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Guiding Principles for Interpreting the Pay Equity Act

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Disclaimer: This Guide gives an overview of the minimum requirements of the Pay Equity Act as interpreted by the Pay Equity Office. The interpretations are drawn from our own experiences and by applying the key rulings of the Pay Equity Hearings Tribunal and the courts and is current to the date ​of publication. ​


The following principles underlie the Pay Equity Office's interpretation of the Act. The principles have emerged from an understanding of the law and cases that have been heard by the Tribunal and the courts. Employers should consid​er how these principles apply to their situation and ensure that what they do ​to implement and achieve pay equity is consistent with the intent and structure of the Act.

  • Pay equity is both a fundamental human right and a regulatory labour standard. ​As such, it blends aspects of compensation practices, employment law, labour relations and human rights.​

  • Pay equity in Ontario is a self–managed process. The Act imposes an obligation on every employer to take specific steps to ensure that pay equity exists in their workplace. Employers are responsible for implementing pay equity regardless of whether or not they believe that they have fair compensation or non-discriminatory practices and regardless of whether or not there has been a complaint made.​

  • Pay equity is focused on gender neutrality. The main purpose of the Act is to require employers to compare work in a gender neutral way so that the work done in female-dominated job classes is made as visible as the work done in male-dominated job classes and is compensated accordingly.

  • Pay equity allows for considerable flexibility. Some of the requirements Act are specific and precisely defined and employers must comply strictly with these exact terms. Other requirements are not specifically or precisely defined which means that there is more than one way for employers to meet the requirement. Where the provisions Act are not precise, employers are compliant with the law as long as they make choices that are applied consistently and fall within a reasonable range of outcomes that meet the purpose of the Act.

  • ​Pay equity and collective bargaining. Employers and unions are regularly involved in negotiations around compensation that may or may not have pay equity consequences. The Act prohibits employers or bargaining agents to bargain for, or agree to, compensation practices that, if adopted, would cause a contravention of the general requirement to provide for pay equity.

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