Pay Equity Information Guide

Section 11 of the CHRA requires that jobs be compared within the same establishment. Section 10 of the Equal Wages Guidelines, 1986 will help you define your establishment. For a further explanation of the concept of “establishment,” please see Section 2 of this guide.

For most employers, “establishment” will mean all of your employees. If you are uncertain of the nature, scope and possible divisibility of your establishments, please contact your closest Labour Program office.

The nature of the employment relationship can be difficult to define. Many tests are available to help you determine whether the people working in your establishment are employees or contractors. In case of doubt, contact your closest Labour Program office.

Having determined the establishment, the next step is deciding how to analyze the employee population, so that all pay inequities based on gender can be identified and eliminated.

Identifying occupational groups and determining their gender predominance are essential steps before deciding which jobs to evaluate.

Sections 12 to 15 of the Equal Wages Guidelines, 1986 refer to an “occupational group” but do not provide a definition. This leaves some flexibility in determining which jobs should be grouped together to form an occupational group for the purpose of comparing male and female predominant groups when implementing pay equity.

Occupational groups may be defined narrowly or broadly, as appropriate for the size and nature of the establishment concerned. The following criteria will help you identify suitable groups:

• jobs characterized by work of a similar nature, including skills and responsibilities (i.e., financial analyst, financial accountant);
• jobs that have the same basic qualifications;
• similar career patterns and interchangeability of personnel; and
• jobs already grouped together for compensation purposes; for example, management and administrative jobs.

Once the occupational groups have been identified, the gender predominance of each group can be determined. Gender predominance is determined by the number of employees of each gender in that job or group.

Section 13 of the Equal Wages Guidelines, 1986 sets out the criteria for determining the gender predominance of a group in the event of a complaint. The same criteria should be considered when conducting a pay equity study. The definition of gender predominance is: 70% if the occupational group has fewer than 100 employees; 60% if the group has more than 100 but fewer than 500; and 55% if the group has 500 or more.

If an occupational group does not meet the criteria for gender predominance under section 12 of the Guidelines, the group is considered neutral and is not used when comparing occupational groups for pay equity purposes.

Smaller employers may wish to take a systematic approach to pay equity by ensuring that all jobs of equal value in the workplace receive equal compensation. However, by law, the employer is only required to compare female jobs with male jobs of similar value within identified occupational groups, and female-dominant occupational groups with male-dominant occupational groups.

To be appropriate for pay equity purposes, a job evaluation plan must be reliable, gender-neutral and assess the four mandatory criteria of skill, effort, responsibility and working conditions as provided in sections 3 to 8 of the Equal Wages Guidelines, 1986. It should also:

• reflect the range of work found in a particular establishment and capture that organization’s values; and
• be capable of measuring all jobs in the establishment, (i.e., from top to bottom).

While many job evaluation plans exist, the most widely used for pay equity purposes are point-factor plans. These plans allow employers to place a numerical value on the work that is being performed. Points are assigned to jobs, factor by factor (i.e. skill, effort, responsibility and working conditions) and are totalled to establish the total value for the job. Jobs are then compared based on the overall point value.

You may use multiple job evaluation plans in your establishments. However, only one of these job evaluation plans can be used for pay equity purposes. If multiple plans are used on a regular basis, periodic studies should be carried out to ensure that pay equity is being maintained.

Job analysis and documentation involve collecting accurate information about each job. This may be done in several ways, such as through job descriptions, interviews or questionnaires. The product is then used for job evaluation purposes.

The job description or questionnaire must take into account all the requirements necessary to perform the work in a fully satisfactory manner. It should not consider the attributes of the person occupying the job. For example, in capturing the job information for a junior technician position, only those skills required to perform the work of a technician should be considered, even if the incumbent has skills that exceed the requirements of the job.

Job descriptions or questionnaires should be current, accurate and consistent. You may use existing job descriptions, or you can modify them to meet these goals. To help ensure consistency, pre-designed job questionnaires, structured interviews and other data sources are useful. These tools help reduce possible analyst bias. Always verify the accuracy of the descriptions with the supervisor and the employee performing the work.

Accurate, gender-neutral job descriptions or questionnaires are critical. Certain aspects of jobs historically occupied by women are frequently overlooked, for example, responsibility for protecting confidentiality, prolonged standing, or stress from multiple demands.

Tips for controlling bias during the processes of writing job descriptions and evaluating jobs can be found in Section 6 of this guide.

Job evaluation is a systematic process used to determine the value of jobs based on job information. Job evaluation is concerned with jobs, not with people in the jobs. To take the example from the preceding section, raters must not take into consideration that the incumbent has a Ph.D in Science when determining the value of the junior technician’s job, which only requires a B.Sc.

To control bias in job evaluation, consider using the services of a job evaluation committee. Committees should include men and women, as well as union and non-union representatives. Give committee members accurate and detailed job information, as well as access to resources in case they require more clarity or information about job content and the evaluation method. This will help to increase the accuracy and consistency of the ratings and control bias toward or against certain types of work.

Once the initial job evaluation process is completed, all job evaluations should be reviewed to resolve anomalies and ensure the factors were applied uniformly.

Many employers consider it to be normal compensation practice to group evaluated jobs into grades to make the pay structure easier to administer. The jobs within each grade are considered equal in value for pay purposes. Grades must not be determined in such a manner as to force female-dominated jobs into lower grades.

Once a job evaluation exercise has been completed, wages must be examined to see whether pay inequities exist.

Section 15 of the Equal Wages Guidelines, 1986 provides for two types of wage comparisons: direct and indirect. A direct comparison involves comparing a predominantly female job with an equivalent predominantly male job. Where the value of the work performed and the wages received by employees in a female occupational group cannot be compared directly with a male occupational group or groups, an indirect comparison can be made. This requires the use of pay lines.

One method of determining if any wage gaps exist within an establishment involves using pay lines.

The first step in using pay lines is to determine the existing wage rate for each position. The CHRA includes as wages any form of remuneration payable for work performed by an individual. It may not be necessary to calculate the monetary value of direct and indirect benefits if they are equally accessible to all employees.

For this purpose, use the wage rate that the employee can expect to achieve given fully satisfactory performance in the job.

The next step is to express the wage rate in relation to evaluation values; that is, to plot the pay lines. This involves plotting the total evaluation points and the respective wage rate for each job. One pay line should be plotted for the jobs in the male-predominant group and another for the jobs in the female-predominant group.

Two lines of “best fit”; one for the male-predominant groups and one for the female- predominant groups, can then be drawn. A line of “best fit” is a line drawn through the group of data points that best estimates the relationship between the variables-in this case, wages and job value.

In Figure 2, two lines have been drawn: one represents the line of “best fit” for the jobs in the male-predominant group and the other represents the line of best fit for the jobs in the female-predominant group.

Figure 2

The space between the lines in Figure 2 represents the differences in wages between male and female jobs in the establishment, which is referred to as a “wage gap.”

Where dozens or even hundreds of jobs have been evaluated, pay inequities may not be immediately obvious, and a method of isolating potential problems and determining the size of those problems should be used. Larger employers may prefer to use statistical techniques, such as multiple regression analysis, which results in making indirect comparisons of jobs.

Having determined the extent of the wage gap, if any, the next step is to determine the extent of the pay equity gap. The data should be further examined to determine whether any differentials can be explained in terms of one of the reasonable factors outlined in section 16 of the Guidelines. Examples of reasonable factors include: differences in performance ratings; seniority; red-circling; rehabilitation or temporary training assignments; internal labour shortages; and regional pay rates.

The pay equity gap is a subset of the wage gap that can be attributed to systemic gender discrimination in compensation practices. It is the portion of the wage gap that cannot be explained by other reasonable factors.

The next step is to determine whether past administration practices are influencing pay differentials between males and females. Some of the areas to be reviewed are: time required to reach the wage rate given a fully satisfactory performance; different performance rating criteria for different occupational groups; different entry levels or wages for males and females; and different salary range structures for jobs of equal value.

Consistent and equitable pay administration is fundamental to maintaining pay equity. Inequitable pay administration practices, if not remedied, will lead to future pay inequities. Policies and practices may need to be amended to ensure equal pay for work of equal value in the future.

You may benefit from being able to demonstrate that pay equity exists within your establishment and that a program is in place to correct and eliminate potential problems. Some of the benefits include:

• the ability to better respond to pay equity complaints;
• increased wage cost certainty if you voluntarily identify and correct inequities;
• the possibility to phase in the necessary wage adjustments, within a reasonable time frame, in cooperation with employees;
• the ability to determine wages in an equitable method that is not based on historical pay practices or bargaining patterns; and
• the participation of employees in the pay equity process will help to obtain acceptance and commitment from all parties. Working jointly to resolve pay equity issues using a collaborative project management approach will:
  • break down myths
  • promote transparency
  • prevent mistaken assumptions
  • promote understanding
  • reduce resistance
  • improve morale

This flexibility may not be available in the event of a gender-based wage discrimination complaint. The Canadian Human Rights Tribunal has ordered that pay adjustments be made retroactive to a point in time that in some cases predates the complaint by a year or more. This means that you may have to pay to correct past pay inequities.

Employers who have implemented a pay equity program within their establishment have noted other benefits of particular importance to them.

To ensure consistency, a questionnaire can be used to gather job facts. Questionnaires ask the same questions about different kinds of work in the same way. A well-designed questionnaire will produce complete, accurate and reliable data. It will control, to some extent, the tendency of some people to over-describe or under-describe the work they do.

In describing jobs, some aspects of work traditionally performed by women are often overlooked, such as responsibility for operating office equipment, caring for people who are sick and working with frequent interruptions or distractions. Examples of frequently overlooked tasks follow these tips.

In addition, the person writing a job description may have preconceived notions about the value of a job before it is even described and therefore may overlook important job content.

Many factors, such as technology or reorganization of the work, can make job descriptions obsolete. Therefore, they should be updated regularly. Questionnaires should be standardized and used for all jobs.

Avoid titles that are gender-related (e.g., use cleaner instead of cleaning lady) or misleading (e.g., use waste collector instead of sanitation engineer).

This will ensure more consistency and accuracy in the descriptions of duties and responsibilities.

Job descriptions should never refer to the incumbent’s gender (e.g., “he does…” or “she does…”) since this language tends to perpetuate stereotypes about work traditionally performed by women and work traditionally performed by men. Instead, write, “This job requires…”

• Scheduling appointments
• Writing correspondence and standard letters, taking minutes, proofreading and editing
• Operating and maintaining office machines
• Hand-eye coordination and fine motor skills such as rapid finger dexterity (e.g., typing, giving injections)
• Establishing and maintaining filing and scheduling systems and data retrieval
• Training and orienting new staff

• Balancing multiple demands
• Calming upset, ill or dissatisfied people and gathering information from them
• Eyestrain from reading handwritten material or from time spent at the computer
• Providing care and emotional support
• Frequent bending or lifting
• Prolonged concentration

• Responsibility for damage to equipment
• Acting on behalf of absent supervisors
• Representing the employer through communications with the public
• Developing and coordinating work schedules and planning meetings

• Communication stress
• Frequent distractions or interruptions
• Exposure to disease, dirt, dust, human waste
• Working in an open-office setting without privacy or with constant noise, crowding
• Sitting or standing in the same position all day with little opportunity for movement

A representative job evaluation committee should consist of people from different organizational levels and should be gender-balanced. The purpose of this committee is to work collaboratively to determine the value of jobs within the establishment and the size of any pay inequity that may exist.

A committee with well-chosen and well-trained members can improve the process and ensure a range of insights about jobs. It will also help to avoid any stereotyping of work performed mostly by women.

Committee members must have a very good knowledge of the principles of job evaluation and how to apply the chosen job evaluation plan. They should also be provided with accurate and detailed job information. This will ensure more consistent ratings of the jobs within the establishment.

It is not possible for each committee member to understand all aspects of all jobs being performed within the establishment, nor is it possible to describe every aspect of each job in the job description/questionnaire. If information is unclear or the job is particularly difficult to understand, it may be necessary to request that an expert, such as the person in the job or the supervisor, explain the job to the evaluation committee.

reposted from Labour Canada