Only two Canadian provinces, Ontario and Quebec, have pro-active pay equity laws requiring public and private sector employers to examine their pay structures for systemic discrimination in wages. The current federal law has resulted in some gains for some women, but is seriously flawed. It requires someone to complain, it is costly to use, and it takes literally decades before pay equity settlements result.

History

The Ontario Pay Equity Act was introduced in 1987, and was the first important step to recognizing the value of women’s work and eliminating discrimination. The Pay Equity Act came into effect because of the efforts of the Equal Pay Coalition and thousands of women across the province who lobbied for legislation that recognized their worth in the workplace.

The Act requires employers to take positive steps to pay “women’s work” on the same basis as “men’s work.” The legislation has had a very visible effect: Ontario's wage gap between male and female full-time annual earnings has narrowed significantly since 1987 when the Ontario government first passed a proactive pay equity law.

Pay equity plans identified substantial pay gaps where “women’s work” was being paid substantially less than “men’s work” because of systemic discrimination in traditional wage-setting policies. Many private and public sector employers, including the Ontario Government itself were required for the first time to recognize the true value of women’s work and begin to pay for it. This was unprecedented.

Steps in achieving Pay Equity

The work of the Equal Pay Coalition in improving the Act has been ongoing, and since the original Act came into effect, amendments to the legislation were added on July 1, 1993, 1996 and 1997. In summary, the Act sets out that:

  • All public sector employers and all private sector employers with 10 or more employees are required to achieve pay equity by eliminating wage discrimination and by maintaining discriminatio-free wages into the future.
  • Achieving pay equity is accomplished through a self-managed process or, in union workplaces, a negotiated process.
  • Jobs performed predominantly by women are the focus. The content of jobs is compared, not the performance of the people doing the jobs.
  • Jobs with similar duties and responsibilities, similar qualifications and recruiting procedures and the same compensation, are grouped into job classes.
  • Job classes are identified as male, female, or gender neutral on the basis of current and historical incumbency and gender stereotypical fields of work.
  • Female job classes are compared to male job classes using the factors of skill, effort, responsibility and working conditions.
  • The employer, and in union workplaces, with the bargaining agent, must define these four factors in a manner that does not favour men's jobs over women's jobs.
  • Not all workplaces are structured the same: some have both male and female jobs, others have very few male jobs, and some have no male jobs at all. As a result, the Act sets out different ways to compare wages which are tailored to suit different kinds of workplaces. These mechanisms are called:
    • job-to-job comparison;
    • proportional value comparison; and
    • proxy comparison.
  • Job-to-job comparison can be used where a workplace has both male and female jobs which are of similar value. If a female job class is found to be of equal or comparable value to a male job class, but the male job class is paid more, the female job class must get at least as much as the male comparator.
  • If a female job class is found to be of equal or comparable value to a higher-paid male job class, then the female job class must be paid at least the same.
  • If a female job class cannot be directly compared to a male job class of equal or comparable value or one that has a lower value but is more highly paid, an indirect comparison method (proportional value) must be used to determine if pay equity exists for the female job class. Proportional value comparisons are done by plotting a male wage line (or conducting regression analysis) which measure the ratio of job value to pay for all male job classes. The female job classes are then also plotted. If they fall below the male wage line, the female wages must be raised to bring them up to the male wage line.
  • Broader public sector employers who cannot achieve pay equity using either the job-to-job or proportional value comparison method must do proxy comparisons. Proxy comparisons can only be used in the publicly funded broader public sector which includes services such as day cares, nursing homes, and community support services. These publicly funded jobs are compared to the same jobs in specified public sector institutions that have been able to identify pqy equity wages using either job-to-job or proportional value comparisons.
  • No employee's pay can be lowered to achieve pay equity.
  • All employees working in female job classes will receive pay equity adjustments if their job class was found to be lower paid than the male comparator.
  • The Act does not affect the compensation of male and gender neutral job classes.

Closing the Gap: Real-life examples of wage adjustment

Here are just a few examples of the inequities which were identified after the introduction of the Act and the pay equity adjustments which were won.

  • secondary school secretaries received an annual increase of $7,680 based on their comparison with a male job class of audio-visual technicians.
  • female health technicians were compared to male transportation workers, leading to an increase of $2.79 an hour.
  • female-dominated mental health workers were compared to the male personnel officer's job, resulting in a pay equity raise of $2.20 per hour.
  • female-dominated police dispatchers were compared to the radio technical supervisors and received an increase of $7,179.00 annually.
  • a female job class of law clerk was compared to the male job class of investigator, resulting in a $4.28 per hour adjustment.
  • at a baked goods manufacturer, the female job class of personnel manager was compared to the male job class of service manager, resulting in an adjustment of $4.65 per hour.

No other single law in Canada has resulted in such concrete results for so many working women right where it counts - in their pay cheques and benefits. Women who received these adjustments were able to better support themselves, their families and the communities in which they live. Recognizing the value of their work contributed to empowering women and increasing their self-esteem.

Countless studies have shown that society and employers have ignored and undervalued the characteristics associated with women's work. Equal pay laws which relied on the most vulnerable members of the workforce to complain did not result in any significant progress in reducing the wage gap. Not surprisingly, without a proactive pay equity law, employers are unwilling to voluntarily increase their labour costs to end discrimination. Even with a law, numerous employers in Ontario have tried to ignore or minimize their pay equity obligations.

Lessons to be Learned from Ontario

Ontario's pay equity law continues to be internationally recognized as one of the world's most effective laws in redressing the wage gap. This is because of the comprehensiveness of its model which combines legislative, collective bargaining, adjudicative and enforcement mechanisms to arrive at an effective pay equity result.

Ontario's proactive model brings together the strengths of a human resource planning process and a human rights enforcement approach which allows employers and unions to work together to meet the law's time limits and obligations. This encourages a results-based, problem-solving approach and helps to avoid adversarial fault-finding. It recognizes that wage discrimination is not an individual but a systemic problem which requires a systemic solution. Placing the responsibility on employers also recognizes that it is unfair to place the burden of enforcing the law on individual women who are already disadvantaged. Because the law requires all employers to comply, it meets employers concerns that there be a level playing field for businesses.

Unions achieved the greatest successes in redressing the wage gap for women's work under the Act in terms of real dollars. This is because the Act required employers to negotiate pay equity plans with any bargaining agent whereas non-organized employers were left on their own to redress the wage gap without any outside control unless an employee complaint was filed. Unions played a particularly important role in negotiating plans to provide for pay equity in the traditionally low-paying female ghettoized service occupations such as hospitals, nursing homes, community services, shelters and home support services.

This is not to say that Ontario's law and enforcement process did not have weaknesses. Pay equity has been achieved for some but not nearly all women in Ontario. Critical to the future successful implementation of pay equity in Ontario is addressing the needs of non-unionized women. Often disadvantaged not only by gender, but also by race, ethnicity and disability, non-organized women have for the most part been unable to effectively access the benefits of the legislation. This problem cries out for a strengthened law with monitoring, not no law as some critics maintain. Special supports must be given to non-organized women, such as funding for pay equity legal clinics.

An expert commission and hearings tribunal is also essential to effective enforcement. Commission staff provide valuable advice to employers, unions and non-organized employees in ways that help avoid unnecessary costs, reduce time and promote consistency. High consultants fees can be avoided if employers are willing to use a commission's resources to help them comply rather than hiring a consultant to find loopholes. The Equal Pay Coalition is lobbying the Ontario Government to ensure that such measures are taken.

Can We Afford Equity?

Some argue that Ontario cannot afford to be leaders on "social justice" issues. They say that pay equity laws which have increased the real wages earned by "women's jobs" must be ended as a too costly frill that interferes with global competitiveness. What these critics are really saying is that employers should be given the freedom to pay discriminatory wages because society can't afford fairness.

Pay equity is not a privilege or a frill. It is the law. The right of those doing "women's work" to be paid on the same basis as those doing "men's work" is a fundamental human right of Ontario women which is guaranteed by provincial human rights laws and by international commitments made by Canada to ensure women's equality in employment.

Given that little progress was made by working women during the "good economic times", Ontario women are not ready to give up their right to economic justice so that employers can become collectively more prosperous at their expense. Instead, society's "best interests" must be seen as including the right of women to equality. Forward-looking businesses and governments should recognize that women workers are key to their economic futures. Ontario businesses need consumers with money in their pockets. Pay equity is one way to achieve that.

The world communities at the 1995 United Nations Fourth World Conference on Women agreed that equality for women and pay equity is not a luxury but a prerequisite for a sustainable world economy. Pay equity laws are there to make the market actually do what it says it does - treat and pay all workers fairly.

Backgrounder: Major dates in Pay Equity advocacy in Ontario

Below are some of the major developments in the application and funding of pay equity in Ontario since the implementation of the Pay Equity Act.

1988 Pay Equity Act comes into effect. The government recognizes that the job-to-job comparison method cannot be implemented in predominantly female workplaces (e.g. child care centres) where there are insufficient male job classes for women to compare their wages to. Yet it is predominantly female workplaces where wages are the lowest because the work is seen as "women's work". To remedy this, the Act requires a report on wage discrimination in these workplaces to develop an appropriate new comparison method.

1989 Pay Equity Commission Report recommends two new comparison methods:
Proportional: Where there are a small number of male job classes in a workplace, value can be assigned to the work performed by those classes, allowing women to identify the appropriate wage rate they should receive for the work they do.
Proxy: In workplaces with fewer or no male job classes, a similar larger workplace nearby is used as a "proxy" comparator, because that workplace has already identified the wage gap between men and women using the job-to-job method. Eg. a nurse at a nursing home can be compared to a nurse at a municipal home for the aged.

1990 Start date for pay equity for the job to job method. Minister of Labour, Bob McKenzie announces the intention to implement proportional and proxy comparison methods for women in predominantly female workplaces and to fund all public sector pay equity adjustments.

1991 Treasurer, Floyd Laughren commits to fully funding public sector pay equity. Amount to total $1 billion annually at maturity. Chair of Management Board of Cabinet also commits to 100% funding for proxy sector noting that pay equity is a right not a luxury and that recessions hit lowest paid workers the hardest.

1993 Bill 102 is passed, legislating proportional and proxy pay equity.

Minister of Labour again commits to providing full funding for pay equity adjustments. Ontario issues Pay Equity Funding Guidelines and reiterates commitment to 100% fund proxy pay equity. Ontario will fund 3% of payroll in first year and 1% for each following year until pay equity is achieved.

1994 Proportional values and proxy pay equity adjustments start date. Predominantly female workplaces begin using proxy comparators to identify the discriminatory wage gaps between workers in comparable male and female job classes. Unions and employers begin preparing "proxy plans".


1995 Tories elected. Tories cap public sector pay equity funding at $500 million annually as follows:

Ontario Public Service $120 million

Workplaces using Job-to-Job/Proportional Methods $249 million

Proxy Workplaces (3% of employer's payroll) $62 million

Pay Equity Downpayment Program $50 million

Special (eg. Homemaker wage rate reform) $19 million

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Total $ 500 million


Ontario introduces Schedule J to Bill 26 - Savings and Restructuring Act, 1995 amending the Pay Equity Act. Schedule J abolishes the proxy method of comparison and eliminates the obligation for proxy workplaces to pay further adjustments above the cap 3% of payroll.

1996 Schedule J passed - Proxy Comparison method abolished, funding capped. |

Charter Challenge - SEIU Local 204 and two women launch a challenge of Schedule J.

1997 Government defends the challenge, stating the proxy method did not identify pay discrimination and was too expensive to fund. The government had therefore taken away proxy employers’ legal obligations to pay further pay equity adjustments.
Mr. Justice O’Leary rules in SEIU Local 204 v. Attorney General . Finds Schedule J violates women's equality rights under section 15 of the Charter in that it discriminates against women in proxy sector workplaces, the women whose wages are most discriminatory compared to men. Justice O'Leary also rules that the proxy comparison method is a valid mechanism for identifying wage discrimination. Then Ontario Premier Mike Harris states Ontario will "honour and support our pay equity commitments". Finance Minister Ernie Eves announces Ontario will not appeal the decision and will make sure proxy employers "not only obey the decision but have the ability to live up to and fund the decision". Ernie Eves announces:

$140 million in retroactive proxy pay equity funding. Funding to be paid on a one time basis to cover proxy pay equity adjustments owing for 1995, 1996 and 1997.

500 million cap still in place. $500 million cap for pay equity for all public sector employees, including proxy workplaces, is still in place. Employers and employees asked to agree on a fair distribution of the annual capped pay equity funding.

1998 Pay Equity Commission advises employers that proxy is reinstated and they must make annual 1% of payroll adjustments until pay equity is achieved. Public sector employers using job-to-job and proportional to achieve pay equity achieve pay equity Jan.1.
KPMG is retained by Government to consult with public sector employers and employees on how to divide $500 million. KPMG reports unanimous message: Government must fully fund pay equity adjustments for all public sector women regardless of the method of comparison. Pay equity is not possible without funding. Government refuses to release the report.

1999 Annual proxy pay equity adjustments not paid.

Government pays retroactive adjustments owing up to January 1, 1998, and advises employers that they are responsible for all further annual adjustments required by the Act.

Employers, unions and the Equal Pay Coalition lobby Government to abide by SEIU 204 decision and fully fund proxy pay equity. Minister of Finance replies: pay equity is "part of the cost of doing business", proxy employers "are responsible for meeting their current and future obligations".

2000 Annual proxy pay equity adjustments not paid.

Government tells proxy employers they must find funds for pay equity within their existing budgets. Pay Equity Commission tells proxy employers that layoffs, reducing hours of work, or eliminating positions in order to find money for pay equity adjustments may violate the Pay Equity Act.

Ministry of Labour 2000-2001 Business Plan states that one of its core businesses is ensuring enforcement of the Pay Equity Act and a target is increasing rates of compliance with the Act by 20% over the next 5 years.

Proxy employers and organizations write continuously to the Ministry requesting pay equity funding, stating that they cannot continue to provide necessary public services and meet their obligations under the Pay Equity Act without adequate funding. Ministries continue to refuse further funding.

Government releases Budget trumpeting a booming economy, a balanced budget achieved one year early, an over-achievement in the deficit reduction target, the Contingency Reserve Fund doubled to $1 billion, while generating necessary revenues " to pay for valued public services". At same time as government trumpets the strength of the economy it is saying no to paying women performing public services equitable wages.

Pay Equity Hearings Tribunal issues decision in Kensington Village Nursing Home v. SEIU Local 220. Tribunal states lack of government funding is not a defence to a proxy employer’s failure to provide pay equity adjustments.
Third Quarter figures issued by Government note projected 2000-2001 surplus of $1,411 million, up $45 million.

2001 Annual proxy pay equity adjustments not paid. Total owing now to women of $140 million.

Charter challenge filed by CUPE, ONA, OPSEU, SEIU, USWA and 4 female applicants. Applicants ask the Court to order the government to provide the funds needed for pay equity. Hearing anticipated in the Winter of 2002 - 2003.

2003 Charter challenge is settled, resulting in payments of $414 million to 100,000 women over 3 years.

The claim asserted that the government was perpetuating wage-based gender discrimination by failing to fund on-going pay equity adjustments to workers in predominantly female workplaces who use the proxy method to identify the discriminatory wage gap between themselves and male job classes. This violates Section 15 of the Canadian Charter of Rights and Freedoms.

The government has agreed to make its best efforts to distribute the funding to proxy pay equity employers “as quickly as possible” and no later than the following dates:

  • The 2003-2004 funding for base pay equity adjustments will be provided no later than December 31, 2003.
  • The remaining 2003-2004 funding for current and retroactive pay equity liabilities will start no later than March 31, 2004 and will be paid out in part over the next 3 years.
  • Funding for the 2004-5 and 2005-6 fiscal years will be provided to employers as part of the customary budgeting process.
  • The agreement also includes accountability measures to insure that proxy employers comply with their pay equity obligations and that the funding required for any such adjustments is properly reflected in budget requests.


2006 Proxy funding under 2003 settlement ends.

2014 Government estimate of the year in which women in the proxy sector would achieve pay equity if payments of 1% payroll were made according to the Pay Equity Act. The annual mature cost of proxy pay equity by this date is at estimated at $484 million annually.

 

Equal Pay Coalition: Correspondence with the Commission 

EPC Letter to the Commission - July 18, 2007

Commissioner response - July 25, 2007

EPC Update on Campaign, Letter to the Commission - August 13, 2007

Commissioner response - August 25, 2007