What is the Gender Pay Gap?
The gender pay gap refers to the difference in average earnings between men and women. As of 2025, there is still a 12 percent wage gap between men and women in Canada; women, on average, earn 88 cents for every dollar made by a man.
Since 1997, this gap has only closed by just 6 percentage points, and that slow pace on improvement in that gaps tells an important story. The gap becomes even wider for women who are newcomers to Canada, are racialized or are indigenous, and women with disabilities.
While many are aware this gap still exists, few realize that Ontario actually has a legal framework in place to address wage inequity, and remedies available when those laws are violated.
Three Laws, One Common Problem
There are three overlapping laws in Ontario that address gender-based pay discrimination:
1. The Employment Standards Act, 2000, S.O. 2000 c. 41 – “Equal Pay for Equal Work”
The Employment Standards Act prohibits employers from paying an employee less than another employee on the basis of sex where employees perform “equal work.” Equal work refers to employees who perform substantially the same kind of work in the same establishment, requiring substantially the same skill, effort, and responsibility, under similar working conditions.
Note that substantially the same does not mean exactly identical; it’s about the actual work being done, not just the job description.
2. Pay Equity Act, R.S.O. 1990, c. P.7 – “Equal Pay for Work of Equal Value”
The Pay Equity Act addresses the gender pay gap by examining whether work traditionally performed by women is being undervalued; in other words, it works to ensure that women performing different jobs but are of equal value to those performed by men receive equal pay.
This Act applies to most Ontario employers with more than 10 employees and is intended to address systemic gender discrimination in workplace compensation. Employers covered under this Act must compare female-dominated job classes with comparable male-dominated job classes based on skill, effort, responsibility and working conditions. Adjustments must be made where inequities are found to exist.
3. The Ontario Human Rights Code, R.S.O. 1990, c. H. 19
The Ontario Human Rights Code addresses the gender pay gap by prohibiting discrimination in employment based on sex. This means everyone has the right to equal treatment in employment.
The Code covers a wide range of systemic discrimination beyond job comparisons. Discrimination may not be obvious; even neutral policies can have discriminatory effects enough to warrant a claim under the Code.
What You Should Know as an Employer
Compliance here isn’t something you can set and forget. If you’re covered by the Pay Equity Act, you have ongoing obligations, including keeping your pay equity plan up to date and posting information so employees know their rights. One thing to note is that employers cannot lower anyone’s wages to close a pay gap; the law requires you to bring pay up.
It’s worth knowing that under the Employment Standards Act, employees are allowed to ask each other what they earn, and penalizing them for doing so is itself a violation.
What You Should Know as an Employee
If you suspect you are being paid less because of your gender, a few practical steps can help:
- Document your responsibilities, skills, and working conditions in detail.
- Ask what similarly situated colleagues earn or find out where that information is available.
- Consider whether to file a complaint with the Ministry of Labour, the Pay Equity Commission, or the Human Rights Tribunal.
The right avenue depends on your specific circumstances, and the options are not mutually exclusive. Whether you are an employee who suspects you are being underpaid or an employer who wants to ensure compliance or is dealing with an employee complaint, it is important to take proactive steps in understanding the law and how it applies to you and/or your organization. If you have questions please reach out to us to discuss how we can help.
