FAQ

1. What is pay equity?
2. Is “equal pay for work of equal value” and “equal pay for equal work” the same thing?
3. Is “pay equity” the same as “wage gap”?
4. Do we have pay equity legislation in New Brunswick?
5. Who is subject to the Act?
6. Is there any pay equity legislation for the private sector?
7. How is the value of work determined?
8. What are the steps for implementing pay equity?
9. What if inequities are found?
10. What are pay equity adjustments?
11. Is a pay equity adjustment a wage increase?
12. Can wages be reduced to reflect pay equity adjustments made?
13. Are pay equity adjustments taxable?
14. Will pay equity adjustments apply to all job classes within an organization?
15. What is a pay equity plan?
16. What are the benefits of a pay equity program to employers?
17. What is pay equity not about?

Pay equity is a fundamental human right that is defined by the principle of “equal pay for work of equal value”.

Pay equity addresses the under-valuation of traditional female occupations by comparing the value of jobs that are performed predominantly by women to those predominantly performed by men. If jobs are found to be of comparable value, female jobs and male jobs should be paid the same.

Historically, our society has overlooked the value of work typically performed by women. Because women’s skills are often associated with household duties, employers tend to undervalue the skills that are required in female dominated job classes. For example, manual and repair skills of a mechanic or service personnel are recognized and valued but dexterity skills of a typist or multi-tasking skills of a receptionist are often not.

Because this is deeply rooted in our society and hence built into employment systems (including pay structures), employers sometimes discriminate in what they pay their female workers without knowing it.

The concept of “equal pay for equal work” means that people who perform the same job, or similar work, must be paid the same wage, regardless of their gender. For example, a female janitor and a male janitor in the same establishment should receive the same wages for performing the same work.

Pay equity, on the other hand, refers to the concept of “equal pay for work of equal or comparable value”. It adds an additional dimension to the concept of equal pay for equal work by requiring that jobs within an establishment be compared on the basis of their value.

In other words, pay equity does not limit comparisons to similar work but requires the comparison of very different jobs, such as a female clerical position with a male janitor, or female lab technician position with a male carpenter to determine if they are equal in value. If they are then they must be paid the same.

No. Although the terms wage gap and pay equity are often used interchangeably, they are not the same thing. The term "wage gap" refers to the difference in the average wage between women and men while "pay equity" looks to specifically address the under-valuation of traditional female occupations.

Yes. The Pay Equity Act, 2009 (Act) was passed in June 2009 and came into effect on April 1^st, 2010.

The Act applies to employers within the public service as listed under the First Schedule of the Public Service Labour Relations Act.

Although New Brunswick has no pay equity legislation specific to the private sector, employers within this sector are obligated to provide equal pay for equal work as set out in Section 37.1 of the New Brunswick’s Employment Standards Act.

All federally-regulated employers (regardless of size) must provide for equal pay for work of equal value to employees within the same establishment as outlined in Section 11 of the Canadian Human Rights Act.

For the purpose of pay equity, value of work is determined by taking into account four key factors: skill, effort, responsibilities normally required in the performance of the work and the conditions under which the work is performed.

Pay equity requires employers, employee representatives and employees to fully describe all aspects of female-dominated jobs and male-dominated jobs so that they can be compared and compensated equitably.

The recommended process for implementing pay equity within your organization is:

• Establish a committee or identify the individual responsible for implementing pay equity
• Identify job classes
• Determine gender predominance
• Select a job evaluation method
• Develop job analysis questionnaire(s)
• Develop job descriptions
• Evaluate job classes
• Weighting of factors and sub-factors
• Determine the point value of the factors and sub-factors
• Determine the value of each job class
• Compare the job classes

For a detailed description of each step, please refer to the Pay Equity Guide.

If pay inequities are found to exist, the employer must define the terms and conditions for the payment of pay equity adjustments.

Pay equity adjustments are increments, made over a period of time, to an employee’s hourly rate of pay until pay equity is achieved.

No. A wage increase is usually given for reasons such as a cost of living adjustment, experience, performance, etc. while a pay equity adjustment is for the purpose of correcting pay inequities that were found to exist as a result of a pay equity analysis.

Important – Pay equity adjustments are not meant to replace or affect an employer’s existing pay structure but rather to correct any inequity found in the organization’s compensation practices.

No. The pay equity adjustments are in addition to regular wage increases (i.e. cost of living, work performance, training qualifications, etc.). These adjustments are for the sole purpose of correcting a pay inequity between female-dominated job classes and male-dominated job classes of equal or comparable value. Nor can an employer reduce the wage of male-dominated job classes in order to implement pay equity.

Yes. These adjustments are considered income and form part of the employee’s salary, therefore all the usual deductions apply.

Pay equity focuses on the undervaluation of female-dominated job class. Male job classes or any gender neutral job classes within an organization will see no adjustments in their pay rate. Female-dominated job classes will only receive adjustments if an inequity is found.

A pay equity plan outlines the process and results. It includes information on the job evaluation process, the method of comparison used, and a list of the job classes that were evaluated. The plan also sets a payout schedule for the pay equity adjustments.

Pay equity requires that compensation practices be based on the value of the work and not on the basis of gender, performance or qualifications of the individual doing the job.  Once completed, the employer will benefit by:

• gaining knowledge of the work that is required and how it is valued and paid
• promoting fairness in a company's compensation system
• strengthening employee relations and morale
• increasing recruitment and retention of employees because of a fair compensation package
• improving productivity
• enhancing competitiveness

In addition, the process will help to better understand the jobs within the organization and identify strengths, weaknesses, and ways to improve productivity. It will also help identify other forms of discrimination that represent barriers in engaging employees and attracting a more diverse staff.

It is not about:

• evaluating individual employees or their performance on the job;
• underpaid male jobs or comparisons between two different female job classes (i.e. receptionist and secretary) or two different male job classes (i.e. mechanic and welder);
• comparisons of female and male job classes between different employers;
• setting wages according to market rates of pay;
• women and men in male jobs or gender neutral jobs; or
• employers reducing wages to offset pay equity adjustment.

For more information about pay equity, feel free to contact us at:

Toll Free: (877) 253-0266
[email protected]