The Pay Equity Act in Ontario has been in place since the 1980s. As we know from our studies, this legislation requires employers in Ontario to ensure that compensation levels for the value of work between traditionally designated ‘male’ and ‘female’ jobs are paid equally.
The pay equity process itself is extensive and exhaustive. It is also expensive, if compensation adjustments need to be implemented based on the results of the process. As this is a legislated issue for public sector employers in Ontario, it makes sense that public sector organizations will comply with this mandatory requirement.
Apparently not.
Recently, OPSEU (the union representing employees working with Community Living in Tillsonburg) issued an open letter as a result of the inability of Community Living to make the mandatory pay equity adjustments for its employees.
Click here to read the letter.
Why would any employer choose not to pay, when it is required to do so by law? As with most compensation dilemmas, the issue of affordability comes into play. A news article linked to this story provides an important insight into this seemingly simple pay issue.
Click here to read the article.
Public sector organizations receive their funding from the government. There are very strict parameters in place as to when and how the funding can be used, especially as it is linked to compensation. Given that the government will not fund pay equity adjustments, how can organizations like Community Living pay for mandatory wage adjustments if they do not have the money? It seems to be a Kafkaesque dilemma, as the government requiring the wage adjustments is the same source for funding that will not support the payment of these mandatory adjustments.
In the end, the employer is left holding the bag containing an unfunded liability and an unhappy workforce, which makes a heavy burden for the Compensation Manager to carry.
Discussion Questions:
- If you were the Compensation Manager for a public sector organization required to make Pay Equity Payments, what steps would you include to design an affordable compensation plan?
- Who should be responsible for ensuring funding for pay equity costs in the public sector? Explain your rationale.