By: Helen Patterson, B.A., LL.B.
Pay equity is not about women and men paying the same amount of money for a beer – remember the Amy Schumer Bud Light beer ad that was pulled where she says "That's why Bud Light costs the same, no matter if you're a dude or a lady”? Nor is it paying a female the same amount as her male counterpart if their skill sets, experience and capability in performance differ. In Canada, pay equity is a compensation practice that is based on the value of work performed regardless of the gender of employees. An employer subject to pay equity law cannot differentiate between the wages paid to male and female employees who are performing work of equal or comparable value. Countries across the globe are reviewing pay equity legislation and programs, the media is highlighting gender pay gap issues, and the Government of Canada is revising its policy and programs as well.
It's time for a look at the status of Canadian pay equity laws, what they are currently and what's on the horizon. For private sector employees with 10 or more employees in Quebec or Ontario, pay equity compliance is a must. Some mistakenly believe it is only a public sector requirement. From a human rights perspective it’s always been non-discriminatory to differentiate based on gender in workplace policy and practice. Whether it is legally mandated or not, pay equity makes good business sense in today’s world of work.
Canada’s Pay Equity History
Canada is ahead of many other countries in relation to having pay equity legislation that specifically addresses the gaps in gender pay parity. As far back as 1951, the International Labour Organization adopted Convention 100, the Equal Remuneration Convention, in Geneva. Canada became a signatory to the convention concerning “Equal Remuneration for Men and Women Workers for work of Equal Value” and ratified it in 1972. In 1977 the Canadian Human Rights Act (that applies to federally-regulated employers) was enacted and included a section making it a discriminatory practice for an employer to “establish or maintain differences in wages between male and female employees employed in the same establishment who are performing work of equal value.” The year 2017 marks 30 years since Ontario’s Pay Equity Act, 1987 was enacted. In Ontario, the Pay Equity Office has “promoted gender economic equality by enforcing pay equity rights and obligations through effective case and complaint management, promoting awareness to advance economic equality for Ontario’s working women and advancing research on the gender wage gap”. Check out our Ontario Pay Equity fact sheet here. The body that regulates the HR profession in Ontario, HRPA released a white paper in 2016 entitled “Closing the Gender Wage Gap” with six recommendations. The Ontario government recently concluded its review of employment and labour standards laws and the advisors included a recommendation on equal pay eligibility for employees not in a full-time status – there will likely be changes coming from this report .
In Quebec, pay equity laws were first enshrined in 1978 in the Quebec Charter. In the mid-1990s, further legislation addressing pay equity was established. While Ontario and Quebec are similar there are some differences in plan requirements and in Quebec there is an additional annual reporting requirement. You can check out these helpful resources Quebec Pay Equity fact sheet, DEMES reporting. Many are also keeping an eye on a case in Quebec that will be heard in in the Supreme Court of Canada addressing whether certain sections of the Pay Equity Act in Quebec are unconstitutional, and specifically those relating to retroactivity, employee participation in audits and posting of audit results. The federal government is also revisiting the wage gap issue and has committed to introduce new pay equity legislation for the federal sector that differs from the human rights law already in place. Many other provincial governments introduced proactive pay equity regimes in the late 1980s to late 1990s, but in all other jurisdictions outside Ontario and Quebec the laws only apply to public sector employers. If the laws have been in place in Ontario, Quebec and in the public sector across Canada for years - why the focus now? Do you think the government has done its job in addressing pay equity?
Equal Pay For Equal Work and Equal Value
I think most people understand the theoretical concept of equal pay for equal work. A male, female, gender-agnostic, transgendered or any other human being who are performing the same or substantially similar job with equal experience, skills and capability should be paid equally. Take for example a coffee barista at Starbucks – if you are a part-timer, with no experience your starting salary should be the same if you are male or female (likely minimum wage in most cases). So if the local Starbucks in your neighbourhood is hiring for summer and the manager starts a female teen at a lower rate than a male teen, all things being equal, that’s not equal pay for equal work. Pay equity laws in Canada go beyond this concept and mandate equal pay for work of equal value as well. Through a complex assessment, an organization must compare all “predominantly female” roles with “predominantly male” roles using a job evaluation points system. If these two different jobs, say a construction worker and an office administrator in a construction company, have the same “points” assigned then the salary must be equal after the pay equity exercise. If the construction worker (male job) makes $15/hour and the office administrator makes $13/hour, there is a wage gap that must be rectified. Sounds simple, but it is a long and arduous process that should be proactively conducted in your organization.
Be Proactive in Addressing Pay Equity
In both Quebec and Ontario governments are conducting audits so it’s best that an organization take the necessary steps to review its workforce pay structure. Take a look at the various resources mentioned above, and follow these steps for staying compliant:
- Determine the job classes in your organization by grouping roles that have similar duties, responsibilities, qualifications, recruiting procedures and compensation characteristics
- Identify the gender for each job class (female, male or gender-neutral)
- Determine job rates using the highest rate of compensation for each job class, including all payments and benefits
- Conduct a job evaluation and job analysis based on skill, effort, responsibility and working conditions
- Have a solid system for managing and maintaining records and documents
- File any report required by the government
Become an employer of choice by understanding your obligations and creating a workplace that values all human contributions equitably and fairly. There are a number of non-financial reasons that pay equity also makes sense. The impact of negative media attention, inability to recruit top talent, as well as losing your current top talent, can take a toll on your employer brand. If your pay practices are not competitive with compensation benchmarked against other companies, word spreads quickly. Don’t simply use the pay equity concept as a social media opportunity unless your company truly lives the values of building a better workplace and a future world of work where all thrive and contribute on an equal footing.
Helen has a unique background combining careers in employment law and human resources and brings this expertise to her role in HR and Compliance Insights and Product Compliance at ADP Canada.