Pay Equity Funding History

Published on 10:15 pm by in Employment

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History of pay equity funding
First, some background on pay equity funding is necessary. Funding received in 1994 by organizations adopting the proxy method was calculated at 3% of 1993 salaries. This was initially meant to represent the 1% pay equity adjustment for 1994 with an additional 2% allowance to help organizations catch up to their pay equity base. The intent was that organizations would continue to receive an additional 1% funding increase annually until 1999 to assist with the pay equity adjustments from 1995 to 1999. In 1996 the provincial government scrapped the proxy method. The government then stated that as long as organizations using the proxy method continued to pay out the full amount of the 3% 1994 funded increase they would be considered to have fulfilled all their pay equity obligations.

Enter 1997. The proxy method was reinstated and organizations in the broader public sector were informed they must act as though it had never been repealed. These organizations were required to make retroactive pay equity adjustments for 1995, 1996, 1997 and the current adjustment for 1998. Each adjustment was equal to 1% of the prior years’ payroll and should have been distributed according to the rules outlined in our pay equity legislation. If your payroll is approximately $500,000 and pay equity has not yet been achieved for all female job classes then your organization could have to come up with in excess of $30,000 in total to meet its retroactive pay equity obligations up to and including 1997.

In late 1997 the Minister of Finance for Ontario announced that $140 million will be available for pay equity funding for organizations in the broader public sector. The Minister apparently arrived at this amount by estimating the salaries of broader public sector organizations and the resultant pay equity funding deficiency from 1995 to 1997. The announced funding was supposed to be sufficient to cover the shortfall to date.

MCSS informs us that correspondence will be sent out shortly to all organizations in the broader public sector to advise them of the situation. A survey will be sent to these organizations sometime in 1998 to determine existing unfunded pay equity requirements. Funding was forthcoming for the period 1995 through 1998 in 2000 and continues today.

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