September 18, 2018

Formerly, the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”) did not require an employer to compensate a part-time, temporary, casual or contract employee the same as full-time employees doing substantially similar work. Bill 148, which introduced a number of significant updates to the ESA, has changed that.

Effective April 1, 2018, section 42.1 of the ESA now provides that no employer can pay an employee at a rate of pay less than the rate paid to another employee because of a difference in employment status when:

  • they perform substantially the same kind of work in the same establishment;
  • their performance requires substantially the same skill, effort and responsibility; and
  • their work is performed under similar working conditions.

Exceptions exist. For example, rates of pay may differ on the basis of:

  • a seniority system;
  • a merit system;
  • a system that measures earnings by quantity or quality of productions; or
  • any other factor other than sex or employment status.

An example of a “seniority system” exception is an employee who makes more because they have worked for the employer longer than the employee making less. What constitutes a  “merit system” under the legislation will likely be the subject of controversy at common law and will likely require evidence that, among other things, merit criteria are applied equally to all employees.

Importantly, section 42.1 of the ESA also gives an employee the right to request a review of his or her rate of pay. If asked by an employee for a review, the employer is required to conduct that review and either:

(a) adjust the employee’s pay accordingly; or

(b) if the employer disagrees with the employee’s belief, provide a written response to the employee setting out the reasons for the disagreement.

For more information on the Equal Pay for Equal Work provisions of section 42.1 of the ESA, including creation of a Merit System Policy or Pay Review policy, or how to request for a pay review from your employer, contact us.

By Amelia Phillips