In Ontario, the Pay Equity Act applies to all public sector employees and those private sector employees who work in a workplace of ten or more employees. Federally employed employees are not covered by the Pay Equity Act but by similarly enacted Federal legislation.

The Pay Equity Act requires that men and women are paid equally for work of equal value. Paying men and women for "work of equal value" is not the same thing as "equal pay for equal work".

• "Equal pay for equal work" means that men and women who are performing the same job (i.e. both are employed as a shipping clerk) must get paid the same wage.
• "Work of equal value" means that men and women who perform different jobs (i.e. a shipping clerk and a secretary) must get paid the same wage, if their work is of comparable value to their employer.

Pay equity requires a comparison of groups of jobs that are traditionally performed by women (also called "female job classes") and groups of jobs that are traditionally held by men (also called "male job classes"). Determining what is a female job class and a male job class is not always a simple task. Included in the relevant factors are:

• The number of women working in a job
• The number of men working in a job
• The gender of the workers who have done the job in the past
• The gender of the workers who are stereotypically associated with the job

Determining whether a group of jobs may be a "job class" in the first place is no easier a task. Job classes are defined as jobs which have similar duties and responsibilities and require similar qualifications, and which are filled by similar recruiting procedures and have the same compensation schedule, salary grade or range of salary rates.

Once female and male job classes are identified, the employer must compare the value of the jobs in those classes. The job comparison is to be made on four factors: skill, effort, responsibility and working conditions, and must be performed in a gender neutral fashion. If, after comparing the job classes, it is determined that the work performed by the female job class is comparable to the work performed by the male job class, the employer must compare the salaries of the employees in those comparable job classes.

If the employees in the female job class are paid less than the employees in the comparable male job class, the salaries of the employees in the female job class must be adjusted up to match the salaries of the employees performing work in the male job class.

In a unionized workplace, the employer and the union must collaborate to achieve pay equity; non-unionized employers are not similarly required to collaborate with their employees to achieve pay equity.

The employer's obligation to maintain a pay equity plan is continuing, and an employer is obliged to continue to achieve pay equity even where changes in business patterns may affect the workplace comparator job classifications.

Complaints made about an employer's pay equity practices are made to the Pay Equity Commission, a tribunal established to adjudicate complaints related to the Pay Equity Act.