Pay Equity in
Ontario
How to Maintain Pay
Equity in a Practical Sense
The Purpose of the Pay Equity Act
• The Pay Equity Legislation passed in 1988 to redress differences in compensation
due to systemic discrimination of 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.
• Pay equity is achieved when the pay rate of 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.
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 equal compensation for males and females doing the same job.
Who is Covered by the Pay Equity Act?
• All Employers in the Public Sector
• All Employers in the Private Sector with 10 or more Employees.
• Employers in the Public Sector and Employers in the Private Sector with 100 or more
Employees in 1988 were required to prepare and 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.
• Employers in the Private Sector with 100 or more employees who commenced
business after the effective date of the Legislation were are not required to post pay
equity plans but must achieve pay equity.
Structure
Pay Equity
Commission
Pay Equity Office
(PEO)
Pay Equity
Hearings Tribunal
(PEHT)
Responsible for enforcement of
the Pay Equity Act
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The Pay Equity Office
• OBLIGATIONS OF THE PAY EQUITY OFFICE
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COMPLAINT RESOLUTION
pay equity not achieved
pay equity not maintained
Disputes between Employer, Bargaining Agent or Employee.
• INITIATIVES OF THE PAY EQUITY OFFICE
• WAGE GAP PROGRAM
• MONITORING PROGRAM
Complaints
• Any employee, or group of employees, or the bargaining agent (if any) may
file a complaint with the Commission with respect to a pay equity plan.
 That the plan is not being implemented according to its terms
 That 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
 Complaints can be lodged anytime as there is no statue of limitation.
The Pay Equity Office
• A Review Officer will be appointed to resolve all pay equity issues in dispute.
• The Review Officer will attempt to resolve the issues and 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.
• Employers should ensure their compensation practices provide for pay equity
and are up to date and can support a challenge.
The Pay Equity Hearings
Tribunal
• The Tribunal process is de nova which means that they will not decide if the
Review Officer’s order is correct, but rather they will hold their own process.
• An Order from a Review Officer is required to go to the Tribunal.
• The Tribunal may try to resolve issues but if unresolved will issue a Tribunal
Decision which can only be challenged in Court.
• Once a Tribunal decision is issued it is a public document open to the public.
• The Tribunal may impose penalties for non compliance.
The Pay Equity
Office
Initiatives
Wage Gap Program
Monitoring Program
• Program began in January 2011 starting with Employers with 500 plus
employees.
• Stated purpose: research to determine if gender wage gap still exists
• Detailed information requested:
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Wage rates
Gender information
Length of service
Salary range for each individual employee
The Wage Gap Program
Monitoring
Program
 Wage Gap Files are converted to Monitoring Files if a Wage Gap is assumed
from the information provided.
 Review Officer appointed
 Employer to provide proof that pay equity has been achieved and is being
maintained
 Review Officer requires 5 years payroll information if no wage gap, 7 years if
wage gap and adjustments owed.
Monitoring
Program
 New Monitoring Files
 Previously files open by Sector, by Geographic Region, by Size
 Currently monitoring New Businesses started up during the previous 5 years.
 No plan required – Must achieve pay equity immediately as of start up date or
when 10 or more employees
Achieving Pay Equity
• Pay Equity is achieved when every Female Job Class is compared
to a Male Job Class of equal or comparable value and compensated
in the same manner as the Male Job Class using the Job-to-Job,
Proportional Value Method, or in the case of the Broader Public
Sector, the Proxy Method.
Job Rate
• The definition of job rate is the highest rate of
compensation for a job class.
• The definition of compensation for pay equity purposes is
salary and benefits provided to an employee for doing
work.
• When comparing job rates it is important to consider both
salary and benefits.
The Pay Equity Act provides
for Three Methods of Comparison
Job-to-Job
Proportional
Value
Proxy
Pay
Equity
Job-to-Job
• Job-to-job applies to all Public Sector and Private Sector Employers.
• Pay Equity is achieved using the job-to-job method when every
female job class is compared to a male job class of equal or
comparable value and compensated accordingly.
• Banding is one form of determining equal or comparable value
• In developing pay equity plans job-to-job using the search sequence
required by the Act was the first process.
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 in 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 a male job rate graph from the
representative male job classes and then comparing the
female job classes to the male job rate line.
Proxy
• The Proxy method of comparison for Broader Public Sector Employers only (as
defined by the schedule of the Act) for employers in establishments with none or
two few male job classes to achieve pay equity using either the job-to-job or
proportional value methods.
• Employers were issued an order to use the proxy method by the Pay Equity Office
after declaring that they were unable to achieve pay equity in a “Notice of
Inability to Achieve” (NIA) form.
• Pay Equity is achieved using the proxy method when every female job class in the
(seeking) organization is compared to a representative group of female job classes
in the (proxy) organization and their job rate is comparable to the proxy job
classes.
• Adjustments commenced January 1, 1994 and continued based on 1% of payroll
each year until pay equity was or is achieved.
• The proxy method requires maintenance.
Basic Pay Equity Terms
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Employer
Bargaining Agent
Establishment
Number of pay equity plans
Female and male job classes
Value of job class
Job rate
Employer
• The Pay Equity Act places the responsibility for achieving and maintaining
practices that provide for pay equity on the Employer.
• The Pay Equity Hearings Tribunal has provided questions in their decisions
regarding Who is the Employer? where there was no clear determination.
 Who determines the compensation, hires and terminates employees?
 Who has overall financial responsibilities?
 Who do the employees determine to be their employer?
 What is most consistent in achieving and maintaining pay equity?
• The Pay Equity Commission or Tribunal can render a decision on who
is the employer.
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.
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).
Non union pay equity plans
• Non union pay equity plans must be signed by the Employer and posted in the
workplace for 90 days
• In 7 days after the 90 day posting, Employees can request changes to the plan
and the Employer can make changes.
• The Employer then posts a Notice to advice if there are changes or no changes
to the plan.
• 30 days after the 97 day period Employees can file objections to the Pay
Equity Commission about the plan.
• If there are no complaints after the 127 day period has passed the plan is
“deemed approved”.
Union pay equity plans
• Union pay equity plans must be signed by both parties and posted in the
workplace
• Once posted they are “deemed approved” by the Pay Equity Commission,
which means it is as they the Commission had approved the plan.
• The Pay Equity Hearings Tribunal has placed much emphasis and
jurisprudence on deemed approved plans.
Pay Equity Maintenance Plan
• The obligation to maintain Pay Equity falls on the Employer
• In the event of a Bargaining Agent this does not require a
joint process
• There is no need for a Maintenance Plan
• Maintenance is an on-going process and should be included
in the Collective Agreement process
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Maintaining Pay Equity
The rumours of pay equity’s death have been
greatly exaggerated
What does Maintenance Mean?
• Maintenance means ensuring that the identified wage gap, if any, once closed
does not widen or re-appear.
• Maintenance means ensuring that an Employer’s compensation practices are
compliant with pay equity and wage increases are applied equally to female
job classes as to their male comparators.
• Maintenance means ensuring that Employers and Bargaining Agents take into
account pay equity while negotiating their Collective Agreements.
• Maintenance means ensuring that pay equity plans are maintained.
• Maintenance means ensuring that the proportional value job rate line is
maintained when applying increases to job classes.
The Ever-Changing Business
Environment
• How to react to organizational changes, such as:
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Ensuring the pay equity gap does not widen or re-appear
New Female Job Classes
Changes of Value of Job Classes
Vanishing male comparator job class
Impact of new male job on proportional value
Changes in gender composition of a job class
Permissible differences
Changed Circumstances
Sale of Business
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Job Class
A job class means positions in an organization that have:
Similar duties and responsibilities
Require similar qualifications
Are filled by similar recruiting procedures
And have the SAME rate of pay or salary range.
Significant Changes in Value of Job Class
• Job classes do change, significant changes could impact on pay equity.
• Employers and Bargaining Agents, if any, should look for changes that
may or may not impact on the value of job classes.
• If a female job class increases significantly in value a new male comparator,
or a higher band placement may be required.
• If a male job increases significantly it may impact by no longer being the male
comparator for a female job class.
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.
CHANGE IN GENDER OF JOB CLASS
• A change in numbers does not necessarily mean a change to the
gender designation
• Need to look at:
‾ historical incumbency
‾ stereotypical gender predominance
‾ look at gender predominance at time plan was prepared
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New Female Job Class
• Evaluate new female job class using the same GMCS
• Compare female job class to a male job class of equal or
comparable value either job-to-job or proportional value
• Compensate female job class at the pay equity job rate.
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New Male Job
Class
• A new male job class could affect the proportional value
job rate line or could be a potential male comparator for a
female job class.
Vanishing Job Classes
• In the event that a male job class no longer exists and is a male comparator for
a female job class, or classes the obligation is to:
 Find a new male comparator or use ghosting which means ensuring that the
female job class, or classes receives the same increases as all the other job
classes (or the male job class that no longer exists).
 Use the proportional value method for the female job class, or classes.
 The proportional value method may be impacted if the male job class was part
of the representative job classes.
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
WORKING
CONDITIONS
Value of job class
• The Act requires when evaluating a job class that the following are
considered:
SKILL
EFFORT
RESPONSIBILITY
WORKING
CONDITIONS
• 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.
VALUE
OF
JOB CLASS
Job Evaluation System
SKILL
• Education
• Experience
• Decision Making
• Problem Solving/Judgement
RESPONSIBILITY
• Consequence of Action –
Error
• Interpersonal Skills/Contacts
• Leadership
• Resource Responsibility
Job Evaluation Factors
EFFORT
• Mental Effort
• Physical Effort
WORKING CONDITIONS
• Disagreeable Conditions
• Hazardous Conditions
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*
• Maintaining pay equity should be a regular part of every employer’s
compensation activity
• Only compensation practices that are consistent with maintaining pay equity
can be continued or introduced
• Appropriate pay equity maintenance practices are often overlooked and are
more important than ever
Maintaining Pay Equity
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Maintenance and Changes that may Impact
Monitor changes that occur in the establishment for their pay equity
implications, such as:
• New job classes
• Changes in value of job classes
• Unionization after a plan was in place
• Changes in Circumstances that render the plan no longer appropriate
• Reorganization, restructuring
• Sale of Business, Amalgamation, Merger or Acquisition
Maintaining Pay Equity Key Maintenance Areas
Section 14.1 Changed Circumstances
• If the employer or bargaining agent (if any) is of the view that because of changed
circumstances in the establishment the plan is no longer appropriate, they may amend
the plan by giving written notice to the other party to negotiate, if no resolution in the
obligation is to refer to the Pay Equity Commission
Section 13.1 Sale of Business
• External changes that impact on the pay equity deemed approved plans, such as a
merger, lease, transfer, acquisition or amalgamation may impact and require a new
plan.
Tribunal decisions on Changed Circumstances
• A situation where a bargaining agent obtained bargaining rights for some employees
in a pay equity plan was found to be a changed circumstance that rendered the plan
no longer appropriate
• St. Joseph’s Villa
• A change in bargaining agents for all employees in a plan, which does not affect the
composition of the plan did not render the plan no longer appropriate
• Ottawa Board of Education
• New job classes or changes in value was not found to be a changed circumstance
• Harmony Hall/Call A Service
Sale of Business
‾ Acquisitions and Amalgamations were determined
to be a Sale of Business for Pay Equity Purposes
‾ Sale of Business requires a New Plan
‾ The Purchaser takes on the responsibilities of the
Seller
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PERMISSIBLE DIFFERENCES
• Very few PEHT decisions on subject
• Construed narrowly because of:
‾ Purpose of legislation
‾ “Exception” status
• Onus on employer to show that permissible difference exists
• Must be clearly described in pay equity plan
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HCI Consulting team
Thank you for listening and sharing this
time with us.