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We have recently commented at length on guidelines for calculation and distribution of pay equity grants. Childcare centres must continue to distribute their direct operating grant and wage enhancement grant subsidies (collectively referred to as wage subsidies) in addition to pay equity grants. Rules for calculation and distribution of wage subsidies were set by the Ministry of Community and Social Services on implementation of the funding program in 1987. These rules are available in a Guidelines and Procedures document and, in theory, have been sent to every centre. They differ from pay equity rules and regulations.

Effective July 1, 1999 responsibility for funding and distribution of salary grants has been downloaded to local area service providers. This, in most cases, is the municipality involved (e.g. City of Toronto, Region of York). We have been informed by representatives of the City of Toronto that, for the present, there will be no changes in rules governing distribution of wage subsidies to childcare staff.

For your information, we are quoting verbatim Sections III through V of the Ministry of Community and Social Services Guidelines and Procedures for Childcare Wage Subsidy. These sections specify (or leave vague as the case may be) rules for distribution of wage subsidies. We recommend that you compare your centre’s method of distribution with these rules and regulations and ensure that your centre is in compliance with the current municipal wage subsidy guidelines.

Sections III through V of the Ministry of Community and Social Services Guidelines and Procedures for Childcare Wage Subsidy

III. PERSONS ELIGIBLE
Wage subsidy is intended to improve the salary and benefit levels of employees working in a child care program and amounts paid to home child care providers. With respect to persons working in an eligible child care program, the people who should benefit are those who fill permanent positions (full or part-time).

The following list notes some of the types of permanent positions that are typically found in a child care program:

  • Trained and untrained teachers
  • Supervisors/Administrators
  • Home Visitors
  • Resource Teachers
  • Clerical Staff
  • Cooks
  • Housekeeping and Janitorial Staff
  • Bus Drivers

A permanent position (full or part-time) is one which is part of a program’s regular staffing component or under contract as a home child care provider. For example, a child care program offers a music program for six months of every year and employs an individual to conduct the six month program every year. This position is a permanent position. If however, a program offers a music program on a one time basis only, the position would not be considered permanent. That individual would be working on a short term project for the child care program. The full-time equivalent is required for full and part-time positions. (e.g. 17.5 hours/week = .5 FTE when 35 hours/weeks is the regular work week). The FTE is based on the agency’s standard work week. Because this payment is intended for employees in permanent positions (full or part-time) or persons under contract as home child care providers, the following staff should not be included:

  • Persons working on a short term project. For example, an individual under contract with an agency to develop a parent contract.
  • Students and staff whose salaries are covered by employment programs such as “Futures”, “Social Services Employment Program” (SSEP) etc.
  • Persons paid on a fee-for service or contract basis. For example, someone who provides accounting services, janitorial services.

IV. FUNDING CONDITIONS
The Service Provider will use Wage Subsidy funds to increase the salary and benefits of staff employed in licensed child care services, funded child care resource services, and funded support for children with special needs.

The Service Provider will only use Wage Subsidy funds to increase salary and benefits of staff filling eligible positions unless non-salary related use is specifically approved by the Ministry. Where a collective agreement precludes increasing payments to staff, or other such exceptional circumstance exists, non-salary use of wage subsidy funds may be approved by the Ministry.

The Service Provider will ensure that each employee receives a reasonable portion of Wage Subsidy, and that such distributions are consistent with achievement of the service provider’s pay equity plan.

Distribution of Wage Subsidy to employees will not exceed $9,030 per FTE position in a non-profit organization and will not exceed $3,230 per FTE position in commercially operated child care program (unless resulting from transfer/sale of a child care centre previously operated by a non-profit organization).

The Service Provider will ensure that all payments to employees, including Wage Subsidy, are reflected in the job rates used by the Service Provider in pay equity calculations.

The Service Provider is entitled to use a portion of Wage Subsidy funding to cover mandatory employer contributions resulting from increased salary and benefit costs which are related to implementation of Wage Subsidy funded salary and benefit increases.

Service Providers that down-size a child care program may not redistribute Wage Subsidy funding to remaining positions. Wage Subsidy funds distributed to previously employed positions are to be declared surplus on the Child Care Wage Subsidy Utilization Statement provided to the Ministry at the end of funding year.

The Service Provider will immediately report to the Ministry any significant child care program down sizing which is expected to be ongoing, and acknowledges that such program and/or staffing changes will result in recalculation of the amount of Wage Subsidy the Service Provider is eligible to receive.

Previously approved Direct Operating Grant funding for non-salary use may continue to be used for such purposes, subject to Ministry approval each year, but must be at the 1993/94 level or lower.

Service Providers that operate a licensed home child care program shall distribute a portion of Wage Subsidy to enhance payments to home child care providers, as well as to employees of the home child care agency such as home visitors. Unless the program has down sized, the amount distributed to home child care shall be consistent with the total combined amounts of the former Direct Operating Grant and Provider Enhancement Grant previously distributed to home child care providers.

The Service Provider shall determine and administer distribution of Wage Subsidy funds in accordance with the funding conditions herein and Ministry policies, procedures, and guidelines governing Wage Subsidy and Pay Equity in effect at the time of such distribution.

The Service Provider is required to communicate to staff and home child care providers how subsidy funding is distributed, as well as any changes that may occur in distribution.

Wage subsidy funds not utilized in accordance with the conditions outlined above and current Ministry policies, procedures, and guidelines governing Wage Subsidy and Pay Equity shall be returned to the Ministry.

Failure to comply with any of the funding conditions herein may result in a claim for recovery of Wage Subsidy funding provided by the Ministry and ineligibility to receive future funding under the Wage Subsidy program.

The Service Provider will submit a Child Care Wage Subsidy Utilization Statement to the Ministry within thirty days of the end of the funding year.

V. GUIDELINES FOR WAGE SUBSIDY DISTRIBUTION

    1. The purpose of Wage Subsidy funding is to enhance the salaries and benefits of eligible staff.
    2. The Ministry strongly encourages that Service Providers include Wage Subsidy funding in their ongoing salary and wage payments to staff rather than distributing the funding as periodic payments during the year.
    3. Salary related wage subsidy refers to the combined amount of the former Direct Operating Grant, Wage Enhancement Grant, and provider Enhancement Grant. Only expansion that is part of the MCSS area child care management plan will receive additional Wage Subsidy funding. Where expansion is not part of the management plan, the service provider is responsible for funding for 100% of the additional salaries, benefits and home child care provider payments.
    4.The Direct Operating Grant portion of the Wage Subsidy may be approved in year [SIC] by the area office for non salary use, i.e. affordability or staff training. Existing approvals may not exceed the 1993/94 level. This amount will be identified separately in the approval.

Service Providers may use a portion of the Wage Subsidy grant to fund the increase in the employers’ share of benefits to the enhanced salaries.

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