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PAY EQUITY - THE BASICS
Pay equity - the basics
What exactly is pay equity?
Pay equity is the principle that jobs typically held by women should not be financially disadvantaged in relation to comparable jobs typically held by men. To be comparable, jobs need not be performed in the same environment or have similar tasks and requirements. The strength of this concept lies in the fact that it enables comparisons to be made between jobs that, at first glance, seem very different.
In order to put this principle into practice, a law has been passed which proposes a mechanism to ensure that wage discrimination in typically female jobs is reduced.
This process goes through several stages, which we'll explain in detail below. They are as follows:
- Identifying jobs
- Determining job categories
- Analysis of the predominance of job categories
- Details of total compensation
- The creation of a valuation method
- Weighting the valuation method
- Job category evaluation
- Comparative salary analysis between male- and female-dominated jobs
Who is the Pay Equity Act intended for?
Whether the company is under federal or provincial jurisdiction, a non-profit organization, or a public or private organization, all Quebec and Canadian employers with an average of 10 or more employees in an annual payroll cycle must fulfill their obligations under the Pay Equity Act (federal or provincial).
Do you need to reach the magic number to take action and make sure your business is fair? Not at all. Any company wishing to achieve pay equity, and at the same time take a look at its internal equity, can take steps in this direction. The key is to be proactive rather than reactive in the face of any imbalance. No employee will reproach his or her employer for worrying about equity before it becomes a legal obligation!
Who governs the Pay Equity Act?
For companies under provincial jurisdiction, pay equity legislation is enforced by the Commission des normes, de l'équité, de la santé et de la sécurité au travail (CNESST).
For companies under federal jurisdiction, the Canadian Human Rights Commission is responsible for enforcing the law via the Pay Equity Unit.
Among other things, these bodies are respectively responsible in their jurisdiction for ensuring that employers meet their legal obligations, they receive complaints from employees in this regard, and they can carry out audits at employers' premises. They can also impose fines and penalties, because yes, offending companies will have to suffer the consequences of their laxity, and could be fined up to $45K.
Who is responsible for carrying out the pay equity exercise?
The employer is primarily responsible for carrying out the pay equity exercise. However, depending on certain criteria, it may be obliged to carry out the work with the help of a pay equity committee. At first glance, an employer carrying out its initial pay equity exercise (in Quebec) or its Pay Equity Plan (at federal level) and employing 100 or more employees is obliged to set up a pay equity committee.
For other employers, this is not an obligation, but it can be a good way of involving employees in the process and demonstrating transparency.
Another way of encouraging employee participation is to solicit their input in documenting the roles and responsibilities of different jobs. No one is better placed than the job holder to explain his or her day-to-day tasks. This can be done simply by using an online -survey questionnaire.
Employee participation can also take the form of consultation on the choice of job categories, evaluation methods, appraisals and salary analysis, while leaving the decision-making power to the employer.
Certain circumstances require employee participation, such as when the initial pay equity exercise was carried out by a committee, or when a union represents some or all of the employees.
What is the difference between the initial exercise and the pay equity maintenance exercise?
In Quebec, according to provincial law, an initial pay equity exercise must be carried out when the company reaches an average of 10 employees in an annual pay cycle. The initial exercise consists of taking a snapshot of the company (employees, jobs, remuneration) at a given date and analyzing the pay equity situation at that date. It is therefore a one-off analysis of the company's situation.
In Canada, under Canadian law, the same exercise is required, but called a "Pay Equity Plan".
Once this initial exercise has been completed, both laws require that the exercise be updated every 5 years. However, when we talk about updating, it's not a matter of taking a new snapshot of the situation 5 years later, but of listing all the changes that may have taken place during this period and that could potentially have had an impact on pay equity. This exercise is called the pay equity maintenance exercise at the provincial level, and the pay equity plan review at the federal level.
Do I have to wait until the end of the 5-year period to do my next exercise?
No, it is possible to work proactively on pay equity. However, many companies choose to wait until the end of the 5-year period before carrying out their next pay equity exercise. Unfortunately, these companies are faced with a number of challenges, such as finding the data from the previous exercise that will serve as a starting point for the new work, losing organizational memory of the changes that have taken place during the period, and staff turnover in the team responsible for managing pay equity. Faced with these realities, the exercise becomes cumbersome and tedious. Unpleasant surprises can also arise, such as costly retroactive payments to certain female-dominated job categories.
How can I make my pay equity exercise easier?
The good news is that there are solutions available. For example, the use of a web-based platform such as that offered by WIIMAG enables efficient data storage, easy file transfer in the event of staff turnover, and data import - even from a PDF version of the payroll register when a new payroll system has been implemented right in the middle of the year's reference period! A solution like this provides all the data you need to do your job, while automating several steps in the process and providing intelligent assistance to make the job easier.
Another interesting option for avoiding headaches, complaints and fines is to work proactively on your pay equity file on an ongoing basis, which is what WIIMAG simply offers you. In addition to avoiding headaches, the platform enables you to ensure in real time that the wages paid to each job category are fair. What could be better than to test your plan before implementing it when creating a new position? WIIMAG 's platform enables simulations to facilitate decision-making in terms of compensation allocation.
Whether completely autonomous or with the support of our team of pay equity and compensation experts, the WIIMAG platform can lighten your workload.
The WIIMAG platform offers a proactive, automated solution for managing pay equity, ensuring data retention, easy data entry, data import from a variety of formats, and decision support to guarantee fair wages in real time. I want more info!