Ignore Commission’s pay equity drive at your $100m+ peril

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Pay equity mistakes can be costly in court, as Canada Post found out last year when it was told to pay more than $150m, plus interest, to clerical staff who worked between 1983 and 2002.

The Pay Equity Commission is trying to track how common gender pay inequity is by sending surveys to hundreds of employers as part of its Gender Wage Gap Program. If you received a survey, it might be time to review your practices.

“There's a legal issue of whether they can compel employers to participate in what is essentially a research program, but I think there's a practical effect of, whether the employer participates or not, it puts them on the radar of the commission. An employer receiving that enquiry does want to get their ducks in a row,” says Lauri Reesor, a partner at law firm Hicks Morley.

 A job class is determined by the overall demographics of people in that job category. If the gender split is more than 70% one way, the job is classified as ‘male’ or ‘female’ accordingly.

Some male clerical staff from Canada Post will, in fact, receive payouts because they are in a ‘female’ job class.

It's easy to overlook changes at work that require reassessment, Reesor says. The typical way in which problems are created is when compensation for a ‘male’ job class changes, but the increases don't flow on to the female job classes and you end up with gender pay inequity. However, anything from sale of a business to certification of some staff by a union can require a new assessment.

But the “biggest takeaway”, Reesor says, is that there is no limitation period on pay equity. “The obligation is owed to current and former employees. If an employer is not maintaining pay equity and is not looking at reviewing their process on a regular basis they could have ongoing exposure if there are any wage gaps that were created over the years,” she says.

And if the commission or the Pay Equity Hearings Tribunal gets involved they can, and often do, award interest at a rate from when the gap arose; Reesor has seen interest payments end up larger than the original sum awarded.

Take steps now

Someone specific needs to take ownership of ensuring pay equity, whether it's via an annual review or an assessment every few years. Every review protects your company and allows you to take correctional steps.

How it works

Human Resources and Skills Development Canada suggests asking the following questions when considering pay equity issues at your company:

  • Do you have a gender-neutral method of assessing the value of work?
     
  • Does this method take into account the four job evaluation factors required by the Canadian Human Rights Act: skill, effort, responsibility and working conditions?
     
  • Do you pay employees either according to these assessed values or according to market values?
     
  • What benefits are included in your compensation package, and are they equally available to male and female employees?
     
  • Do you want to obtain external pay equity expertise?

For more information visit the Pay Equity Commission website.
 

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