‘HR should really begin thinking about what kind of data they’re going to need to collect’
Effective Aug. 31, Canadian federally regulated employers (with 10 or more employees) will be required, by law, to implement pay equity in their workplaces.
Canadian HR Reporter asked Shardé Skahan, associate labour and employment at Seyfarth Shaw in Los Angeles, about some of the steps businesses should be taking to achieve equity among their own workforce.
Q: What are the first steps an employer will have to take?
A: “The first thing is make sure they know which of the rules are applicable to them. There are different rules that apply, depending on whether the organization’s workforce is made up of unionized employees or non-unionized employees: How is the workforce comprised, and from there, they can decide whether they have to create a pay equity committee before they start implementing and creating that pay equity plan.”
Q: Which workers should comprise the committee?
A: “It’s going to be a mix. The regulations don’t set forth a requirement for every single spot on that committee, nor do they set forth a maximum size. But for many employers, a minimum of one employee representative has to be elected. It doesn’t mean that they can’t have management representatives as well but they will need to have an employee representative participate and employees can self-nominate if they’re interested in being on the committee.
“It doesn’t have to be strictly HR people but it would be helpful to have at least one human resources representative just because they are likely going to be involved in gathering the information needed or helping to implement the pay equity plan. I would recommend at least one human resources representative; they might want one representative from payroll as well, just to help with the financial aspects.”
Q: What will be the committee’s mandate?
A: “The committee will be responsible for helping to create and to implement the pay equity plan. They might have to review statistics and numbers to determine what needs to happen for that plan because before you can create the plan, you have to know where you stand.”
Q: What will go into the pay equity plan?
A: “The committee or the employees are going to be considering what their workforce looks like, what types of job titles there are, what types of jobs, positions and job duties there are, and then they’re going to also be analyzing the pay. They’re going to consider that entire picture to figure out if there are areas where employees are not paid equally.
“From there, they can identify what types of remedies are needed because once they identify remedies needed, the company will want to work to implement those remedies. When that is done, they’ll need to periodically review to ensure that they’re making progress and correcting any areas that they were deficient.”
Q: How comprehensive will these plans be?
A: “It’s really going to depend on the company and each specific situation, because it’s going to be very different for everyone but I do expect these plans are going to be fairly comprehensive, especially because this is such a complicated area of law.”
Q: What are the main challenges for employers?
A: “One of the main challenges is going to be getting people involved in the pay equity committee, and making sure everyone understands what’s involved because it’s going to be an ongoing responsibility; it’s not going to be something that you participate in once and then your job is done.
“It will be a challenge to make sure employees understand the commitment that is involved and the complications behind it just because they are complicated when you look at analyzing the data involved.”
Q: How long will these plans be in force?
A: “I don’t know that it’s necessarily going to be forever but for the foreseeable future... Since pay equity is something that can’t typically be achieved immediately — especially for a large company — it often does take time. It won’t be something that is done in a year or two, and then they don’t need their pay equity plan anymore. It’s going to be a long-term strategy that needs to be implemented and then maintained.
“Once a company does achieve pay equity, they’re still going to need to monitor everything to make sure that they’re maintaining it.”
Q: What are the biggest pitfalls that employers should be aware of?
A: “Make sure that they’re communicating with the employees [because] these can be really complicated and they can be technical so making sure that their communications to employees are explaining what they’re doing. Under the law, they’re required to provide notice to employees but just make sure that the way that they’re communicating is clear so it doesn’t cause more confusion because in a lot of situations, this is going to be information that the employees have not ever seen or reviewed. It’s adding another level of transparency, which can be complicating.”
Q: How onerous will this become for employers?
A: “This is going to be a significant amount of work at first; later on, once everything is in place, it shouldn’t be quite as much work and quite as much of a time commitment. It will [take] a significant amount of time to set up a committee and decide who’s going to be comprised of it, whether there’s going to need an election to take place to make up some members of the committee, and then also to develop that and start implementing the plan because there’s also a lot of data and so at first there will be a pretty significant commitment involved.”
Q: What should HR be thinking about to get everybody on board?
A: “HR should really begin thinking about what kind of data they’re going to need to collect and then they should be working with the legal department, finance, any other departments at the particular company that are going to be involved in this process to make sure that they’re crafting the proper communications, and they’re doing it timely so employees are receiving the notifications that they are entitled to receive.”
“There is a best practices document that was released [by Employment and Social Development Canada] that might be a helpful document for employers to review as they’re starting to work on the pay equity committee elections.
“To the extent any of these Canadian companies are also international companies, there are pay equity laws throughout the globe so they will want to make sure that they’re keeping apprised of not only their requirements in Canada but also any other requirements they have for countries where they also operate.”