Pay Equity and What it is Not

I moderated a seminar on pay equity in Ontario on February 21, 2013, and one of the speakers made an interesting point about what pay equity is not.

The speaker, Veronique Soldini, of the Ontario Pay Equity Commission, made the point that not every difference in wages earned between men and women is subject to a complaint under the Ontario Pay Equity Act. In her words, Ontario pay equity legislation is meant to address differences in pay between men and women – but only for work in different jobs. In other words, the purpose of pay equity is to address the practice of paying certain jobs, primarily held by women, less than what is paid for other, comparable jobs mostly held by men.

Perhaps it would help to briefly explain how the Ontario pay equity legislation works. While this is broadly similar to pay equity legislation in force in most other jurisdictions, the following description is specific to Ontario.

In Ontario, the Pay Equity Act requires employers to review their compensation practices and eliminate differences in pay between job classes or groups of jobs which are primarily female versus those that are primarily occupied by males. This review involves a series of steps.

The first step is to group or classify jobs, based on how jobs are filled and their duties, responsibilities, qualifications and compensation. The second step is to determine which job classes or groups are primarily female versus those which are primarily male. The third step is then to compare female to male jobs based on an assessment of value to the organization. These values must be estimated based on the skill, effort and responsibility normally required, as well as the working conditions that apply. Pay equity is present when female jobs of similar value are paid at least the rate that applies to male jobs of similar value.

The previous paragraph is only a general outline of the Ontario pay equity requirements. As in many aspects of payroll, the devil is in the details. In particular, the complexity in pay equity stems from the need to judge which individual jobs or positions can be grouped together, the basis for determining value, how female jobs are compared to male jobs and the pay rate that applies for this comparison.

So what forms of discrimination in pay between men and women are not covered by the Ontario Pay Equity Act? The heart of pay equity is comparing the pay rates for female job classes or groups to those held by men. When we use the term ‘job class’ or ‘group of jobs’, it’s important to understand that we don’t mean individual positions or the actual employees holding them. For example, an employer may have two basic types of IT jobs – programmers and business analysts, with 10 programmer positions and 5 business analyst ones. In other words, there are 15 employees in total, spread across two different job classes. Pay equity is meant to ensure that if the business analyst jobs are primarily held by females, there is no discrimination in pay if the programmer jobs are primarily held by men.

However, the Ontario pay equity system is not meant to monitor rates of pay within a single job class or group. For example, a female programmer may only be paid at $25 an hour, when a male programmer doing essentially the same work, under the same conditions, may be paid at $35 an hour.

Pay equity is not involved in this situation, since the male and female employees both hold the same job or position. So what recourse would there be for such a female employee?

This is where the “equal pay for equal work” provisions of the Ontario employment standards come in. Unlike pay equity, these equality provisions deal with employees who do substantially the same kind of work. More or less the same criteria used to group or classify jobs for pay equity purposes also apply to determine if employees are doing “equal work”. These criteria are whether:

  • substantially the same kind of work is being done;
  • the work involves substantially the same skill, effort and responsibility;
  • the working conditions are similar.

In other words, jobs that would be grouped or classified together for pay equity purposes would also likely be seen as being “equal work” for employment standards purposes.

The employment standards requirement of “equal pay for equal work” does not, however, prevent differences in pay among employees who do “equal work”. It just means that if there are differences in pay, between employees of different genders doing “equal work”, all of these differences must be explainable by the following factors:

  • a seniority system;
  • a merit system;
  • a system that measures earnings by quantity or quality of production; or
  • factors other than the gender of the employees concerned.

For example, it could be that the male programmer, paid at $35 an hour, worked in a technical environment for which there was a limited supply of suitable applicants, as compared to the programming language used by the female concerned. If all of the $10 difference in hourly rate between these male and female programmers was accounted for by this difference, then a complaint to the Ontario Ministry of Labour, of not receiving “equal pay for equal work” would not likely be successful.

Alan McEwen is a payroll consultant and freelance writer with over 20 years’ experience in all aspects of the industry. He can be reached at armcewen@cogeco.ca, (905) 401-4052 or visit www.alanrmcewen.com for more information. This article first appeared on Canadian HR Reporter and Canadian Payroll Reporter on February 26, 2013.

 

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About Alan R. McEwen

HRIS/Payroll consultant and freelance writer
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One Response to Pay Equity and What it is Not

  1. Sharon says:

    Good article, I never fully understood the difference until now. Very helpful information.

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