Most federally regulated employers are already familiar with the Pay Equity Act.
As organizations head into 2026, many are reviewing existing pay equity plans, preparing for required updates, or realizing their plan hasn’t been touched since it was first created (it happens).
This blog is a practical refresher on what the Act requires, who it applies to, and what employers should be thinking about as they revisit pay equity with fresh eyes.
Why Was the Pay Equity Act Created?
Pay gaps don’t always come from one obvious decision.
More often, they build over time when jobs that are mostly done by women are valued (and paid) less than jobs that are mostly done by men, even when the work is comparable.
The Pay Equity Act (in force since August 31, 2021) was created to change that by requiring employers to proactively review compensation and correct gaps where predominantly female job classes are paid less than male job classes of equal or comparable value.
The goal is simple: pay practices that are fair, transparent, and defensible.
Who Does the Pay Equity Act Apply To?
If your organization is federally regulated and has 10+ employees, the Pay Equity Act applies to you.
That can include:
- Private-sector workplaces like banks, telecom companies, and transportation companies.
- Public-sector workplaces like government departments, the RCMP, or the Canadian Armed Forces.
- Parliamentary institutions like the House of Commons, Senate, and MPs’ offices.
Examples of Federally Regulated Workplaces
- Banks and financial services
- Airlines, airports, and air traffic control
- Shipping, rail, and interprovincial trucking
- Telecom and broadcasting
- Postal services
- Crown corporations like Canada Post, VIA Rail, and CBC/Radio-Canada
Roughly 5,000 employers and 1.4 million employees fall under this Act and need to create compliant pay equity plans.
What’s a Pay Equity Plan?
A pay equity plan is the core requirement of the Act. Think of it as your documented process for confirming whether pay equity gaps exist and what you’ll do to fix them.
Here’s what is involved in creating a pay equity plan:
- Listing all the job types in your workplace and identifying if they are mostly male, mostly female, or gender neutral.
- Figuring out the value of each job based on skill, responsibility, effort, and working conditions.
- Comparing pay for jobs of equal or similar value.
- Fixing gaps by increasing pay for predominantly female jobs that are underpaid.
Deadlines You Can’t Miss
- Create your plan: Within 3 years of being subject to the Act.
- Pay adjustments: Some employers may be eligible to phase-in increases over 3-5 years.
- Review your plan: Every 5 years to maintain fairness and address new gaps.
For many federally regulated employers, this means reviewing your plan in 2026!
Who Makes Sure You Comply?
The Pay Equity Commissioner enforces the law. Their job is to:
- Give guidance and tools
- Help resolve disputes
- Make sure employers follow the rules
As of November 2022, Lori Straznicky is Canada’s Federal Pay Equity Commissioner.
Getting Support
Pay equity work is detailed, technical, and often layered on top of already full plates.
Where employers tend to get stuck isn’t the intent -- it’s knowing where to start, what to prioritize, and how to be confident the work will stand up over time.
At Envol, we act as a steady, practical partner through the process. That typically means:
- Pressure-testing your current state to confirm whether your existing plan still reflects today’s roles, structure, and pay practices.
- Identifying real pay equity gaps using defensible, job-based analysis.
- Building or updating a pay equity plan that meets legislative requirements and is actually usable (not just compliant on paper).
- Supporting clear, thoughtful communication so employees understand what’s changing and why.
- Helping you plan for what comes next, including required reviews, documentation, and ongoing compliance.
Have questions about your pay equity plan?
Connect with our team today – we’re here to help!