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Pay equity: Closing the wage gap

pay equityDespite the dramatic increase of women in the workforce and the existence of pay equity legislation, gender wage inequality remains a persistent problem in Canada. As part of an ongoing study on gender disparity for the Globe and Mail, Statistics Canada reported in March 2016 that a woman working full–time makes 73.5 cents for every dollar a man makes. The article also notes that Canada has the eighth highest gender wage gap among 34 industrial countries according to the Organization for Economic Co–operation and Development.

Similar problems also exist south of the border, where nationally women earn 79 cents for every dollar that men earn according to the United States Census Bureau. However, a new law in Massachusetts is hoping to close this gap in earnings. On August 1, 2016, Bill S.2119 became law, though unfortunately the act will not come into force until July 2018. This new legislation will make it illegal for employers to screen job applicants based on their wage or request their wage as a condition of employment. The act will also ensure that employees are not prohibited from discussing their wages with others and that employers are not able to escape these provisions by contracting out of them with employees. These provisions will hopefully improve transparency in pay structures, but also force employers to evaluate how much they truly believe each position is actually worth instead of basing compensation on what new applicants made at their previous job.

Interestingly, while Canadian provinces have had pay “equity” (i.e. equal pay for work of equal value) legislation in place for decades (see for example Ontario’s Pay Equity Act), the legislation is geared toward implementing pay equity and maintaining it for existing employees. There are no provisions which speak directly to employers asking prospective employees about what they earned at their last job. In theory, if an employer did hire an individual specifically because they did not negotiate a higher wage, this could be subject to an increase in wages as part of the employer’s obligation to maintain pay equity. This likely would take a significant amount of time to discover and remedy, however. As a matter of transparency, this legislation certainly seems like a promising step forward. As more states push to implement legislation like Bill S.2119, perhaps there will be a greater influence here in Canada as well.

You can learn more about this new legislation by reading this article published by the New York Times.

By: Marty Rabinovitch and Alycia Kacala, Summer Law Student

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Devry Smith Frank LLP

Employment and labour lawyers at Devry Smith Frank LLP
Devry Smith Frank LLP (DSF) is the largest full service law firm in Toronto outside of the downtown core. They offer a broad range of legal services to individual, business and corporate clients in most areas of corporate and personal law. Their firm’s employment law group covers a broad spectrum of HR law, including employment and labour law, occupational health & safety, human rights, workers’ compensation and much more.Lawyers at Devry Smith Frank LLP lead by Marty Rabinovitch B.A.H., LL.B. will be covering issues surrounding employment and labour law and human rights on First Reference Talks. They also provide training, seminars and conferences on the above topics. Read more .
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