction.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

A gender-based analysis plus analysis was conducted for this regulatory proposal. The analysis suggested that the proposed Regulations would primarily benefit women workers in federally regulated workplaces. More specifically, research indicates that racialized women (including visible minority, immigrant, and Indigenous women,footnote 1 women with disabilities,footnote 2 and women with lower levels of educationfootnote 3 would be likely to disproportionately benefit, as these groups are more likely to face a larger gender wage gap. Because all employees in predominately female job classes would receive the same pay equity increases as women, the proposed Regulations are also expected to benefit men, 2SLGBTQIA+ and gender non-conforming people employed in these job classes.

Implementation, compliance and enforcement, and service standards

Implementation

The proposed Regulations are intended to come into force in spring 2024, to ensure that stakeholders are aware of their new obligations and the penalties of contravening the Act and Regulations. Employers subject to the Act since it came into force will be required to publish their first pay equity plans by September 3, 2024.

The Commissioner, housed in the CHRC, is responsible for administering and enforcing the Act and the Regulations. The Commissioner’s role includes assisting workplace parties in understanding their rights and fulfilling their obligations, including through the development of tools and education materials, investigating complaints, and considering applications, and facilitating the resolution of disputes.

Costs to the CHRC for the proposed regulations will be funded through existing resources earmarked for the establishment and enforcement of the pay equity regime.

Compliance and enforcement

The Commissioner is equipped with a broad range of enforcement tools to encourage compliance, address complaints and settle disputes. These enforcement tools include investigations, proactive audits, order-making powers and the authority to impose AMPs. The proposed Regulations would ensure that the AMPs system is operational.

Contact

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to

Muhammad Ali
Executive Director
Workplace and Labour Relations Policy Division
Labour Program
Department of Employment and Social Development
Place du Portage, Phase II, 10th Floor
165 de l’Hôtel de Ville Street
Gatineau, Quebec
J8X 3X2
Email: ESDC.PayEquity-EquiteSalariale.EDSC@labour-travail.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council proposes to make the annexed Regulations Amending the Pay Equity Regulations (Administrative Monetary Penalties and Technical Amendments) under subsections 127(1) and 181(1) of the Pay Equity Act footnote a.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Muhammad Ali, Executive Director, Workplace and Labour Relations Policy Division, Labour Program, Department of Employment and Social Development, Place du Portage, Phase II, 10th Floor, 165 de l’Hôtel-de-Ville Street, Gatineau, Quebec J8X 3X2 (email: ESDC.PayEquity-EquiteSalariale.EDSC@labour-travail.gc.ca).

Ottawa, November 9, 2023

Wendy Nixon
Assistant Clerk of the Privy Council

Regulations Amending the Pay Equity Regulations (Administrative Monetary Penalties and Technical Amendments)

1 Section 2 of the Pay Equity Regulations footnote 4 is replaced by the following:

References to employers

2 If a group of employers is recognized by the Pay Equity Commissioner as a single employer under section 106 of the Act, every reference in sections 10, 14 and 15, subsection 16(1), sections 18 to 20 and 22, subsections 23(1) to (6) and sections 24 to 26, 28 to 31, 38.1, 39 and 41 to 46.1 to an employer is, in respect of the group of employers, to be read as a reference to that group of employers unless the context otherwise requires.

2 Subsection 8(1) of the Regulations is replaced by the following:

Notice — group of employers’ obligation

8 (1) An employer that is in a group of employers and that is required to post a notice under subsection 15(1) or (2) of the Act must do so

3 Paragraph (c) of the description of B in subsection 11(1) of the French version of the Regulations is replaced by the following:

4 Subparagraphs 23(3)(b)(i) to (iii) of the Regulations are replaced by the following:

5 (1) Paragraph 30(a) of the Regulations is replaced by the following:

(2) Paragraph 30(d) of the Regulations is replaced by the following:

6 Section 32 of the Regulations and the heading before it are repealed.

7 The Regulations are amended by adding the following before section 39:

Choice of method — no predominantly male job classes

38.1 (1) An employer — or, if a pay equity committee has been established, that committee —, other than an employer or pay equity committee referred to in subsection 78(2) of the Act, that has determined that either there are no longer any predominantly male job classes or there continues to not be any predominantly male job classes, must use, to determine differences in compensation for the purposes of subsection 78(1) of the Act,

Criteria

(2) An employer or pay equity committee, as the case may be, choosing job classes provided by another employer under paragraph (1)(a) must, to the extent possible, ensure that those job classes meet the requirements set out in paragraphs 19(3)(a) and (b).

Clarification

(3) For greater certainty, under subsection (1), an employer or pay equity committee, as the case may be, may use job classes other than those used to establish a pay equity plan and may use different job classes with respect to each date for which it must, under section 39, collect information to update that pay equity plan.

8 Section 39 of the Regulations is amended by adding the following after subsection (1):

Other workplace information

(1.1) If, for the purposes of updating a pay equity plan, an employer or pay equity committee referred to in subsection 38.1(1), as the case may be, is using job classes from another employer chosen under paragraph 38.1(1)(a), it must also collect the following information:

9 The Regulations are amended by adding the following after section 41:

No predominantly male job classes

41.1 (1) For the purposes of subsection 78(1) of the Act, the rules, criteria and factors set out in sections 41 to 50 of the Act, as adapted by sections 20 to 29, must be used by the employer or pay equity committee referred to in subsection 38.1(1), with the following modifications:

Factor referred to in paragraph 28(d)

(2) Despite subsection 11(2), in the calculation of the factor referred to in paragraph 28(d), for the purposes of updating a pay equity plan, references in subsection 11(1) to a predominantly male job class are to be read as references to a predominantly male job class chosen or created, as the case may be, under subsection 38.1(1).

Factor referred to in paragraph 29(1)(c)

(3) Despite subsection 12(2), in the calculation of the factor referred to in paragraph 29(1)(c), for the purposes of updating a pay equity plan, a reference in subsection 12(1) to a predominantly male job class is to be read as a reference to a predominantly male job class chosen or created, as the case may be, under subsection 38.1(1).

10 Section 44 of the Regulations is amended by adding the following after subsection (1):

Exception

(1.1) Despite subsection (1), for the purposes of identifying any differences in compensation under subsection 78(1) of the Act, an employer or pay equity committee, as the case may be, referred to in subsection 38.1(1) of the Regulations, must calculate compensation associated with predominantly male job classes in accordance with the rules set out in sections 23 to 25 for each period for which the workplace information that has been collected must be used under section 41, except that the reference to “paragraph 19(1)(a)” in subsections 23(2) and (5) is to be read as a reference to “paragraph 38.1(1)(a)” and the reference to “paragraph 19(1)(b)” in subsections 23(3) and (6) is to be read as a reference to “paragraph 38.1(1)(b)”.

11 Section 45 of the Regulations is renumbered as subsection 45(1) and is amended by adding the following:

Exception

(2) Subsection (1) does not apply with respect to an employer or pay equity committee referred to in subsection 38.1(1).

12 The Regulations are amended by adding the following after section 46:

Supplementary Information to Include in Pay Equity Plan

No predominantly male job class

46.1 If, in carrying out the update of the pay equity plan, the employer — or, if a pay equity committee has been established, that committee — has determined in accordance with section 35 of the Act that there is no predominantly male job class, it must revise the information included in the plan under sections 30 and 31 of these Regulations or, if the plan to be revised does not include that information, add it to the plan.

13 The Regulations are amended by adding the following after section 52:

Confidentiality

Data received from another employer

52.1 (1) Except to identify differences in compensation for the purposes of sections 60 or 78 of the Act and to comply with sections 30 or 46.1 of these Regulations, an employer and each member of a pay equity committee that is, directly or indirectly, provided with data from another employer for the purpose of the identification of those differences must keep that data confidential.

Bargaining agent

(2) A bargaining agent that receives from a member of a pay equity committee data that the member is required under subsection (1) to keep confidential must also keep the data confidential.

14 (1) Subsection 53(1) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding and at the end of paragraph (b) and by adding the following after paragraph (b):

(2) Subsection 53(2) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding and at the end of paragraph (b) and by adding the following after paragraph (b):

15 Section 55 of the Regulations and the heading before it are replaced by the following:

Administrative Monetary Penalties

Violations

Designations

55 The following are designated as violations that may be proceeded with in accordance with Part 7 of the Act:

Classification

56 A violation related to a provision set out in column 1 of Part 1 or 3 of Schedule 2 or an order made or issued under a provision set out in column 1 of Part 2 of Schedule 2 is classified as a minor, serious or very serious violation as set out in column 2 of that Part.

Range — 10 to 99 employees

57 (1) The range of penalties in respect of a violation within a classification set out in column 1 of Part 1 of Schedule 3 is set out in column 2 for a first violation, in column 3 for a second violation and in column 4 for a third or subsequent violation, with respect to a violation committed by

Sum of the averages

(2) For the purposes of paragraph (1)(c)

Range — 100 to 499 employees

(3) The range of penalties in respect of a violation within a classification set out in column 1 of Part 2 of Schedule 3 is set out in column 2 for a first violation, in column 3 for a second violation and in column 4 for a third or subsequent violation, with respect to a violation committed by

Range — 500 employees or more

(4) The range of penalties in respect of a violation within a classification set out in column 1 of Part 3 of Schedule 3 is set out in column 2 for a first violation, in column 3 for a second violation and in column 4 for a third or subsequent violation with, respect to a violation committed by

Average

(5) For the purposes of paragraphs (3)(a) and (4)(a) the average is

Sum of the averages

(6) For the purposes of paragraphs (3)(b) and (4)(b)

Prior violations

(7) For the purposes of subsections (1), (3) and (4), only prior violations that the employer, group of employers or bargaining agent, as the case may be, is deemed or determined to have committed during the 10 years before the day on which the notice of violation is served and that are of the same classification are taken into account.

Range — person referred to in section 130 of the Act

58 (1) The range of penalties in respect of a violation within a classification set out in column 1 of Part 1 of Schedule 3 that is committed by a person referred to in section 130 of the Act is set out in column 2 for a first violation, in column 3 for a second violation and in column 4 for a third or subsequent violation.

Range — employee, agent or mandatary

(2) The range of penalties in respect of a violation of subsection 23(2) or 24(1) or section 99, 100, 101, 102, 103 or 124 of the Act or subsection 52.1(1) of these Regulations or an order made or issued under section 119 or 170 of the Act within a classification set out in column 1 of a Part of Schedule 3 that is committed by an employer’s or bargaining agent’s employee, agent or mandatary in the course of their employment or the scope of their authority as agent or mandatary is

Range — other person

(3) The range of penalties in respect of a violation of subsection 24(1) or section 99, 100, 101 or 124 of the Act or subsection 52.1(1) of these Regulations, within a classification set out in column 1 of Part 1 of Schedule 3 that is committed by a person who is not referred to in subsection (2) or in section 130 of the Act and who is not an employer, a group of employers or a bargaining agent, is set out in column 2 for a first violation, in column 3 for a second violation and in column 4 for a third or subsequent violation.

Prior violations

(4) For the purposes of subsections (1) to (3), only prior violations that the person is deemed or determined to have committed during the 10 years before the day on which the notice of violation is served and that are of the same classification are taken into account.

Determination of penalty amount

59 (1) The amount of the penalty is determined by the formula

((A – B) × C ÷ 20) + B
where
A
is the maximum amount in the applicable penalty range of penalties set out in column 2, 3 or 4, as the case may be, of the applicable Part of Schedule 3;
B
is the minimum amount in the applicable range of penalties set out in column 2, 3 or 4, as the case may be, of the applicable Part of Schedule 3; and
C
is the gravity value.

Gravity value

(2) Subject to subsection (3), for the purpose of subsection (1), the gravity value is the sum of the values from the gravity scale set out in column 2 of the table to this subsection that are ascribed to each of the applicable criteria set out in column 1. A lower or negative gravity value reflects a mitigating factor and a higher or positive gravity value reflects an aggravating factor.

TABLE
Item

Column 1

Criteria

Column 2

Gravity Scale
1 The degree of negligence of the employer, group of employers, bargaining agent or other person 0 to 4
2 The degree to which the employer, group of employers, bargaining agent or other person might derive strategic or economic advantage from a continuing violation 0 to 4
3 The degree to which the employer, group of employers, bargaining agent or other person demonstrated disregard for the authority of the Pay Equity Commissioner 0 to 4
4 The manner in which the violation came to the Pay Equity Commissioner’s attention − 2 to 4
5 The steps taken by the employer, group of employers, bargaining agent or other person to mitigate or reverse the harm done by the violation − 2 to 4

Zero gravity value

(3) If the gravity value would, but for this subsection, be a negative amount, it is deemed to be zero.

Service Authorized or Required Under Part 7 of Act

Service — employer or bargaining agent

60 A document that is required or authorized to be served under Part 7 of the Act on an employer or bargaining agent may be served by

Service — person

61 A document required or authorized to be served under Part 7 of the Act on a person, other than an employer or bargaining agent, may be served

Substitutional service

62 If a document that is required or authorized to be served under Part 7 of the Act cannot reasonably be served in accordance with section 60 or 61, as applicable, it may be served by leaving a copy of it at the employer’s, bargaining agent’s or other person’s last known address or place of business or, in the case of an individual, at the individual’s usual place of residence or workplace.

Proof of service

63 Service referred to in sections 60 and 61 may be proved by

Date of service

64 A document that is required or authorized to be served under Part 7 of the Act is deemed to be served on

Request for Review

Manner

65 A request for review under section 139 of the Act must be made in writing by the party named in the notice of violation or by that party’s authorized representative.

Publication of Information

Other information

66 The following information is prescribed for the purposes of paragraph 146(d) of the Act with respect to an employer, a group of employers or a bargaining agent that is determined under section 142 of the Act, or that is deemed by the Act, to have committed a violation:

16 The schedule to the Regulations is numbered as Schedule 1.

17 Schedule 1 to the Regulations is amended by replacing the references after the heading “SCHEDULE 1” with the following:

(Paragraphs 19(1)(b), 23(3)(a) and (b), 30(a) and 38.1(1)(b))

18 The Regulations are amended by adding, after Schedule 1, the Schedules 2 and 3 set out in the schedule to these Regulations.

19 The Regulations are amended by replacing “the schedule” with “Schedule 1” in the following provisions:

20 The French version of the Regulations is amended by replacing “au titre de” with “aux termes de” in the following provisions:

21 These Regulations come into force on the day on which they are registered.

SCHEDULE

(Section 18)

SCHEDULE 2

(Sections 55 and 56)

Classification of Violations

PART 1

Pay Equity Act
Item

Column 1

Provision

Column 2

Classification
1 12 Serious
2 13 Serious
3 14(1) Minor
4 14(2) Minor
5 15(1) Minor
6 15(2) Minor
7 16(1) Serious
8 17(1) Serious
9 19(1) Minor
10 19(3) Minor
11 21(1) Minor
12 21(2) Minor
13 22(1) Minor
14 22(2) Minor
15 23(1) Serious
16 23(2) Serious
17 24(1) Serious
18 24(2) Serious
19 25 Minor
20 26 Minor
21 27 Minor
22 28 Minor
23 29 Minor
24 30(6) Serious
25 32 Minor
26 35 Minor
27 41(1) Minor
28 43 Minor
29 44(1) Minor
30 46 Minor
31 47 Serious
32 51 Minor
33 52 Serious
34 53(1) Serious
35 53(2) Minor
36 54(2) Minor
37 55(1) Serious
38 55(2) Minor
39 56(1) Minor
40 56(2) Minor
41 57(2)(a) Minor
42 57(2)(b) Serious
43 57(3) Minor
44 60 Serious
45 61(1) Minor
46 61(2)(a) Minor
47 61(2)(b) Serious
48 61(2)(c) Serious
49 61(2)(d) Serious
50 62(1) Serious
51 62(2) Serious
52 62(3) Serious
53 62(4)(b) Minor
54 62(4)(c) Serious
55 62(4)(d) Serious
56 62(4)(e) Serious
57 62(4)(f) Minor
58 62(5) Minor
59 63(2) Serious
60 64 Serious
61 65(1) Minor
62 65(2) Minor
63 66(1) Minor
64 66(2) Minor
65 66(3) Minor
66 67(1) Serious
67 67(4) Minor
68 67(6) Minor
69 68(1) Serious
70 68(4) Minor
71 68(6) Minor
72 73 Minor
73 74 Minor
74 75 Minor
75 76 Minor
76 77 Minor
77 78(1) Serious
78 78(2) Minor
79 79(1) Serious
80 79(2) Serious
81 80 Minor
82 81(1) Minor
83 81(2) Minor
84 82(2) Minor
85 83(1) Serious
86 83(2) Minor
87 84 Minor
88 85(2)(a) Minor
89 85(2)(b) Minor
90 85(3) Minor
91 88(1) Serious
92 88(2) Serious
93 88(3) Serious
94 88(4) Minor
95 88(5) Minor
96 88(6) Minor
97 89(1) Minor
98 89(2) Minor
99 89(3) Minor
100 89(4) Minor
101 90(1)(a) Serious
102 90(1)(b) Serious
103 90(2)(a) Serious
104 90(2)(b) Serious
105 91(2) Serious
106 94(1)(b) Serious
107 97(1) Minor
108 98 Very serious
109 99 Very serious
110 100 Very serious
111 101 Very serious
112 102 Very serious
113 103 Very serious
114 120(4) Serious
115 124 Serious
116 158(2) Minor
117 158(4) Minor

PART 2

Orders Made or Issued Under the Pay Equity Act
Item

Column 1

Provision

Column 2

Classification
1 118(4) Serious
2 119 Serious
3 120(1) Serious
4 158(1)(b) Serious
5 158(3) Serious
6 159(1)(b)(ii) Serious
7 160(1)(b) Serious
8 160(1)(c) Serious
9 170 Serious

PART 3

Pay Equity Regulations
Item

Column 1

Provision

Column 2

Classification
1 3 Minor
2 4 Minor
3 5 Minor
4 6 Minor
5 7(1) Minor
6 7(2) Minor
7 8(1) Minor
8 8(2) Minor
9 9(1) Minor
10 9(2) Minor
11 10 Minor
12 19(1) Minor
13 19(3) Minor
14 20(1) Minor
15 22 Minor
16 23(1) Minor
17 23(2) Minor
18 23(3) Minor
19 26 Serious
20 30 Minor
21 31 Minor
22 33 Minor
23 34 Minor
24 35 Minor
25 36(1) Minor
26 36(2) Minor
27 37(1) Minor
28 37(2) Minor
29 38(1) Minor
30 38(2) Minor
31 38.1(1) Minor
32 38.1(2) Minor
33 41(1) Minor
34 41(2) Minor
35 41(3) Minor
36 42 Minor
37 44(1) Minor
38 44(1.1) Minor
39 44(2) Minor
40 45(1) Minor
41 46.1 Minor
42 47 Minor
43 48 Minor
44 49 Minor
45 50 Serious
46 51 Minor
47 52.1(1) Serious
48 52.1(2) Serious

SCHEDULE 3

(Subsections 57(1), (3) and (4), 58(1) to (3) and 59(1))

Penalties

PART 1

Ranges of Penalties Specified in Subsections 57(1) and 58(1), Paragraph 58(2)(a) and Subsections 58(3) and 59(1) of the Regulations
Item

Column 1

Classification

Column 2

Range of Penalties ($): First Violation

Column 3

Range of Penalties ($): Second Violation

Column 4

Range of Penalties ($): Third or Subsequent Violation
1 Minor 500 to 1,000 1,000 to 1,500 1,500 to 2,500
2 Serious 2,000 to 3,000 3,000 to 4,500 4,500 to 7,000
3 Very serious 5,000 to 7,500 7,500 to 12,000 12,000 to 30,000

PART 2

Ranges of Penalties Specified in Subsection 57(3), Paragraph 58(2)(b) and Subsection 59(1) of the Regulations
Item

Column 1

Classification

Column 2

Range of Penalties ($): First Violation

Column 3

Range of Penalties ($): Second Violation

Column 4

Range of Penalties ($): Third or Subsequent Violation
1 Minor 1,000 to 1,500 1,500 to 2,500 2,500 to 4,000
2 Serious 3,000 to 4,500 4,500 to 7,000 7,000 to 10,500
3 Very serious 8,000 to 12,000 12,000 to 18,000 18,000 to 40,000

PART 3

Ranges of Penalties Specified in Subsection 57(4), Paragraph 58(2)(c) and Subsection 59(1) of the Regulations
Item

Column 1

Classification

Column 2

Range of Penalties ($): First Violation

Column 3

Range of Penalties ($): Second Violation

Column 4

Range of Penalties ($): Third or Subsequent Violation
1 Minor 3,000 to 4,500 4,500 to 7,000 7,000 to 10,500
2 Serious 9,000 to 13,500 13,500 to 20,000 20,000 to 30,000
3 Very serious 18,000 to 27,000 27,000 to 40,500 40,500 to 50,000

Terms of use and Privacy notice

Terms of use

It is your responsibility to ensure that the comments you provide do not:

  • contain personal information
  • contain protected or classified information of the Government of Canada
  • express or incite discrimination on the basis of race, sex, religion, sexual orientation or against any other group protected under the Canadian Human Rights Act or the Canadian Charter of Rights and Freedoms
  • contain hateful, defamatory, or obscene language
  • contain threatening, violent, intimidating or harassing language
  • contain language contrary to any federal, provincial or territorial laws of Canada
  • constitute impersonation, advertising or spam
  • encourage or incite any criminal activity
  • contain external links
  • contain a language other than English or French
  • otherwise violate this notice

The federal institution managing the proposed regulatory change retains the right to review and remove personal information, hate speech, or other information deemed inappropriate for public posting as listed above.

Confidential Business Information should only be posted in the specific Confidential Business Information text box. In general, Confidential Business Information includes information that (i) is not publicly available, (ii) is treated in a confidential manner by the person to whose business the information relates, and (iii) has actual or potential economic value to the person or their competitors because it is not publicly available and whose disclosure would result in financial loss to the person or a material gain to their competitors. Comments that you provide in the Confidential Business Information section that satisfy this description will not be made publicly available. The federal institution managing the proposed regulatory change retains the right to post the comment publicly if it is not deemed to be Confidential Business Information.

Your comments will be posted on the Canada Gazette website for public review. However, you have the right to submit your comments anonymously. If you choose to remain anonymous, your comments will be made public and attributed to an anonymous individual. No other information about you will be made publicly available.

Comments will remain posted on the Canada Gazette website for at least 10 years.

Please note that public email is not secure, if the attachment you wish to send contains sensitive information, please contact the departmental email to discuss ways in which you can transmit sensitive information.

Privacy notice

The information you provide is collected under the authority of the Financial Administration Act, the Department of Public Works and Government Services Act, the Canada–United States–Mexico Agreement Implementation Act,and applicable regulators’ enabling statutes for the purpose of collecting comments related to the proposed regulatory changes. Your comments and documents are collected for the purpose of increasing transparency in the regulatory process and making Government more accessible to Canadians.

Personal information submitted is collected, used, disclosed, retained, and protected from unauthorized persons and/or agencies pursuant to the provisions of the Privacy Act and the Privacy Regulations. Individual names that are submitted will not be posted online but will be kept for contact if needed. The names of organizations that submit comments will be posted online.

Submitted information, including personal information, will be accessible to Public Services and Procurement Canada, who is responsible for the Canada Gazette webpage, and the federal institution managing the proposed regulatory change.

You have the right of access to and correction of your personal information. To seek access or correction of your personal information, contact the Access to Information and Privacy (ATIP) Office of the federal institution managing the proposed regulatory change.

You have the right to file a complaint to the Privacy Commission of Canada regarding any federal institution’s handling of your personal information.

The personal information provided is included in Personal Information Bank PSU 938 Outreach Activities. Individuals requesting access to their personal information under the Privacy Act should submit their request to the appropriate regulator with sufficient information for that federal institution to retrieve their personal information. For individuals who choose to submit comments anonymously, requests for their information may not be reasonably retrievable by the government institution.