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In order to be competitive in your industry, your company must ensure that its remuneration reflects pay equity. While this is the law, it can also be an asset.
This process can generate several benefits for your organization. While compliance with the Pay Equity Act is a legal requirement, it also gives you the opportunity to add significant value to your global compensation practices. Several parameters set out in the Act can be used to build or enhance your salary structure and adapt it to your business’s needs.
It should be mentioned that the objective of this Act, which was adopted in 1996, is to eliminate wage gaps between predominantly female and predominantly male job classes of equal value in the same organization. For example, while the tasks of a welder and administrative assistant are different, their roles may be of equal value.
When should pay equity be implemented?
Regardless of their industry, all businesses under provincial or federal jurisdiction with 10 or more employees are subject to the Act and must conduct a pay equity audit every five years. The date on which companies must comply with the Act varies and it depends on their respective anniversary date. While pay audits are conducted every five years, pay equity must be respected on an ongoing basis.
Employers cannot avoid this obligation. If an organization fails to take action, whether intentionally or not, they may face one or more of the following consequences:
- Be found guilty of an offence by the CNESST and liable to a heavy fine;
- Be subject to a compliance investigation by the CNESST;
- Receive an official complaint from an employee and be required to pay retroactive salary adjustments;
- Have their company name publicly posted on the CNESST “list of non-compliant employers” section.
How can companies achieve pay equity?
As an employer, how can you correctly assess each job category? You must take into account a range of parameters which requires assessing both internal and external factors.
You must estimate the relative value of your jobs and use a scoring system based on the following four objective factors:
- Qualifications required (education, experience, bilingualism, coordination and manual dexterity, etc.);
- Job responsibilities (autonomy, communication, supervision, accountability, etc.);
- Effort required (mental and physical effort);
- Working conditions (physical and psychological environment).
A questionnaire based on these criteria and adapted to your company’s specific needs can be created to determine the value of each role. Similar positions in the same class are grouped together and a salary scale is proposed.
Naturally, your external market must also be analyzed to ensure that your salaries and conditions are competitive. There are several public sources available, but targeted studies can also be carried out by compensation professionals.
How can pay equity benefit your company?
By assigning each role a salary equivalent to its fair value, you will ensure that your global salary structure is fair while also complying with the Pay Equity Act.
This process has many benefits:
- Complying with legal obligations, maintaining your company’s reputation and avoiding any potential headaches;
- Motivating your workers through equitable compensation, which can lead to increased productivity across your organization;
- Creating a feeling of justice and equity among employees in similar roles, thereby creating a healthy working environment;
- Attracting and retaining talent (companies that respect equity principles are often viewed as employers of choice);
- Boosting your company’s image as a socially responsible employer.
The Pay Equity Act gives you the opportunity to adjust your company’s salary scales and ensure they are equitable and reflect your industry. Don’t hesitate to contact our team of experts who can guide you throughout the process.