The federal Pay Equity Act (the “Act”) and its regulations, which came into effect on August 31, 2021, require subject employers to establish and post, as well as to regularly update, a pay equity plan to proactively address gender-based discrimination in compensation. The legislation provides that the pay equity plan must generally be established and posted within three (3) years of the Act coming into force. Nevertheless, employers should note that it is in fact possible to apply for an extension of the posting deadline in appropriate circumstances.
Authorization Requests: Generally
Where an employer or pay equity committee so requests, the Pay Equity Commissioner (the “Commissioner”) may grant permission to modify some of the rules that employers must typically follow in developing a pay equity plan under the Act and its regulations. Where an employer or pay equity committee submits such a request, it is referred to as an Authorization request. The Commissioner is permitted to approve Authorization requests provided they meet certain specified criteria.
Although there are a variety of different things that an employer or pay equity committee may seek in the context of an Authorization request – such as, for example, permission to establish multiple pay equity plans instead of the standard single plan – this article will focus on applications for an extension of the deadline to post a final or updated pay equity plan.
Extension to Post a Pay Equity Plan: The Assessment Process
Where an employer believes that they will need more time than is allotted under the legislation to post a final or updated pay equity plan, they may ask the Commissioner for an extension of the deadline. The Commissioner may approve that request where she believes it is appropriate to do so in the circumstances.
In assessing an application for an extension of the deadline to post a final or updated pay equity plan, the Commissioner will assess the following:
- Why the employer is unable to complete the final pay equity plan under the legislated timeline. This includes assessing the amount of time and resources that the employer has dedicated to the pay equity exercise, taking into account their circumstances.
- If the employer has taken genuine and meaningful steps to establish the pay equity plan under the prescribed timeline.
- If it is appropriate to authorize the extension of the periods for posting the final or revised pay equity plans, in light of the purposes and goals of the Act.
If, in light of these considerations, the Commissioner decides to grant the Authorization request, she will determine the appropriate time frame for posting the pay equity plan in question.
Authorization Requests: The Application Process
Request for Information and Preliminary Assessment
The first step to making an Authorization request, including an application for an extension of the deadline to post a final or updated pay equity plan, is to submit a request for information, which should describe the employer’s intention to file an Authorization request. The Commissioner’s office will then conduct a preliminary assessment of the request.
During the preliminary assessment, a Pay Equity Officer will contact the employer to discuss the request further. This discussion might cover issues including:
- Whether the matter falls within the Commissioner’s mandate or jurisdiction;
- If an early intervention could resolve the situation; or
- If a formal Authorization request is necessary.
If it is ultimately determined that a formal assessment is necessary, the employer will be sent a submission package, as well as provided with specific guidance on how to complete the Authorization request form and on the procedure to follow.
Once it receives an Authorization request, the Commissioner’s office will again contact the employer, this time to confirm the information contained in the application. It will then begin its formal assessment of the Authorization request.
In cases where the Commissioner deems that an oral hearing is necessary for the determination of the matter, one may be convened as part of the assessment process. However, this may not be necessary in all cases.
Following the formal assessment, the Commissioner will issue a decision on the Authorization request. Although the decision is final, it may be subject to judicial review by the Federal Court.
Where the Commissioner’s decision is to grant an extension of the deadline to post a final or updated pay equity plan, the employer will be required to post a notice in the workplace as soon as possible detailing the new deadline. They will also be required to post the final or updated plan by that deadline.
In Our View
Employers who are considering applying for an extension of the deadline to post a final or updated pay equity plan must note that where a plan provides for compensation increases, those compensation increases will still be due the day after the expiry of the three-year deadline, regardless of any extension that might be granted. As a result, where an extension is granted, in addition to increasing compensation or phasing in increases as of the day after the plan is posted, employers will also be required to provide affected employees with a lump sum payment plus compounding daily interest for the period of the extension. Additional guidance on the implementation of compensation increases can be found in the Canadian Human Rights Commission’s Pay Equity Act Legislative Guide.