Pay equity

: Time to total up

November 21 marks an important date for salary equity. In principal, from now on women will earn an equal salary for an equivalent job.

Three major dates mark the Pay Equity Act: it’s passing in 1996, the deadline for theéquité salariale salary equity comparative evaluation of jobs in 2001 and the completion of changes by November 2005 at the latest. The salary recovery could be spaced out from 2001 – 2005. All delays entail an interest payment at the legal rate, which is currently 5%.

Even though the law only applies to companies with ten or more employees in the 12 months following November 21 1996, those who have less are not exempt from all obligations. The Charter of the rights and freedoms of the person in Quebec mentions, in article 19, that “Any employer must, without discrimination, grant a treatment or wages equal to the members of his personnel who achieve a work equivalent to the same place.” The Commission of wage equity (CÉS) regularly receives complaints and enquiries on the infringements of this article.

The law models the obligations in terms of the size of companies. In this way, only companies with over 100 employees are required to create a pay equity committee. This committee is forced to evaluate jobs in the company according to a frame determined by the law.

Companies with between 10 and 49 employees determine whether salary adjustments are necessary, but they are at the discretion of having the means to carry them out. The measures suggested by the CÉS are optional.

All companies must post the results of their evaluation and allow their employees to comment on them. They must also inform them of the appeals anticipated by the law in case of disagreement.

Where are we at?

What is becoming of the Pay Equity Act? Last year, two thirds of companies with 10-49 employees had completed their job evaluation and respected the pay-back deadlines. This proportion rose to 80% in companies with over 50 employees.

“The majority of companies did not take advantage of the possibility of spacing out payments until November 2005, points out Martine Bégin, General Secretary of the Commission of wage equity. They paid the adjustments required by law in one installment.”

You can see a number of delays. Where is the stick in the wheel? “The law demands a cultural change in the whole of society, including employers, observes Martine Bégin. Women’s salaries are tainted by a historically discriminatory social evolution. Women’s salaries are no longer considered to be equal, but that historical discrimination has not been corrected in all companies.”

“In small companies, she adds, there often exists neither salary structure nor job description. But, the practice of pay equity presupposes the accomplishment of these steps. That represents a second cultural change. However, cultural change takes some time.”

The General Secretary of the CÉS observes an even larger difficulty in applying the law in non-union companies. “We have created a program for closely monitoring these companies”, she mentions.

The law anticipated several exceptions. Thus, the law on municipal unions postponed the job analysis to November 2005 for towns concerned. That concerns some hundreds of employers out of 45 000 affected by the law.

Another exception: companies related to the regulation on pay equity in companies where predominantly male job categories do not exist, in effect since May 5 2005, have until May 2007 to analyse their jobs. They then have four years to carry out payments. This regulation concerns about 2000 companies.

The CSN attributes this delay to the Commission. “As for female environments exclusively, it suggests, the delays are partly explained by the Commission for wage equity’s own negligence, which waited until the end of last May to issue its regulation. It even knew since 1996 that it would have to react in this respect.”

Another cause of delay: In January 2004, the Supreme Court invalidated chapter IX on the Pay Equity Act. Companies could therefore no longer boast of having already established an equity process to conform to the law. Several employers, including the Quebec government, must now respect legislative measures. Some 200 companies who invoked this part of the law must respect the legislation as if chapter IX had never existed. No allowance is given to them.

Employees for whom pay equity has not been respected can take their complaint to the CÉS. If it undergoes retaliation as a result of this appeal, the CÉS can address the Public Service Labour Relations Board to demand a fine from 1 000$ up to 25 000$ as well as enforcing reintegration to the job if there is a place. It is up to the employer to prove that they did not react in retaliation.

A calm atmosphere

Despite the pitfalls, the owner-union cooperation seems to be going well on the subject of pay equity. “The task of job evaluation is complex, recognizes Dominique Malboeuf, coordinator of the evaluation of jobs for the Canadian Union of Public Employees. Sometimes we have to evaluate 200 to 300 positions in the same company. In this case, the task with the employer is carried out in a calm atmosphere. Of course there can be discrepancies, but very few confrontations.” Nevertheless, the union advisor notes that there was a big delay at the beginning of the job evaluation task, at the turn of the new millennium.

“We insist that discussions relating to pay equity take place outside the context of collective labor agreement negotiations, states René Roy, General Secretary of the Federation of the workers of Quebec. That’s generally the case. In this sense, negotiations in the public sector constitute a very bad example.”

The Council of the employers of Quebec is reserving any comments until next February. As for the Canadian federation of the independent company, it pointed out in a press release on November 21 that they wanted a simplification of the measures put at the disposition of SME.

The benefits

For the tally of the Commission of wage equity, Léger Marketing produced a study in 2002 concerning companies with 10 to 49 employees. Overall, out of the companies which completed the evaluation, the practice of pay equity improved the situation for 30% of workers. One survey respondent in two having benefited from the practice obtained a rise of at least 50 cents per hour, while only one in ten judged that their rise lingered between one dollar and 1,49$.

Being the biggest number to receive a salary adjustment, secretaries came out the big winners of the practice. Indeed 34% received a rise with an average of an 8,4% increase.

The survey revealed that for 67% of companies, the impact of the adjustments represented less than 2% of the payroll. As for the administrative costs of the practice, they came to at least 1000 $ for 62% of companies.

The Commission will carry out a survey during the course of the first year for all the companies.

The SME also benefited. A survey carried out by the Canadian federation of the independent company in 2003 highlights that almost three employees in four believe that the pay equity process permitted the clarification of employee tasks and two-thirds believe that it improved the salary structure. The third positive effect according to the SME: the reevaluation of jobs in customer services.

Time to total up

The Pay Equity Act plans that the Minister of Labour should submit a report on the enforcement of the law on November 21 2006. It is for this reason that in November 2005 the CÉS started a consultation period for employers associations, unions, women’s rights groups, experts, etc.

“The Commission presented its official reports to its partners, underlines Martine Bégin. In March we will submit our solution proposals and new guidance, on which we will base out consultations until September 2006. Then we will present our report to the Minister.” The Minister will decide what he will keep from it and will then submit his own, which will be the object of a parliament commission.

At least two issues seem to stand out: How to make sure that all the small companies with 10 to 49 employees assume their obligations regarding pay equity and how to check that each company, regardless of its size, maintains the pay equity afterwards.

“The more precise the law is on the way to reach pay equity, the more likely it is to maintain equity afterward, claims Martine Bégin. Therefore, pay equity is a new law. Apart from Ontario, there are few examples in the world. We will have to promote it.”

The CÉS has also launched a consultation on its website where you can find abundant information on the application of the law: www.ces.gouv.qc.ca

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