Achieving Gender Pay Equity: Preparing for and Surviving a Pay Equity Audit

Transcription

1 Achieving Gender Pay Equity: Preparing for and Surviving a Pay Equity Audit

2 Agenda 1. Pay Equity Legislation The Canadian Pay Equity Landscape 2. Ontario Pay Equity Act What s New? 3. Pay Equity Audits What s involved? Communication from Review Officer Steps to Compliance - Information to submit 4. How should I organize my Pay Equity data? 5. What questions can I expect? 6. How can I prepare for an audit? Time-Permitting - How do Pay Equity laws effect my bottom line? - Consequences of non-compliance with an audit

3 Pay Equity Legislation 3

4 4 Internal Equity External Equity Equal pay for Equal work How you pay your employees Hiring more women Women in male job classes

5 Canadian Pay Equity Landscape PROVINCE YEAR PUBLIC VS PRIVATE Manitoba 1986 Public sector employers only Ontario 1987 Public and Private sector employers Prince Edward Island 1988 Public sector employers only New Brunswick 1989 Public sector employers only Nova Scotia 1989 Public sector employers only Quebec 1996 Public and Private sector employers

6 Canadian Pay Equity Landscape (cont) Ontario Pay Equity Act (1987) Public and Private sector employers Quebec Loi sur l équité salariale (1996) Public and Private sector employers Federal Pay Equity is next! *Image of Canada taken from;

7 I am based outside of Ontario/Quebec, how does this webinar apply to me?

8 Ontario Pay Equity Act Established in 1987, became effective as of January 1st, 1988 Law in Ontario The Act outlines the minimum steps and requirements for all covered companies to carry out in order to achieve pay equity and eliminate the systemic gender Identify and Correct differences in pay discrimination in their compensation systems All employers in Ontario except for private Equal pay for work of equal value sector employers with fewer than 10 employees are obligated to carry out and maintain pay equity

9 What s New? Pay Equity Office (Ontario) is very active, new Review Officers, top of mind for many employers Active monitoring of targeted industries ( ) Federal Government Contractors, Vendors of Record New employers > 3 years, 10 + employees Innovation sectors ( ) Bill 148: Pay Equity vs Equal Pay Pay Equity = Gender-based compensation analysis (Pay Equity Act) New Equal Pay = Status-based compensation analysis (ESA) PEO is reviewing the changes that are part of Bill 148 and their implications on Pay Equity compliance.

10 Preliminary Analysis and Data Entry Post your Plan Identify Job Classes Achieving Estimate Salary Gaps via Analysis Pay Equity Calculate Job Rate ($/h) Determine the Value of Job Classes Determine Gender of Job Classes

11 Pay Equity Audits what s involved? PEO Letter to CEO/ President Employee Listing for each year Job Classes, Job Rate, Gender Job Information Employee Information Evaluation Results and Analysis Notice of Decision (12 24 mos) Review Officer Post Notice List of Job titles, Gender, Hourly rate Determine monitoring period (3-4 years) Cast a wide net Names Job titles Hourly rates Must include detailed justification How jobs were classified Gender determined Job rate calculations Job descriptions Offer letters Job postings Payroll summaries for each year T4 s redacted Factors Weighting Review Officer will have many questions Post Pay Equity Plan Re-open an old audit

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13 1. What type of business is this? Monitoring Program Checklist 2. On what date was the company established in Ontario? 3. On what date did you hire your 10 th employee? 4. How many employees do you employ in Ontario? 5. How many benefit plans are available to employees? 6. Do employees have equal access to the benefit plans? 7. Are any employees represented by a union? 8. Have you implemented Pay Equity? IF YES, provide your entire plan IF NO, provide a list of all job titles, genders, hourly rates (called an Employee Listing)

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15 Step 1: Job Classification Collection of employee information (e.g. job title, gender, hire date) Similar duties and responsibilities, qualifications, recruitment Access to the same compensation schedule, grade or range of salaries and access to the same benefits Step 2: Calculate the Job Rate of Job Classes Collect compensation information (input from accounting dep t) Base salary + variable benefits (RRSP, Bonus, Commission, Group Insurance) $/h

16 Step 3: Determination of Gender Predominance 60% F / 70% M Stereotype (stats Canada) History (5 years min) Step 4: Evaluating the Job Classes Gender neutral point-factor system preferred Skill, Effort, Responsibility, Working Conditions Be aware of biases in evaluation 10 sub-factors = 1000 pts, keep it simple.

17 Step 5: Estimate Salary Gaps - Analysis Job-to-Job Method Matches female job classes directly to a male job class of equal or comparable value Compare the female job classes to the LOWEST PAID MALE JOB CLASS in the point band Proportional Methods of Analysis Indirect comparison using regression analysis that compares the relationship between the male and female jobs in an establishment Prepare and Post your Pay Equity Plan, Maintain Pay Equity

18 How should I organize my Pay Equity data? Employee Name Job Title Hire Date Gender Salary for the pay period Hours Worked Hourly Rate Bonus Commissions Car Allowance Job Rate($/h) John Smith Jane Doe Richard Gere Driver 11/05/2007 Male $1, $12.50/hour $ $0 $0 $12.86 Executive Assistant Warehouse Clerk 02/21/2005 Female $1, $20/hour $1664 $0 $0 $ /04/2000 Male $1, $13/hour $ $0 $0 $13.33 Julia Roberts Accounts Receivable Clerk 02/24/2011 Female $ $12/hour $936 $0 $0 $12.45 Jessica Rabbit Accounts Payable Clerk 02/24/2011 Female $ $12/hour $936 $0 $0 $12.45 Jennifer Lawrence HR Specialist 10/16/2000 Female $1, $20/hour $1664 $0 $300 $20.94 Bradley Cooper Quality Assurance Inspector 03/09/2006 Male $1, $16/hour $ $0 $0 $16.48 Kathleen Wynne Buyer 05/14/2015 Female $2, $25/hour $4680 $0 $400 $27.44 Justin Trudeau Sales Manager 11/05/2007 Male $2, $30/hour $3120 $15,000 $0 $38.71 Captain Picard Warehouse Clerk 11/04/2002 Male $ $10/hour $624 $0 $0 $10.30

19 What questions can I expect? Tips Most often, Review Officers want justifications (explanation and written proof) of your decisions at each step Explain to me how you calculated your job rate? Why did you classify these two positions together? How did you determine stereotype for this job class? If you are claiming a formal seniority system, or a formal merit-based system prepare to provide written proof Provide proof of gender history (employment contracts) Document, document, document! Keep a word document with all of the decisions you are taking along the way and provide it to the Review Officer When providing a timeline for Pay Equity Implementation, be generous! Make sure to keep in touch with the Review Officer on a regular basis Ask for extensions when needed, and provide a valid reason why

20 How can I prepare for an audit? Job evaluations/job analysis Job descriptions Performance evaluations Review your compensation practices yearly - ensure that your compensation strategies and policies are not inherently discriminatory

21 How do Pay Equity laws effect my bottom line? $0.74 salary adjustment for every employee who is a PT Customer Service Associate $0.74*1040 = $770 $770*10 employees = $7,670 3% interest yearly for 3 years ($7900*3 = $23,700) Not just your female employees, but every employee in the female job class

22 Consequences of non-compliance with an audit Retroactive salary adjustments (3 4 years) Salary adjustments are retroactive to the beginning of the monitoring period Increased chance of a complaint With pay equity making headline news, employees and Government are paying close attention Interest on adjustments (3%) The commission orders employers to pay interest on retroactive adjustments Public Tribunal decisions are made public

23 Solertia Consulting Group Trained in psychology and business administration, Wendy brings experience, insight and academic rigor to the job. She has worked with Ontario and Quebec-based companies and has spearheaded numerous HR mandates from compensation structure development to company-wide engagement surveys. Wendy s practice in Pay Equity compliance spans across the private, public and not-for-profit sectors for organizations both large and small. Through her experience and knowledge she is able to take a complicated process and make it easy to understand for her clients. Wendy Glaser, M.Sc., CHRL Ontario Division Manager, Human Resources Consulting Wendy holds a B.A. in Psychology and a certificate in Human Resources Management from McGill University as well as an M.Sc. in Administration from Concordia University. Wendy is a certified and active member of the Human Resources Professional Association.

24 Contact Information Toronto Office Wendy Glaser, M.Sc., CHRL Manager, Human Resources Consulting Ontario Solertia Consulting Group / Toronto Office 2 St. Clair Ave West, Suite 1800 Toronto (Ontario) M4V1L5 Tel.: (416) Toll free: Social Media LinkedIn Facebook info@solertia.ca wglaser@solertia.ca