Wage Discrimination

First published on Friday, January 13, 2023

Last updated on Tuesday, October 15, 2024

When you hear the term wage discrimination, most people think of the gender pay gap. However, wage discrimination can affect anyone. It occurs when an employee is paid less based on other protected characteristics under human rights legislation.

In this guide, we’ll explain what wage discrimination is, the gender wage gap, and how to eliminate it in the workplace.

What is Wage Discrimination?

Wage discrimination means paying someone less because of their gender, religion, ethnic origin, or another protected characteristic under human rights legislation. Wage discrimination examples include:

Paying women less than men because of their gender.
Paying women less than other women because of their race.
Paying someone less than others because of their religion.

Wage discrimination based on gender is prevalent across different industries, which include:

Finance and insurance.
Healthcare.
Transportation.
Warehousing.
Non-profits.

Men can also be victims of wage discrimination for the same reasons protected under human right legislation. However, this is less common than the previous examples listed.

It is important that you pay your employees equally for work of equal value. This will protect you from human rights claims for wage discrimination.

What is the Gender Wage Gap? The Gender Wage Gap (“GWG”) is a widely recognized instance of wage discrimination in Canada. The GWG is the difference in pay that men and women receive for the same or similar work.

The GWG is typically greater for racialized women, Indigenous women, and women with disabilities. Various jurisdictions have introduced legislation to combat the GWG in Canada.

What is Canada doing about Wage Discrimination?

As an employer, you must familiarize yourself with the applicable federal or provincial laws surrounding equal pay to avoid wage discrimination in your business.

Federal Wage Discrimination Laws

In 2018, the federal government of Canada passed the Pay Equity Act, which came into force on August 31, 2021. This legislation introduces a new proactive pay equity process for federally regulated workplaces with ten employees or more. Federal workplaces include:

Air transportation such as airports and airlines.
Television and broadcast companies.
Banks.

The central premise of this legislation is to require employers to establish and update pay equity practices within their workplaces. Employers must:

Identify the different job classes made up of positions in their workplace;
Determine whether each job class is predominantly male, predominantly female or gender neutral;
Determine the value of work of each predominantly female or male job class;
Calculate the compensation of each predominantly female or male job class; and,
Draw a compensation between predominantly female and male job classes doing work of equal or comparable value.

Employers are required to ensure pay equity within their workplace and close any gaps in pay between genders.

Provincial Wage Discrimination Laws

Let's discuss the wage discrimination laws for different provinces.

Alberta

The Alberta Human Rights Act states that where employees of both sexes perform the same or similar work for an employer, they must receive the same rate of pay.

Employers may be able to pay employees doing the same role different wages if the reason isn’t based on gender. For example, an employer may pay a female employee more than a male because of her experience and education.

British Columbia

British Columbia does not have legislation in place to deal with pay equity between genders.

However, if an employee is paid less because of their gender, they may commence a complaint under human rights legislation. This is because paying an employee less solely because of their gender is considered discrimination.

Ontario

The Ontario Pay Equity Act ensures that employers pay women and men equal pay for work of equal value. This means that men and women must receive equal pay for performing jobs that may be very different but are of equal or comparable value to the company.

Employers may pay women and men differently when performing work of equal value if the employer has an established seniority system, merit system, or measures the quality or quantity of the work completed.

Manitoba

The Manitoba Pay Equity Act ensures that employers in Manitoba pay women and men equal pay for work of equal value. Employers must pay women and men equally based on skill, effort, responsibility and working conditions.

Saskatchewan

Like British Columbia, the province of Saskatchewan has not implemented equal pay legislation. However, the Saskatchewan Human Rights Code prevents employers from paying women and men differently because of their gender. Employers may pay women and men differently based on a seniority system or a through a measure of productivity.

Employers should ensure that wages paid to employees are based on objective criteria such as an employee's seniority, performance, skill requirements, and responsibility levels.

New Brunswick

The New Brunswick Employment Standards Act states that no employer shall pay an employee less than their coworkers based on sex for work that:

Is performed in the same establishment.
Is substantially the same in nature.
Requires the same effort, skills, and responsibilities.
Is performed under similar working conditions.

Just like other provinces, employers may pay women and men different based on a seniority system or a through a measure of productivity.

Nova Scotia

The Nova Scotia Pay Equity Act bars employers from paying employees less than others for doing similar work. Like other provinces, employers may pay employees different wages if there is an established seniority or merit system, or measures in place that monitor the employee’s quantity or quality of work.

Newfoundland & Labrador

The province of Newfoundland & Labrador is in the process of passing legislation regarding pay equity and pay transparency. However, pay equity only applies to public sector employers and not private.

As it stands, there is no pay equity legislation for most employers. However, employers must not pay employees different because of a protected characteristic under human rights legislation.

How Can We Eliminate Wage Discrimination in the Workplace?

Under human rights and pay equity legislation, you have a responsibility to create an inclusive workplace, free from discrimination.

It is important to prevent and eliminate any instances of wage discrimination in the workplace. Here are a few tips that you can implement in your business to help eliminate and prevent wage discrimination.

Understand the law: Familiarize yourself with the applicable laws regarding equal pay to avoid wage discrimination.
Implement policies prohibiting wage discrimination: You should implement policies that protect employees from being discriminated against in the workplace. This includes paying employees differently based on a protected ground under human rights legislation.
Make decisions based on skills and performance: It is important to use objective criteria when determining staff wages. You should aim to put together a suitable compensation package by assessing an employee’s skills, education, and experience. It is illegal to consider a worker’s gender, race, age, or other protected ground when determining wages.
Train and educate managers: Most employees will ask for a raise from their managers. Therefore, it is important to train and educate managers on how to effectively handle raise requests. Managers should refrain from taking into account their personal feelings and focus on the performance of the employee when determining if a raise is appropriate.

Get Advice on Wage Discrimination with BrightHR

Wage discrimination continues to be a problem in many Canadian workplaces. It is important that you review existing policies and procedures regarding wages to ensure that employees are not being discriminated against.

You should also ensure that when assessing wages, you maintain objectivity and avoid using bias such as personal preferences.

If you need assistance with developing strategies to assess wages or requirements to implement transparent policies about wages to your employees, our BrightAdvice service allows you to receive quality advice on any employment issues you may have.