Employer’s Introduction to Pay Equity

To Whom Does This Apply?

TO WHOM DOES THIS APPLY?
All public sector employers, and private sector employers with 10 or more employees, in the province of Ontario, regulated by provincial jurisdiction.

Summary

What is Pay Equity?

Pay equity is "equal pay for work of equal value", which is not the same as "equal pay for equal work".  Equal Pay for Equal Work, covered by the Employment Standards Act, requires employers to pay men and women equally for doing the same job or substantially the same job.

The Pay Equity Act requires that different jobs be evaluated and work mostly or traditionally done by women be compared to work mostly and traditionally done by men.  An employer could, for example, compare the value of the work of a secretary, a traditionally female job, to the value of a shipper, a traditionally male job.  If the value to the organization is equal or comparable, the secretary must receive at least the same job rate as the shipper.

Steps an employer takes to achieve pay equity:

Step 1
Determines the employer, the bargaining agent (if applicable), and the establishment
If there is a bargaining agent, they must be involved in the pay equity process and all locations within a geographical area must be treated as one establishment.

Step 2
Determines if the pay equity plan(s) must be posted
Public sector employers and private sector employers with 100 or more employees were required to post pay equity plans in the early 1990s.  Private sector employers with 10 to 99 employees and new employers are not required to post plans.  However, these employers must still compare male and female job classes and pay female job classes at least as much as where they are found to be comparable to male job classes.

Step 3
Identifies the number of pay equity plans required 
The Act requires that within each establishment there is a separate plan for each bargaining unit, and one plan that includes all non-bargaining employees.
 
Each pay equity plan:

Step 4
Determines the job classes and their gender
There are three criteria which determine the gender of a job class. A job class is considered female or male according to the percentage of employees in that job class. Usually, if 60% of the employees are female, it's a female job class; if 70% are male, it's a male job class; if there are about the same number of female and males, it's gender neutral. However, employers must also consider the gender of the employees who have done the work in the past and the gender which is usually or stereotypically associated with that kind of work. For example, the job of secretary or nurse would immediately be thought of as female and a truck driver or plumber is usually thought of as male.

Step 5
Decides on the gender-neutral comparison process to be used
The Act requires that this process be gender neutral and that the comparison be made under the four main factors of skill, effort, responsibility and working conditions.  The Act does not specify the method to be used, but most employers use a job evaluation system to obtain their results.  This system could include subfactors, levels for each subfactor, and a weighting system that reflects the focus, mission and values of the company.  The weighting system puts a quantifiable number to the levels.

Step 6
Compares the value of the job classes and their job rates 
Private sector employers use an initial process called ‘job to job’ comparison.  This is a direct comparison between male and female job classes that have similar job values; often, employers will use a point banding system to determine what is comparable.  If there are female job classes that cannot find a male comparator under this approach, then they are compared under the proportional value method.  This is an indirect method of comparison that looks at the relationship between the value of the work and the pay received by the male job class and applies that same relationship to the female job classes.

Step 7
Prepares and posts the pay equity plan and make adjustments 
The Plan must include the name of the employer, bargaining agent, and location of the establishment; list all female and male job classes, give a short description of the comparison process, list the results of the comparisons and any permissible differences used, indicate the adjustments required to female job classes and give the date the adjustments will be paid.  The Plan must be posted in all locations that an employee would expect to find workplace information.

After pay equity is achieved it must be maintained. To do this, changes occurring in the workplace need to be monitored for pay equity implications.  These changes could be internal - such as new job classes, changes in job duties of an existing job class, changes in job rate, or changes in union status.  The changes could also be external: sale/purchase of a business, merger, amalgamation or acquisition.  Anytime that the changes have an impact on pay equity, the plan must be amended. A new plan should be created when there is a sale of business.

Archive all records that pertain to pay equity.  There is no statute of limitations under the Act and any adjustments owed are retroactive to the date of the contravention.  This means that you need to keep all the documentation that has a bearing on pay equity, whether it is the original job comparison process, job descriptions, pay equity plan or the payroll records that show when pay equity adjustments were made.

Information and assistance are available.  Attend free seminars; check the website http://www.payequity.gov.on.ca/index_pec.html for information, interactive pages, publications and seminar schedules.

"Fairness Pays" Employees who feel that they are being treated fairly, including compensation that is based on the value of the work they do, are more productive and more likely to stay.

• Important Notices

DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Ontario Contact(s):
Pay Equity Commission
Pay Equity Office
11th Floor
400 University Avenue
Toronto, Ontario 
Telephone: (416) 314-1896
Fax: (416) 314-8741
Toll-free (information): 1-800-387-8813