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The Ontario Pay Equity Audit

The Ontario Pay Equity Audit

What is Pay Equity About?

What can Pay Equity cost an Employer?

What should the Employer do NOW?

Ontario Pay Equity Maintenance: PROVE IT!

Ontario Pay Equity Maintenance:  PROVE IT!

Retroative Liability:  A Potentially Devastating Cost

How to prove Implementation of Pay Equity

How to prove Maintenance of Pay Equity

The 60 Second Ontario Pay Equity Audit -

The 60 Second Ontario Pay Equity Audit - Do you have an Unfunded Retroactive Liabnility?  Try our self audit.

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Ontario Pay Equity Maintenance: PROVE IT!

Retroactive Liability: A Potentially Devastating Cost

Employers in the Public and Private Sectors in Ontario were required to implement Pay Equity in the early 1990's.  New employers were required to implement Pay Equity at startup.  A Company acquiring another company took on their pay equity liabilities.  The retroactive liability may stretch back to close to 20 years' Pay Equity increases to present and past employees.

The only exceptions were Private Sector employers with less than 10 employees and they would have been required to implement as soon as they reached 10.

20 years have passed.

There was no "sunset" clause in the legislation, no statute of limitations in effect.

Neither the Pay Equity Commission, nor one of its Tribunals, has ruled that it is inherently foolish to believe that one can go back 20 (or even 10) years to determine what jobs were worth.

And so Review Officers from the Pay Equity Commission respond to complaints, or the Commission's own audits, by requring the original Pay Equity Plan to be produced, with evidence that it has been maintained.

If there are Unions, each requires a separate, maintained Plan - and of course, an agreed contract with the union is no defence:  Pay Equity supercedes the contract.

How to prove implementation and maintenance of Pay Equity? For most employers, it is a quagmire that soaks up time and money.  And no, nothing had to be filed with the Pay Equity Commission, and so no, they won't have a copy of the Plan.  We have not known the Commission to have a copy of a Pay Equity Plan, even when a Review Officer has been involved.

How to prove Implementation of Pay Equity

Start with finding or starting again to develop, a Pay Equity Plan (or Plans), from sonewhere around 1991-1994, and then produce:

  • The Gender Neutral Comparison System (Job Evaluation System)

  • Scores awarded for each job

  • Records of pay and the cost of benefits

  • Job Descriptions (or some other documentation)

  • The gender of the people in the jobs

  • For Public Sector employers with insufficient Male Job Classes, information about the Proxy Comparator's jobs, pay, and job scores

How to Prove Maintenance of Pay Equity

For each year since the Pay Equity Plan was developed, show evidence that pay relationships required under the Plan were maintained, and that changes in jobs, or the creation of new jobs, were taken into account.  This will include:

  • Scores awarded for new or changed jobs

  • Records of pay and the cost of benefits

  • Job Descriptions (or some other documentation)

  • The gender of people in the jobs

  • Regression lines drawn to demonstrate compliance for jobs that did not have a male Comparator

  • For Public Sector employers who went to Proxy, information about the way payments to employees were distributed annually (regardless of funding)

Many employers are not in compliance with Ontario Pay Equity legislation.  A large number of CEO's, CFO's, or owners of companies (particularly if from outside Canada) are blissfully unaware that they may have a potentially crippling retroactive liability.

A mere 50 cents an hour increase for one employee over 15 years would be about $15,000.  We were called into an employer where the possible retroactive Pay Equity cost for one job with multiple incumbents was several million dollars.  We demonstrated that the complaint was spurious, but the dangers to employers are obvious.

No wonder unions like to revisit old pay equity obligations.  They are jointly responsible for meeting Pay Equity requirements, but not for the cost.

Of course, it has been argued that employers have got away with paying noncompliant salaries to employees of "female job classes" for years, and should be forced to pay up.  But who is to say what job and pay relationships were a decade or so ago?  Many, especially those who have had to do it, believe that it is patently absurd to have to reconstruct pay equity into the last decade.  But there is no choice.

Absurd or not, many employers are blissfully unaware that when their number comes up for an audit by the Pay Equity Commission, or a disaffected employee complains, or the Union decides it is time to raise the topic of Pay Equity... someone will be optimistically hunting in the warehouse boxes title "Pay Equity" and hoping that at the very least they won't have to start again from scratch.

Need help?  We can carry out a confidential review, and tell the employer where they stand.

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