1. How to Maintain Pay Equity in a Practical Sense
Pay Equity in Ontario
How to Maintain Pay Equity in a Practical Sense

2. 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.

3. 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.

4. 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.

5. Structure Responsible for enforcement of the Pay Equity Act
Pay Equity Commission
Pay Equity Office
(PEO)
Hearings Tribunal
(PEHT)
Pay Equity
Responsible for enforcement of the Pay Equity Act

6. The Pay Equity Office OBLIGATIONS OF THE PAY EQUITY OFFICE
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

7. 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.

8. 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.

9. 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.

10. The Pay Equity Office Initiatives
Wage Gap Program
Monitoring Program

11. 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:
Wage rates
Gender information
Length of service
Salary range for each individual employee
The Wage Gap Program

12. 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.

13. 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

14. 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.

15. 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.

16. The Pay Equity Act provides for Three Methods of Comparison
Proxy
Job-to-Job
Proportional Value

17. 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.

18. 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.

19. 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.

20. 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.

21. Basic Pay Equity Terms Employer Bargaining Agent Establishment
Number of pay equity plans
Female and male job classes
Value of job class
Job rate

22. 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.

23. 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.

24. 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).

25. 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”.

26. 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.

27. 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

28. Maintaining Pay Equity
The rumours of pay equity’s death have been greatly exaggerated

29. 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.

30. The Ever-Changing Business Environment
How to react to organizational changes, such as:
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

31. 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.

32. 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.

33. 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.

34. 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

35. 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.

36. 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.

37. 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.

38. 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

39. SKILL
EFFORT
RESPONSIBILITY
WORKING CONDITIONS
JOB CLASS
VALUE OF
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.

40. Job Evaluation Factors
Job Evaluation System
Job Evaluation Factors
SKILL
Education
Experience
Decision Making
Problem Solving/Judgement
RESPONSIBILITY
Consequence of Action – Error
Interpersonal Skills/Contacts
Leadership
Resource Responsibility
EFFORT
Mental Effort
Physical Effort
WORKING CONDITIONS
Disagreeable Conditions
Hazardous Conditions

41. 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*

42. Maintaining Pay Equity
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

43. 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

44. 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.

45. 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

46. 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

47. 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

48. Thank you for listening and sharing this time with us.
HCI Consulting team
THANK YOU!
Thank you for listening and sharing this time with us.

49. Individual Questions and Advice
Questions and Discussion
Individual Questions and Advice