Thirty years after Ontario brought in the Pay Equity Act — the first law of its kind in the world — the gender wage gap has not gone away. Women continue to earn less than men, are over-represented in lower-paying occupations and industries, and make up a disproportionate share of employees in minimum-wage and part-time positions.
The Act and the regime it established combat discrimination that results in lower pay for women in “female job classes,” jobs that have historically been undervalued: in personal and health care, child care and other social service work, secretarial and administrative support. Progress has been made: in the past two years alone, employees in female job classes in Ontario have received over $10 million in pay equity adjustments, a significant boost for individuals, their families and their communities.
All Ontario private sector employers with 10 or more employees and all public sector employers are required to ensure that their compensation practices provide for pay equity. The Act tells employers how to do that, step by step:
- Compare female and male job classes in terms of compensation and value
- Determine the value of the work using a composite of skill, effort, responsibility and working conditions
- Apply defined methods of comparison
- Adjust the pay rates of female job classes so that they are at least equal to the pay rates of comparably valued male job classes
- Maintain pay equity so that gaps do not recur
Enforcing the Act
The Act places the responsibility on employers to ensure that their compensation systems are pay equity compliant. It also provides a complaint mechanism, but employees are often reluctant to stand up for their rights when they experience gender discrimination, especially from their current employers. The provincial enforcement agency, the Pay Equity Office (PEO), investigates complaints but also takes an energetic approach to enforcement through its proactive monitoring activities.
In the last 10 years, the PEO has conducted several types of monitoring programs. The Service Industry Monitoring Program covered the hospitality and retail sectors. It reached about 4,000 organizations and assisted over 1,000 employers to bring their compensation practices into compliance.
The Wage Gap Pilot Program in 2011 was an exercise in outreach that allowed the PEO to test criteria it had developed for assessing gender wage gaps. More than 80 percent of employers that received a survey responded voluntarily with their compensation data. More than half of responders were found to have a gender wage gap in their organizations. The PEO then began monitoring to assist these organizations in becoming pay equity compliant.
In 2015, the PEO sent outreach and pay equity awareness letters to 14,000 new businesses, to make them aware of their obligations and the various tools available through the PEO to assist them and to alert them to the possibility of being monitored.
Currently, the PEO is investigating a group of public sector organizations including the transportation agency Metrolinx, Public Health Ontario and the Ontario Lottery and Gaming Corporation. It continues to monitor the new employers contacted in the previous outreach effort.
Education and research are also important parts of the proactive work of the PEO. Guides and web-based interactive tools allow organizations to educate themselves about the pay equity process and analyze their compensation practices using their own data. The Gender Wage Gap Grant Program has supported original research and targeted outreach campaigns, encouraging a wider dialogue among academics and others to examine aspects of pay equity and the broader issue of the gender wage gap.
The future of pay equity
The Ontario Minister of Labour is developing a strategy to close the gender wage gap in the context of a modern economy. In August 2016, he received recommendations from the Gender Wage Gap Strategy Steering Committee. The strategy development process and the 30th anniversary of the province’s pay equity legislation provide an opportunity to consider how to strengthen the Act and the work of its enforcement agency.
The Act requires employers to ensure that pay equity is both implemented and maintained. Changes to an employer’s staff and operations can easily result in shifts in the pay structure that cause pay equity gaps to emerge.
The Pay Equity Office has found that once employers are aware of their obligations and are given the tools to comply, they are more likely to do so, because they realize that gender bias in compensation is not acceptable. But they may be less aware of the need for ongoing updates. In unionized workplaces, collective bargaining agents look out for changes by the employer that may impact pay equity; there is no mechanism to trigger pay equity maintenance in nonunionized enterprises.
Broadly targeted public awareness campaigns alone are not enough to reach all employers and ensure that they know about and meet their ongoing pay equity obligations. To support long-term compliance, and to normalize pay equity as an expected component of compensation, the Act should be strengthened to better define how and when maintenance should occur, and how far back pay equity adjustments should be made. Another improvement to the Act that would benefit everyone would be the introduction of a reporting process. Reports would help employers by ensuring a regular and consistent way to assess changes that may have a negative effect on pay equity compliance. Employees would be kept alert to potential pay equity issues. For the PEO, the reports would allow for more strategic enforcement and better measurement of the legislation’s impact.
By objectively valuing work, arranging for wage adjustments and providing workers in female job classes with the legal protection they need in seeking equitable pay, Ontario’s pay equity regime contributes significantly to achieving equal pay for work of equal value. As the Minister of Labour develops a new strategy to close the gender wage gap, improving this regime must be a high priority.
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