Pay Equity inOntario

A Quick Little Overview

The Purpose of the Pay Equity Act

• The Pay Equity Legislation which was passed in 1988, is to redress differences in compensation due to the systemic discrimination of the work in traditionally female dominated jobs (job classes).

• Jobs currently and traditionally performed by women must be compared to work currently and traditionally done by males. Then if female jobs are found to be of equal value they must be paid at least the same as male jobs.

• Pay equity is achieved when the pay rate for a female job class equals the pay rate of a male job class where the work performed by the female job class is of equal or comparable value.

• In order to compare female to male jobs the value of each job must be determined based on skill, effort, responsibility and working conditions. This is the job evaluation process.

Pay Equity Pre-Test6.) Ontario’s pay equity law applies to both public and private sector employees. T F 7.) Under the equal pay for equal work provisions of Ontario’s Employment Standards Act, either men or women could complain of unfair pay.  T F  8.) Employee performance is important when making pay equity comparisons. T F 9.) A job where 60% of incumbents are female can be called a female job. T F 10.) Employers can lower wages for male jobs that are paid more than female jobs in order to meet legal requirements.  T F

 

1.) The most recent Statistics Canada data shows in Canada, for every $1.00 that men earn working full-time, in a full year, women working full-time in the same period earn on average: a) $0.65 b) $0.74c) $0.83 d) $0.90

2.) The gender wage gap is caused by:a) women choosing or needing to leave and re-enter the workforce in order to meet family care-giving responsibilitiesb) occupational segregation in historically undervalued and low-paying jobsc) less unionization amongst female workers d) discrimination in hiring, promotion and compensation practices in the workplace e) all of the above

3.) Ontario’s Pay Equity Act requires that jobs be compared on the basis of:a) Skillb) b) skill, education, experience and performancec) skill, effort, responsibility and working conditionsd) responsibility, experience, education and skill

4.) Professional women are as likely as professional men to negotiate salary.

T F

5.) The gender wage gap between men’s wages and women’s wages is due to the choices that women make. T F

• All Employers in the Public Sector and all Employers in the Private Sector with 10 or more Employees are Covered.

• Employers in the Public Sector and Employers in the Private Sector with 100 or more Employees in 1988 were required to prepare post pay equity plans.

• Employers in the Private Sector with less than 100 Employees in 1988 could choose to prepare and post pay equity plans but still had to achieve pay equity.

• Employers with less than 10 Employees and Federally Regulated Companies are not covered.

Who are Covered by the Pay Equity Act?

The Difference Between what is Covered by Pay Equity and

Employment Standards• Pay Equity Legislation covers equal pay for work of equal value which

requires evaluating and comparing different jobs, male to female and if the work is found to be of equal or comparable value, compensating them the same.

• This is different to what is legislated under Employment Standards. Employment Standards Legislation covers equal pay for equal work which requires equally compensating males and females doing the same job.

Basic Pay Equity Terms

• Employer• Bargaining Agent• Establishment• Number of pay equity plans• Female and male job classes• Value of job class• Job rate

Pay Equity Plans

• The Act requires a pay equity plan for each establishment of the Employer.• Establishments are geographic regions.• Establishments can be combined.• There must be a pay equity plan for each bargaining unit

and a pay equity plan for all employers that are not represented (non-union).

Job Class

A job class means positions in an organization that have:Similar duties and responsibilitiesRequire similar qualificationsAre filled by similar recruiting proceduresAnd have the SAME rate of pay or salary range.

Gender of job class

• A female job class is a job class where 60% or more are female.

• A male job class is a job class where 70% or more are male.

• A gender neutral job class is where the job class is neither male nor female.

• It is important to consider the historic incumbency of the job class as well as the stereotypical nature of the work.

• Once a decision on the gender has been decided and applied, a change in the gender percentage of the incumbency does not change the gender of the job class.

Value of job class

• The Act requires when evaluating a job class that the following are considered:

• There is no stipulation on what job evaluation system is used to evaluate job classes providing it is Gender Neutral, which means it does not favour one gender or another.

SKILL EFFORT RESPONSIBILITYWORKING

CONDITIONS

VALUEOF

JOB CLASS

What is Job Evaluation?

• A process to objectively and fairly determine the relative value of jobs within an organization.

• It is based on systemic review and analysis of job activities, relationships and requirements.

• Certain identifiable elements or factors are present in all jobs but to varying degrees.

• These identifiable factors can be objectively measured:

SKILL EFFORT RESPONSIBILITY WORKINGCONDITIONS

Job Evaluation – What it is NOT

Job evaluation is NOT….• An evaluation of people• A performance appraisal• An external market comparison• A general wage increase• An evaluation of the gender or qualifications of the individual in

the job

Remember: POSITIONS NOT PEOPLE

Gender Neutral Job Evaluation Systems• There is no stipulation on what job evaluation system is used to evaluate job

classes providing it is Gender Neutral, which means it does not favour one gender or another.

• Job evaluation is a defensible process for establishing relative internal value of jobs.

• Pay equity is achieved when the pay rate for a female job class equals the pay rate of a male job class where the work performed by the female job class is of equal or comparable value.

• An appropriately designed Job Evaluation System is central to complying with the Pay Equity Legislation and maintenance of a pay equity plan.

Job Evaluation Factors HCI ConsultingSKILL• Education• Experience• Problem Solving• Judgement

RESPONSIBILITY• Decision Making• Consequence of Action –

Error• Interpersonal Skills/Contacts• Leadership• Resource Responsibility

EFFORT• Mental Effort• Physical Effort

WORKING CONDITIONS• Disagreeable Conditions• Hazardous Conditions

Job Evaluation

Factors

Job evaluation rating and comparison

• Evaluation is carried out by choosing a level or grade score for each factor.• Evaluation is based on the job information provided.• Each level or grade has a predetermined point value.• The value of the job is the total value of all the factors.

Comparing job classes

• Once the evaluation process has been completed and the value of the job classes have been determined, job classes are compared.• When the value of a female job class is the same or

similar to a male job class they have to be compensated the same. That is have the same job rate.

Job Rate

• The definition of job rate is the highest rate of compensation for a job class.• The definition of compensation is salary and benefits and

anything provided to an employee for doing a job of work.• When comparing job rates it is important to consider both

salary and benefits.

The Pay Equity Act provides for Three Methods of Comparison

Pay Equity

Proxy

Job-to-Job

Proportional Value

Job-to-Job

• Job-to-job applies to public and private sector employers and allows for a direct comparison between female job classes and male job classes in the same organization if they are the same or similar value

The Job-to-Job Method of

Comparison

• The job to job comparison method required comparing female job classes to male job classes of equal or comparable value and if the value was found to be the same they are required to be compensated in the same manner.

With only the job-to-job method, some female job classes could not

achieve pay equityPoint Value of Job Gender of Job Male Comparator

800 Points M

700 Points M

600 Points F M

500 Points F M

400 Points F

300 Points M

200 Points F

Proportional Value

• Proportional value applies to public and private sector employers. This method is used where the job-to-job cannot be used to compare all the female job classes because there is no male job class that is equal value to the work performed by the female job class. This allows an indirect comparison between female and male job classes.

Proportional Value• The Proportional Value Method of

comparison requires comparing female job classes to a representative range of male job classes.• This could be achieved by regression analysis calculations

or drawing of a male job rate line from the representative male job classes and then comparing the female job classes to the male job rate line.

Maintenance Obligations

Subsection 7.1• Every employer shall establish and maintain compensation practices that

provide for pay equity in every establishment.

Subsection 7.2• No employer or bargaining agent shall bargain for or agree to compensation

practices that, if adopted, would cause a contravention of subsection 7.1.

Jurisprudence on Maintaining pay equity

• The onus is on the Employer to achieve and maintain compensation practices that provide for pay equity• Subsection 7.1 of the Act

• Bargaining agents are prohibited from condoning an employer’s failure to maintain pay equity• Subsection 7.2 of the Act – York Region Board of Education

*Bargaining Agents have an ongoing role in maintenance. Results of maintenance agreements are deemed to form part of the

Collective Agreement*

Complaints

• Any employee, or group of employees, or the bargaining agent (if any) may file a complaint with the Commission complaining with respect to a pay equity plan.

That the plan is not being implemented according to its termsThat the plan is not being maintained, in that wage gaps have re-appeared or

widened.That changed circumstances have rendered the plan no longer appropriate

ComplaintsAny Employee, Ex-Employee or Group of Employees can complain at any time that pay equity was not done. There is no statute of limitation.

The Pay Equity Commission

• A Review Officer will be appointed to resolve all pay equity issues in dispute.• The Review Officer will attempt to resolve the issue but has the power to

order the outcome.• Review Officer’s Orders can be referred to the Pay Equity Hearings Tribunal

if in dispute or to have an order enforced.• Orders may impact on employers with large financial liabilities.• Ensure your practices are up to date and can support a challenge.• In particular, retroactive adjustment calculations for proxy liabilities.

Pay Equity Test Take Up