Bill 148 Versus Pay Equity Act

Given the plethora of legislation that governs Ontario workplaces, it seems inevitable that elements of Bills and Acts will not align nicely. This seems to be the case with a portion of the proposed Fair Workplace Act (Bill 148) and Ontario’s Pay Equity (PE) Act.

Pay Equity Act: It’s about job evaluation

Within the context of PE compliance, most organizations use point-factor job evaluation systems that recognize two dimensions of work experience. The first dimension is commonly referred to as “prior” work experience. The second dimension recognizes the “learning curve” requirement deemed necessary for satisfactory job performance. The sum of required timing for these two dimensions influences the job rate (i.e. maximum rate of pay). Job rates are used for PE maintenance efforts.

The latter dimension recognizes that job holders need some time to acclimatize themselves with the new employer – to adjust for differences in workflow systems/process compared to a previous employer. Typically, the rule of thumb is that higher level jobs require a longer adjustment period. So for example, entry level jobs tend to be fairly prescriptive and supported by many resources for guiding the day to day efforts of the new job incumbent. Therefore, the “learning curve” is short. In contrast, senior roles are typically focused on longer term objectives which require a longer time horizon to build familiarity with internal processes/systems. In essence, they need more on the job time to build their level of organization awareness which enables them to make expected job contributions.

Bill 148: It’s about compensation management

The difference between these two time-based job requirements is also recognized within compensation management systems. For example, this explains why new hires (holding market forces constant) are not hired at 100% of the job rate. The assumption is that while they may have requisite technical expertise, they lack the organization awareness component which is also a requirement for satisfactory job performance.  

This distinction seems to disappear in the “equal pay for equal work” logic of Bill 148 which suggests temporary replacement workers must be paid at the same rate as their permanent counterparts.  Replacement workers do not possess the same level of organizational awareness as full time employees. This explains why contract and temporary workers more frequently need higher levels of onboarding/mentoring/job shadowing efforts to compensate for their lack of organization awareness.

So while this section of Bill 148 seems to be giving voice to the “equality” compensation theme, for years now the PE Act has been  giving voice to the “it’s fair not to treat everyone equally” theme. The Bill seems to be telling employers to disregard the two dimensions of job experience when establishing compensation rates while the Act instructs employers to consider both prior and on the job dimensions of experiences when establishing job value.

What’s an employer to do?

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By Dave Nanderam, Managing Partner, ASSOCIUM Consultants. Through our collaborative approaches, innovative HR products and customized advisory solutions we impact four leadership priorities: managing risk, driving productivity, strengthening talent capabilities and supporting your bottom line. Let’s connect to find out how ASSOCIUM Consultants can help your organization.

Co-author: Marla Allan, Vice President, Human Resources, Grand & Toy