For Ontario employers, pay equity compliance journey is an ongoing process and not a one-and-done exercise, said Will Lamond, a principal in the compensation practice at Normandin Beaudry, during a webinar on best pay equity practices in the province.
Ontario’s Pay Equity Act requires employers with 10 or more employees to maintain equivalent levels of pay for men and women, he said, noting compliance begins with determining establishment, which is defined as all employees — men and women — of an employer working within a specific geographic division or region. For employers with multiple locations across different regions of Ontario, they have the option of combining these locations and treating them as a single establishment.
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From there, employers then establish job classes and identify whether they are predominantly male of female. Generally, a job class is considered predominantly female if 60 per cent or more of its members are women, while jobs defined as predominantly male if men make up 70 per cent of the workforce. Lamond noted if a job class doesn’t meet either of these thresholds, it may be classified as gender neutral.
“There’s no single right answer to determine gender predominance and the Act requires a comprehensive approach, careful analysis and consistent documentation.”
Also speaking during the webinar, Yijia Liu, an associate consultant in the compensation practice at Normandin Beaudry, said employers must then choose an evaluation model and determine the value of work to start, typically through direct observation of tasks, interviewing employees, distributing questionnaires or developing job descriptions.
“It’s important to note the Act does not mandate a specific way to collect this information,” she said. “Instead, what matters most is that the evaluation focuses on the actual content of the job, rather than how individual employees perform their work at this stage. The goal is to systematically assess the work performed in each job class within your organization.”
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While the point factor method is currently the most widely-used evaluation approach, employers aren’t required to use any specific model, said Liu. She noted the Act requires every evaluation model to consider four fundamental factors: skills, responsibilities, mental and physical effort and the conditions under which the work is performed.
Employers must then determine the job rates for each job class, including total intended compensation. This means considering both direct and indirect elements of compensation, including base salary, bonuses, group benefits and retirement plans.
“The emphasis is on the target or maximum compensation offered for a job class, not the actual pay of individual employees,” said Liu.
Finally, employers can conduct a wage gap analysis by determining differentials that exist between predominantly female and predominantly male job classes of equal or comparable value. If gaps exist, employers must address them in order to achieve compliance, said Liu.
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Lamond noted there are specific rules that must be followed to ensure compliance with the Act. Every female-predominant job class identified as requiring an adjustment must actually receive one until pay equity is fully achieved for that class. It’s also important that all incumbents within a female job class, including any male employees, receive the same adjustment.
The Act also requires employers’ pay equity plans to ensure the lowest-paid female job class that’s due for an adjustment receives a larger increase than the other job classes or is brought up to pay equity before others can receive partial adjustments.
While the Act requires employers to maintain pay equity, it doesn’t prescribe a process or a deadline for doing so, said Lamond. “As a result, each organization should choose a maintenance approach that fits their schedule and resources, as long as it supports continued compliance. A good best practice is to conduct a pay equity maintenance review, at minimum, on an annual basis.”