Pay equity for Canadian organizations

Equal pay for work of equal value. The concept behind gender-based pay equity is as simple as it is necessary, but getting there ­– and staying there – is easier said than done. Mercer can help.

Beyond compliance: Finding the opportunities in your pay equity plan

Pay equity is a wide-reaching concept that addresses imbalances in compensation based on gender, race, Indigenous status, ability and other identity categories. In Canada, the Pay Equity Act focuses on gender-based pay equity among federally regulated employers, with the aim of helping these organizations identify systemic gaps in their compensation practices. Organizations in Ontario and Québec have to adhere to provincial pay equity legislation as well.

Complying with this legislation isn’t a destination; it’s an ongoing process. Federally regulated employers in Canada need to submit a pay equity plan by September 3, 2024. After the initial submission, remaining compliant involves following through on the plan, fulfilling reporting requirements and undergoing audits.

It can be complex journey. But we can simplify it for you:

  1. Our four-phase process to creating a pay equity plan ensures you follow the right timeline, from establishing an equity committee to calculating compensation for each job class. All the models we build are designed to both meet the immediate needs of compliance and assist in future equity efforts.

  2. Once your plan is submitted, we’ll guide you through the next stages of compliance. Our go-forward strategies can improve upon your current level of compliance and ease the administrative burden that comes along with it.

  3. The data and insights we uncover in the process can help you become even more equitable ­– and competitive – as an employer. We can leverage our compensation models to also identify opportunities for structuring salaries, improving pay transparency and enhancing incentives.

Understanding equity in an evolving workplace


of companies globally say that they address pay equity as part of their compensation strategy.


of organizations have a formal process for remediating pay inequities.

There is more to pay equity than government compliance. A robust equitable pay program can help you address a range of other diversity, equity and inclusion (DEI) needs:

  • Responding to intensifying pressures from governments, activist investors and employees
  • Attracting and retaining top - and diverse - talent by ensuring fair outcomes
  • Assessing pay equity consistently across different geographies
  • Improving pay transparency
Only 31% of Canadian organizations set formal quantitative goals or targets for diversity and inclusion outcomes, compared to 50% globally.

A step-by-step approach to achieving balance

It can be daunting to take the first step toward pay equity compliance. Even though you recognize the necessity and value of the process, the legislative details may seem complex or arcane. Our four-phase approach ensures all requirements are met without losing sight of the reason behind the legislation.

  1. We start our process with the discovery phase, where Mercer experts take a deep dive into your current state and build out the components for an effective pay equity analysis. We’ll help you understand the full breadth of the act’s provisions – and guide you in identifying gaps and opportunities in your compensation strategy.

  2. In the committee phase, we help you identify members for your pay equity committee, train them in their responsibilities and facilitate meetings.

  3. Then, in the analysis phase, we input all the data we’ve collected into models to run our pay equity analysis.

  4. The document preparation phase sees us finalize all the required postings and plans while communicating your efforts to employees and organizational leaders.

This process is undergirded by our methodology for fulfilling the requirements of the Pay Equity Act.

Get our perspective on pay equity to assess where you are in the process and explore ways that Mercer can take you further.

Our methodology for helping you draft a compliant, effective pay equity plan.

Steps to complete your equity pay plan:

  • Understand legislation and confirm approach
  • Commitee setup and activation
  • Identify job classes and determine gender predominance
  • Determine value of work (job evaluation)
  • Calculate compensation for each job class
  • Compare compensation: Equal Average or Equal Line Method
  • Determine when increases are due
  • Post draft Pay Equity Plan

Mercer’s methodology addresses all the aspects of a pay equity plan to ensure it complies with federal legislation. We work with you to: 

  1. Review the legislation and confirm your approach
  2. Set up and activate your committee
  3. Identify job classes and determine gender predominance
  4. Determine the value of work (job evaluation)
  5. Calculate compensation for each job class
  6. Compare compensation: Equal Average or Equal Line method
  7. Determine when increases are due
  8. Post your draft pay equity plan

Provincial legislative support

Pay equity isn’t just a federal requirement. Many businesses and organizations in Ontario and Quebec also have to comply with provincial regulations. If your business has international operations, you may also have to adhere to legislation beyond Canada’s borders.

Mercer offers local expertise on a jurisdiction-by-jurisdiction basis, with a focus on the needs of businesses in Canada’s two largest provinces.

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