Unifor is Canada’s largest private sector union with over 310,000 members across Canada. Approximately 160,000 of our members live and work in Ontario. Over a third of our members are women, with the majority of these women working in Ontario. They work in every major sector of the economy and in a whole range of occupations including nurses, pilots, retail and service workers, manufacturers and education workers. We are able to make comparisons and observations about working conditions, opportunities and wages rates given our breadth of membership.
We welcome the opportunity to provide input into the Employer's Reporting Requirements under the Pay Transparency Act, 2018. Pay transparency is key closing the gender wage gap. Closing the gender wage gap must be treated as a human rights priority.
Countless studies have shown that women’s work is undervalued (and therefore underpaid) for the work that they do. Remedying this requires a robust pay equity regime with supports for compliance and active enforcement. A key tool to identifying this area of discrimination is pay transparency.
We share the concerns also expressed by others that the Ministry's proposed regulation and consultation backgrounder and questions significantly undermine the purpose of the Pay Transparency Act. The new principles or conditions in connection with the Act’s regulations may actually weaken the regulations. Consistency with the purpose of the Act should be a priority when developing regulations. It is problematic that the “guiding principles” listed in the consultation paper are not anchored in the Act and that conflict with the stated purpose of the Act, including: promoting gender equality including equality of compensation between women and men, through increased transparency of pay and workforce composition; and increase disclosure of inequities related to employment and compensation.
Pay transparency must ensure access to meaningful data to promote gender equality in the workplace. The guiding principles from the consultation paper are in conflict with the stated purpose of the Act.
Ministry Consultation’s Questions
Wage Gap Calculations – Questions 1 and 2
The proposed suggestions on wage reporting a far too narrow. Limiting the reporting to only the hourly wage and gender is inconsistent with the Act. It also has the potential of undermining the Pay Equity Act definition and jurisprudence, which uses a broad definition of compensation.
Despite the purpose of the Act, this approach does not effectively reveal the true inequality because it does not reveal women’s access to fewer hours of work, concentration in precarious work, and concentration in female-dominated work.
The proposal also overlooks how race and other forms of discrimination intersect to deepen the gender pay gap. The overall wage structure must be clear in publicly reported information is pay transparency legislation is going to be effective.
The Regulation must include the following key data:
- Report the overall wage structure by the average hourly wage, median hourly wage, as well as average annual earnings and median annual earnings at the workplace.
- Intersectional data based upon gender, race, disability and Indigeneity, which is information that must be reported in the federal sector.
- Report total compensation in addition to hourly wages. As defined in the Pay Transparency Act, compensation includes any form of remuneration payable for work: salaries, commissions, vacation pay, dismissal wages and bonuses; reasonable value for board, rent, housing and lodging; payments in kind; employer contributions to pension funds or plans, long-term disability plans and all forms of health insurance plans.
- Bonuses, commissions and tips (where tips are a fixed percentage of salary) are part of total compensation but should be reported separately from wages because there are gendered gaps in access to these forms of payment.
- Report by compensation structure: Are wage grids different for male jobs and female jobs? (i.e How many steps are on the grid? How long does it take to move up the grid, etc.).
- Report by job classifications.
- Report job status to show whether employees are full-time, part-time, casual, seasonal or are hired through temporary help agencies.
Question 3: The Reporting Period
The Pay Transparency Act requires different reporting dates for different employers, i.e., May 15, 2020 for employers with 250 or more employees and May 15, 2021 for employers with more than 100 employees. This undermines the ability to gather consistent information that can be compared over time. Without a common reporting date, the data will not be meaningful for employees, researchers and government’s own assessment of the law’s impact.
Data that is collected in pay transparency reports should refer to data for a calendar year (1 January to 31 December). This is consistent with the information that employers already prepare for annual income tax slips which facilitates reporting.
Questions 4 to 6: Cost to employers to prepare the reports
Employers already have the data they need to prepare pay transparency reports. The data at issue is basic payroll data. Employers can prepare the reports easily and quickly using existing payroll systems. In fact, the data on annual earnings is already prepared by employers for reporting to Canada Revenue Agency.
Breaking down the costs into specific categories in Question 5 should reveal the small, if any, cost of complying with this legislation. Asking for an estimated cost, however, may not reveal a true picture. We need only look to the UK experience where the actual costs were considerably less than the estimated costs.
The Ministry's consultation document outlines that large employers will have most or all of the data available to calculate wage gaps and other reporting requirements, but smaller and medium-sized employers will not. We note that the Ministry appears to rely upon a definition of small and medium enterprises ("SME") that is different than the Statistics Canada definition of SMEs. Statistics Canada defines small enterprises as employers with less than 100 employees. Statistics Canada defines medium enterprises as employers with 100 to 499 employees.
At this time, the Pay Transparency Act does not apply to employers with less than 100 employees. To be effective, the Act should mirror the Pay Equity Act and apply to all employers with 10 or more employees.
The gender pay gap in Ontario can be seen through a number of lenses: Horizontal gender segregation results in women being clustered in certain occupations. The female dominated sectors such as health care, social assistance, education, food services are often the lowest paid. There is also vertical segregation with women clustering at the bottom in lower-paying positions in male-dominated or gender-neutral sectors. Although women’s participation in the workforce has increased over the past few decades, women are still over-represented in part-time work.
Intersectional discrimination plays a role in the gender wage gap with women of colour, Indigenous women, lone-parent families, women with a disability to name a few. Progress towards closing the gap has slowed. Urgent pro-active action is needed. Pay transparency can be part of the solution if it is designed properly.
Every employer who is party to a collective agreement, already participates in a form of pay transparency. Wage rates are contained in collective agreements and are publicly available. There should be no objection to this practice covering all employers.
The law prohibits discrimination based on sex. Enforcement of this basic principle can be very difficult for the average worker. Pay transparency is a tool for employers, workers’ organizations and governments to ensure that there is compliance with the law. It also provides the opportunity to reveal data that identifies factors that increase the gender pay gap. In order to achieve this, regulations must provide for meaningful data and a clear picture of an employer’s compensation practices.
In addition to our submission, we endorse the Equal Pay Coalition’s detailed and thorough suggestions to make the pay transparency legislation effective.
Thank you for your attention to these submissions.
Submission on behalf or Unifor