Pay equity

A buyer of an employer covered by a pay equity Act may meet a pay equity plan in diligence, so it is worth asking early whether one exists and under which Act. Ontario, Quebec and the federal government each have their own Act; this entry covers only those three.

What the Acts say

• Ontario: the purpose is to redress systemic gender discrimination in compensation for work performed by employees in female job classes (s. 4), and every employer shall establish and maintain compensation practices that provide for pay equity in every establishment (s. 7(1)). The Act applies only to the employers section 3 describes, not to every employer.
• Quebec: the purpose is to redress differences in compensation due to systemic gender discrimination suffered by persons who occupy positions in predominantly female job classes.
• Federal: every employer must establish a pay equity plan in accordance with the Act (s. 12). The federal Act applies to the employers it describes, not to every employer.

When a business is sold

Ontario’s section 13.1 says that if an employer bound by a pay equity plan sells a business, the purchaser shall make the compensation adjustments the plan required for positions the purchaser maintains, on the dates the plan set. If, because of the sale, the seller’s plan or the purchaser’s plan is no longer appropriate, the seller or the purchaser must negotiate a new plan where employees have a bargaining agent, or prepare one where they do not (s. 13.1(2)). The federal Act has its own section on transfers and leases (s. 92). Read the section for the regime that applies, and see what employment liabilities you inherit and successor employer.