Private sector pay equity task force recommendations

On February 28, 2002, the BC Task Force on Pay Equity issued its report. Titled Working Through the Wage Gap, the report reviews the current status of the employment gender gap in the private sector, and draws a number of conclusions. Its recommendations are likely to form the basis for a legislative initiative by the BC government.

The author, Nitya Iyer, examines the two different approaches to resolving pay equity issues in Canada. It describes them and their shortcomings in the report’s executive summary:

There are two existing models for private sector pay equity legislation in Canada. The complaints-based model is exemplified by s. 11 of the Canadian Human Rights Act, which enforces equal pay for work of equal value in the same way that other human rights are enforced. A complaint that an employer is paying different wages to male and female employees performing work of equal value in an establishment must be made to the Human Rights Commission. The complaint is investigated and, where it appears well-founded, referred to a tribunal for hearing. This approach to pay equity has been widely criticized as expensive, cumbersome, and inefficient. Many agree that a complaints-based model, which is primarily aimed at enforcing individual rights, is ineffective to address sex-based wage disparities because these disparities reflect a systemic rather than an individual problem.

The Ontario Pay Equity Act, and the Quebec Loi Équité Salariale both adopt a proactive model, whereby public and private sector employers must take positive, legislatively specified steps to achieve and maintain pay equity within their workplaces by using job evaluation processes. Employee or union involvement in the process is required.

The Ontario statute came into effect in 1988, and substantial resources were allocated to support it, including funds to educate employers and workers about the law, to assist employers to implement pay equity, and to expeditiously settle disputes. Nonetheless, the Act has had less impact on wages than expected, and some suggest that it has had virtually no effect in reducing the gender pay gap in Ontario. Compliance levels are known to be low, particularly among smaller employers. Various aspects of the legislation have been criticized. However, the law has also stimulated increased awareness of sex-based wage disparities and wage discrimination among employers and workers in Ontario.

The Quebec statute is a refinement of the Ontario legislation. It was enacted in 1996. While it improves upon the Ontario law in some respects, it is no better in others, and it suffers from a lack of adequate financial and administrative resources to support its implementation. Although it is early to assess the impact of the Quebec law, as the date for completing all pay equity adjustments expired only in November 2001, compliance rates appear low and pay adjustments seem to be relatively slight.

Canadian experiences with pay equity legislation demonstrate that a proactive model is superior to a complaints-based model. However, accepting that pay equity aims to address only part of the gender wage gap, the impact to date of the proactive pay equity laws enacted in Ontario and Quebec has been disappointing, and does not provide strong support for adopting this model in British Columbia. This kind of pay equity legislation is ill-suited to the circumstances of smaller employers, and may not address the most significant barriers to women’s equality of economic opportunity in some industries and occupations.

The report concludes that neither approach should be adopted in BC, and recommends a different tack:

A new approach to addressing sex-based wage disparities is necessary, one which focuses on stimulating
systemic change. This can best be done by taking steps to increase awareness of the problem in specific
contexts and by working in partnership with the private sector to craft concrete initiatives that respond to the contours of sex-based wage disparities in particular industries.

The report makes a number of recommendations:

Equal Pay for Equal Work

• Repeal s. 12 of the Human Rights Code and enact an equal pay for equal work provision in the
  Employment Standards Act.
• Allocate staff and funds to build awareness of this right generally, ensuring such measures are aimed
  at vulnerable communities, including publicity, telephone access, pamphlets and online information.
• Implement systems to ensure prompt responses to inquiries, mediation and settlement of complaints,
  and other mechanisms for expedited dispute resolutions.
• Clarify the scope of the right with appropriate definitions; shift the onus to employers to justify any
  gender-based wage difference for similar or substantially similar work.
  (Timeframe: to fit with other changes to Employment Standards Act and Human Rights Code; within 1
  year.)

Achieving Equal Economic Opportunity by Industry

• General: Overall responsibility for coordinating this initiative will lie with a ministry with the necessary
  resources and expertise. Industries not included in the initial set of studies will be studied
  subsequently, so that all British Columbia industries adopt appropriate equity-enhancing initiatives
  (completing Steps 1 and 2) over a 4-5 year period, with subsequent review and possible legislative
  action.
• Step 1: Undertake preliminary research to identify and prioritize 4-5 industries for industry case
  studies, and to group industries for subsequent studies. (Timeframe: 6 months . 1 year.)
• Step 2: Independent researchers conduct industry studies with the participation of industry employers,
  employer associations, workers and trade unions to publish a report on the current state of the industry
  with respect to the equality of economic opportunity of men and women within the industry, including a
  set of recommended initiatives to improve it. Reports should recommend how to achieve gender-
  neutral compensation practices, equitable access to employment opportunities, and a positive
  environment for women in the industry. (Timeframe: 6 months . 1 year.)
• Step 3: Implement a voluntary compliance period during which industry employers should agree to
  adopt a set of gender equity-enhancing initiatives based on the industry study; government should
  provide industry-appropriate positive incentives to facilitate compliance. (Timeframe: 3 . 4 years.)
• Step 4: The ministry responsible for the initiative will conduct a review of the industry to assess what
  progress has been made. Where appropriate, the ministry may recommend legislative action to ensure
  that equality of economic opportunity is improved within the industry. (Timeframe: 6 months . 1 year.)