BUSINESS

Narrowing the gap

Employers struggle to establish pay equity

SHONA MCKAY January 8 1990
BUSINESS

Narrowing the gap

Employers struggle to establish pay equity

SHONA MCKAY January 8 1990

Narrowing the gap

BUSINESS

Employers struggle to establish pay equity

Most Canadians can only dream of receiving a 36-per-cent pay hike. But last March, that dream became a reality for Linda Earley, a 49-year-old head secretary at Markham High School, just outside Toronto. Earley was one of the first

beneficiaries of Ontario’s Pay Equity Act, the most dramatic law of its kind in the world. The Act, which came into effect on Jan. 1, 1988, requires employers to raise the salaries of women in selected jobs when they predominate in a job class but make less than men in comparable jobs of similar value. As a result of the pay equity plan developed by Markham’s school board, Earley’s job value was equal to that of a maintenance foreman—and her annual salary jumped more than $8,700 to $33,124. “I was thrilled,” she said. “I’m a single parent, and it has always been a struggle to make ends meet.” But, so far, few working women in Ontario have been as lucky as Earley. And in the final days leading up to last week’s Jan. 1 deadline for about 700 designated companies to announce their plans for redressing any gender pay inequities, it appeared that, while most employers would be posting pay equity plans on time, about one in five—including the provincial government itself—would fail to meet the deadline.

Ontario’s far-reaching legislation, which is being monitored by several other countries, was designed to help correct the gender-biased

pay practices that are a prime factor in women earning an average of 65 cents for every dollar earned by Ontario men. The act required the province and its agencies, as well as about 700 large private-sector companies—those with 500 or more employees—to design and imple-

ment plans to narrow that gap by the Jan. 1, 1990, deadline.

To achieve pay equity, the act requires the private-sector employers to allocate at least one per cent of their Ontario payroll each year to increases until the pay gaps between maleand female-dominated jobs are eliminated. For the public sector, pay equity must be achieved

in five years. Companies that miss the posting deadlines will be investigated and monitored by the Pay Equity Commission and may be ordered by the commission to draw up and post gender-neutral plans. In companies with unions, employers must negotiate a plan with a bargaining-unit committee for all unionized employees.

Many employers complain about the costs and frustrations that they have endured in developing the plans, but a survey released by the Pay Equity Commission last week indicated that most of them will meet the posting deadline. The results of the survey, conducted by Insight Canada Research between Nov. 1 and 10, showed that 81 per cent of those employers will be posting in January. About one in 10 say they will not be posting until between February and November, 1990, while another 11 per cent are still unsure of when they will be posting. Still, many employers complain that drawing up the plans has proven to be an expensive and timeconsuming bureaucratic nightmare. Some have said privately that the cost of compliance may even threaten their very viability. Bogged down by the complex process, others have already told the province’s Pay Equity Commission that they will miss the deadline. Among those far behind schedule are the 560 hospitals and other healthcare institutions that employ Ontario’s 107,771 nurses. Said Noelle Andrews, assistant director of govemment relations at the Ontario Nurses Association: “After almost three years of work, we are not even in the serious negotiation stage with any of the employers. The situation is

terrible.”

The experts say that, by and large, the employers, or the unions they are required to negotiate with, are not to blame for the delays. “People are trying very hard to make pay equity a reality,” said Gaye Trombley, a principal (vice-president) with Sibson & Co. Canada, a Toronto-based personnel consulting firm. “Companies are spending a lot of time, as well as fortunes, on the process.” Consultants estimate that most companies have spent $100,000 or more on consulting and legal fees, as well as assigning staff members full time to draw up their plans. Added Trombley: “It’s being said that pay equity has cost Ontario’s employers $20 million. I’d say that was a conservative estimate.” Still, few employers say that they disagree with the underlying principles of pay equity. Said William McDougall, manager of organization and development in Haldimand-Norfolk, a medium-sized regional municipality in southwestern Ontario that will not be posting a pay equity plan for its 700 employees until well into the new year: “No one can deny the justness of pay equity. It’s only right that women be paid the

same as men for work of equal value.”

Instead, experts say that the complex legislation itself and a subsequent flood of guidelines from the Pay Equity Commission is responsible for the slowdown. Said Drew Mackay, a pay equity specialist with the Toronto-based management consulting firm Towers, Perrin, Foster & Crosbie: “There’s no doubt the law is flawed—it’s too vague and too complex. It’s causing chaos.”

Still, the law has already provided some substantial increases for women. Late last month, The Ottawa Citizen agreed upon a plan that resulted in increases of up to $3.57 an hour for 67 of the 400 unionized employees in its newsroom, business offices and distribution department.

In one instance, two female editorial receptionists had their salaries raised by $2.31 per hour to $16.70, the same amount earned by the male head janitor.

But recent rulings by the Pay Equity Tribunal, the institution created by the act to settle pay equity disputes, have complicated the task of drawing up the plans. In one of the most contentious cases it has faced, the tribunal agreed with the Ontario Nurses Association last June that police officers and nurses in HaldimandNorfolk had the same employer—the local government. Lawyers for the regional municipality argued that the police were employed by a separate police board, not by the local government itself.

The ruling meant that the area’s nurses could be compared to local police officers for the purposes of achieving pay equity—which would result in nurses’ salaries being raised. But Paul Wearing, who acted as counsel for the regional municipality and who is currently appealing the case to the Ontario Court of Appeal, said that the decision “changed the rules of the game for everybody.” He added: “The wider definition of employer means that many plans that were finalized or near completion will have to be reopened. How can people proceed when the rules are changing day to day?”

The difficulties that large employers have faced have raised concerns among owners of medium-sized businesses—defined as having between 100 and 499 employees—who must post their pay equity plans no later than next Jan. 1. Judith Andrew, director of provincial affairs for the Canadian Federation of Independent Business, said that, unlike most larger firms, medium-sized companies usually do not

have in-house experts to deal with pay equity. Nor do they have the thousands of dollars needed to hire outside consultants. Said Andrew: “If the big companies are finding pay equity difficult, can you imagine what a burden it will be for smaller firms?”

And while businesses worry how they will cope, many working women will not receive any benefits at all under the existing legislation. The act covers about 1.2 million of the province’s 2.2 million female workers. But it does not address about one million women employed in mainly female workplaces, such as libraries and day care centres, where there are no male-dominated jobs that can be used for comparison purposes.

Still, many unions say that they are pleased with the act. Said Ontario Public Sector Employees Union pay equity advisor Isla Peters: “We are still in the final stages of negotiations, but we expect high adjustments for many of our 30,000 women members. Pay equity is doing what it was intended to—put money in women’s pockets.” Meanwhile, business and labor leaders in other provinces and around the world are closely monitoring the impact of the Ontario legislation. So far, Ontario is the only proveí ince that has made pay g equity mandatory for pri| vate employers as well as £ its own departments and 5 agencies. Within Canada, I Manitoba, Nova Scotia ~ and Prince Edward Island have passed pay equity legislation that covers the public sector, but both the federal government and Quebec are making do with much narrower employment equity schemes, which only respond to complaints from individual employees.

In the United States, Claudia Wayne, executive director of the Washington-based National Committee on Pay Equity, an organzation that has been lobbying for fairer pay systems for the past 10 years, said that 20 states have begun to make pay equity adjustments, but only in the public sector. Added Wayne: “There’s nothing to compare with the experience in Ontario. There is only one word to describe what is happening there, and that is ‘wonderful.’ ” Those women who will soon receive increases as a result of the act undoubtedly share in that enthusiasm. But, for many working women in Ontario who are not covered by the legislation, the concept of equal pay for work of equal value will remain a dream unfulfilled.

SHONA MCKAY