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HCM Topic: Compensation and Benefits

Ottawa tightens rules around foreign worker program as unemployment rate rises

Written by George Yang on . No Comments on Ottawa tightens rules around foreign worker program as unemployment rate rises

Ottawa is tightening the eligibility rules around its Temporary Foreign Worker Program (TFWP) as the labour market continues to evolve and adjust to post-pandemic conditions.

Randy Boissonnault, federal Minister of Employment, Workforce Development and Official Languages, said the program was designed to address labour market shortages when qualified Canadians were not available to fill those roles — but is now being exploited at times.

“Right now, we know that there are more Canadians qualified to fill open positions,” he said on Aug. 26. “The changes we are making… will prioritize Canadian workers and ensures Canadians can trust the program is meeting the needs of our economy.”The changes, set to take effect by Sept. 26, 2024, particularly impact the low-wage stream and come at a time when the national unemployment rate has been rising — hitting 6.4 per cent in June.

The goal is to ensure that employers “invest in the full range of workers available in this country,” including young people and those historically underrepresented in the workforce.

Under the new rules, Ottawa will no longer process Labour Market Impact Assessments (LMIAs) in the low-wage stream in areas with an unemployment rate at six per cent or higher. Also, employers can hire no more than 10 per cent of their workforce through the TFWP in the low-wage stream, down from the previous 20 per cent cap.

Employers in key industries such as food security, construction, and healthcare will be exempt from these tighter caps and can continue hiring through the TFWP to meet pressing demands, Ottawa said. However, even these sectors will need to comply with other new measures, such as a one-year limit on the employment duration of low-wage temporary foreign workers, reduced from two years.

Hiring a foreign worker

Lijing Cao, a Toronto-based immigration lawyer at Bellissimo Law Group PC, said hiring foreign workers can take a lot of time and resources for employers — including filing an extensive LMIA and ensuring compliance with the TFWP on an ongoing basis.

“For example, the employer will need to provide the foreign worker with employment in the same job as stated in the employment offer, and they must pay the foreign worker wages that are mainly the same — but not less favourable — than those in the employment offer,” she said.

Employers are also required to keep all relevant records — including documents related to the LMIA, payslips, and time sheets — for six years, said Cao.

Random audits

Employment and Social Development Canada (ESDC) also has the authority to randomly audit employers for immigration compliance, she said. It’s critical that employers have the resources and keep proper records to respond in the event that happens.

There are also costs to keep in mind, including the government processing fee for the LMIA and legal fees if they don’t know how to navigate all the paperwork, said Cao.

“The immigration process can be complicated and take a long time,” she said. “It could take several months for a foreign worker to get permission to work in Canada after applying. If a company wants to hire a foreign worker, they should begin the process as soon as possible to understand the requirements and the timeline.”

Also, for foreign workers with closed permits, employers usually can’t change their job, location, or salary without getting a new permit, said Cao. “It’s important to get legal advice before making any changes to their employment.”

If an employer, for example, has two work locations — and knows the worker might shift between those worksites — that information should be included in the LMIA application to ensure it’s covered, she said.

LMIA approval

The LMIA process involves multiple steps, including confirming the occupation, setting appropriate wages, and providing proof of recruitment efforts. Employers may also be required to participate in phone interviews with ESDC officers during the application process, said Cao.

There are also additional costs outside of government and legal fees, including travel costs, she said.

“For the low-wage LMIA, the employer must pay for the round-trip transportation cost for the foreign worker to arrive at their work location in Canada at the beginning of their employment and to return to their country of residence at the end of their employment,” said Cao.

Those transportation costs cannot be recovered from the foreign worker, she added. High-wage LMIAs don’t have that same requirement for employers to absorb the travel costs, she said.

Terminating a temporary foreign worker

If things don’t work out with a temporary foreign worker, they can be laid off or terminated just like any other Canadian worker — meaning the same applicable provincial or federal laws must be followed, she said.

“But there are two things I want to mention. Under the Temporary Foreign Worker Program, the employer should report to ESDC any change in the employment status of the foreign worker based on the work permit,” she said.

The second thing applies to employers who may have nominated a foreign worker via a provincial nominee program (PNP). In that case, they are required to report to provincial authorities any change in employment status — whether that’s a termination or a resignation, said Cao.

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Beyond the pay stub: Tips for managing the administration of employee ‘fringe’ benefits

Written by George Yang on . No Comments on Beyond the pay stub: Tips for managing the administration of employee ‘fringe’ benefits

In many organizations, maintaining a competitive advantage starts with retaining high-performing, dedicated employees. Beyond offering an attractive salary and comprehensive health benefits, organizations are incentivizing employment opportunities by adding ‘fringe’ benefits to their compensation packages.

On an annual basis, the Canadian Society of Association Executives (CSAE) releases its Benefits and Compensation Report to monitor trends across different sectors, including:

  • industry/trade associations
  • professional associations
  • charities
  • regulatory authorities

While their 2024 report offers a variety of insights for organizations to consider as it relates to offering fringe benefits such as automobiles, cell phones, and membership dues, CSAE does not go into detail on the administrative impacts of these benefits. Keeping that in mind, here are some emerging, or re-emerging, fringe benefits with considerations for how they can impact finance and administration professionals.

Type of Benefit – Automobiles

Automobile benefits, such as vehicle allowances or access to a company vehicle, are most commonly offered to CEOs and other high-level executives.

Considerations for Administration

The following guidelines from the Canada Revenue Agency (CRA) will be important to review when offering access to a company vehicle:

  • Automobile vs motor vehicle: Determine if the vehicle is defined as an ‘automobile’ or ‘motor vehicle’ (yes, there is a difference). You can do this using CRA’s ‘vehicle validator’ and following the prescribed steps.
  • Business use vs personal use: Confirm whether the vehicle is for business use only or business and personal use. This difference determines whether it is considered a taxable benefit for the employee. If there is no personal use, it is typically not considered a taxable benefit.

Other vehicle-related benefits include:

  • Mileage rates: Re-visit rates to ensure consistency and transparency across your organization. Rates can vary widely (anywhere from 25 cents to 70 cents per kilometre, according to CSAE), but CRA offers annual mileage rates, noting that these rates have increased by 11 cents per kilometre between 2021 and 2024.
  • Parking: This is the most common benefit offered across all employment levels and employees will often inquire as to whether it is a taxable benefit. Parking provided or reimbursed to employees is typically taxable, including parking received at a reduced cost compared to fair market value.

Type of Benefit – Cell Phones

Cell phones are often provided for business and personal use.

Considerations for Administration

  • Understand your organizational policy: Different organizations may adopt different policies as it relates to cell phones. This may include:

– Company-owned, business only
– Company-owned, personally enabled
– Bring your own device

  • Each policy requires a different level of oversight and reimbursement so this should be made clear to employees to ensure there aren’t any misunderstandings. If the employee is allowed to decide whether to use a personal or company cell phone, you should be prepared to outline the pros and cons to allow them to make the best decision for themselves.
  • Track the replacement period: Track the phone plan replacement periods (e.g., every two years) to make sure employees receive new models when eligible. Providers are not always forthright with this information and it’s better to replace phones proactively rather than when employees run into problems. Plus, receiving a new phone can be a boost to employee morale.
  • Understand costs when travelling: Communicate any important information to employees when travelling to ensure unexpected costs don’t arise. Be proactive by reviewing the plans to see if they include a flat daily fee when employees travel (regardless of use). If employees are responsible for certain actions, like keeping phones on airplane mode during personal travel, this needs to be made clear or you may risk reimbursing high roaming fees when they return.

Type of Benefit – Membership Dues

Professional membership dues may be reimbursed by employers, including payroll, accounting, or human resource designations.

Considerations for Administration

  • Understand non-taxable situations: According to the CRA, professional memberships are not taxable when membership with an association or organization is a condition of employment, or if not a condition of employment, if the employer determines that they are the primary beneficiary of the membership.
  • Make sure employees check with their managers first: Many employees may be keen to have their professional dues covered. Remind them to check with their managers first to determine if the organization covers them. Most organizations will not cover these costs if employees have a designation that isn’t required or relevant to their position.

Integrating fringe benefits can be an effective strategy to improve employee retention, but the administration of these benefits can be challenging. While employees may be excited about the prospect of driving a company car or receiving a new cell phone, it is crucial to stay on top of the trends, and legal requirements, to make sure that consistent processes are followed and communicated, including keeping employees informed of how these benefits are handled when tax season comes around. Otherwise, these benefits, which are intended to incentivize employees, will become a headache for the finance and administration staff who manage them.

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Everything you need to know about Ontario’s new recruiter rules

Written by George Yang on . No Comments on Everything you need to know about Ontario’s new recruiter rules

Recruiters in Canada’s largest province are now required to get government licenses before they can hire staff – and if they aren’t, companies working with them could be on the hook.

Since July 1, all recruiters and temporary help agencies operating in Ontario need to be approved by the Ministry of Labour, Immigration, Training and Skills Development. If they aren’t, and continue to operate, they could face fines as high as $50,000 for repeated violations.“You want to make sure that you’re working with a reputable agency,” says Tanya Cerniuk, country head of Adecco Canada and national board member of the Association of Canadian Search, Employment & Staffing Services. “The licensing absolutely gives you that extra level of assurance that they’re compliant with all regulations.”

These new rules are well-known in the recruiting and temporary help agency world, where they’ve been seen as everything from a cash grab by the provincial government to a way for Ontario’s recruiting and temporary help agency sector to improve its reputation.

Here’s what the new rules mean for companies who depend on recruiters and temporary help agencies – and how HR managers can ensure they stay on the right side of the law.

What exactly are the new rules?

According to the Ministry’s website, any recruiter or temporary help agency applying for a license needs to provide contact information, corporate or partnership information, and whether applicants are recruiting foreign workers. Applicants also need to list details on whether they’ve fallen afoul of the Employment Standards Act, Occupational Health and Safety Act, the Workplace Safety and Insurance Act, or the Employment Protection for Foreign Nationals Act.

There are two different licenses: one for recruiters, and one for temporary help agencies. Applicants to either one must pay a $750 fee, but the latter is also required to provide a $25,000 security, through a letter of credit or surety bond. (Recruiters are not required to put up a security if they are not recruiting foreign nationals, or only do so for positions that pay above Ontario’s median wage of around $28 per hour).

Once the Ministry approves a recruiter or temporary help agency’s license, it’ll be valid for one year. Applicants that are refused a license can file a review with the Ontario Labour Relations Board.

To the provincial government, the new licensing system is a way to protect workers. “This is what gives our industry a bad name, for temporary help agencies as well as recruiters, because they can be taken advantage of in any number of ways,” Cerniuk says.

Not all recruiters agree. Jason Noble, CEO of Noble Search Group, says the provincial government decided to regulate the profession after reports of temporary foreign workers being exploited by agencies. He says the new rules were created without consulting most Ontario recruiters or temporary help agencies, and the original rules would have required all recruiters to pay a $25,000 security deposit – a lot of money for small businesses.

“Generally, we feel this is a cash grab by the government,” Noble says.

How do these new rules affect Ontario employers?

The new rules bind employers who use recruiters or temporary help agencies, too. According to the Ministry’s website, employers – as well as prospective employers and other recruiters – are prohibited from “knowingly engaging or using the services of any recruiter that does not hold a license.”

Employment standards officers are responsible for investigating violations, and the penalties are steep for employers who get caught. For a first violation, an employer can be fined $15,000. A second violation within three years earns a $25,000 fine. The next fine after that is $50,000.

Tips on complying with the new rules

First, Noble says, companies looking to hire recruiters should check on the Ontario government’s website to ensure they’re hiring someone with the proper license. It’s the only way to know for sure that a recruiter or temporary help agency is formally licensed with the Ministry.

But he also suggests HR departments do their own due diligence. Just like checking a prospective candidate’s resume, HR managers shouldn’t just accept the Ontario government’s word that a recruiter or temporary help agency is honest.

“If you’re hiring a construction company, you’re going to do reference checks,” Noble says. “Do the same thing with recruiters. Talk to people in your network. Get reference checks. Talk to as many people as you can, so that you feel comfortable that someone you’re working with is legit.”

All in all, Noble says most recruiters are honest and upstanding business owners who aren’t in the industry to exploit their clients, or the workers they hire or staff. “These are the recruiters that companies tend to work with,” he says. “But you still have to do your due diligence.”

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Unlimited Paid Vacations – too much, just right or never enough?

Written by George Yang on . No Comments on Unlimited Paid Vacations – too much, just right or never enough?

When it comes to vacation time, most Canadian workers can’t get enough. More than half — 58 per cent — said they feel they’re not getting enough time off, according to new research from Expedia that was released in June.

Unlimited paid vacation seems like the antidote to the problem, with the promise being able to take all the time necessary to relax and recharge. But some see it as a policy that, while it looks great on paper, can actually lead to less vacation days if leaders don’t model the behaviour.A 2018 survey from Namely found workers in the United States who had unlimited vacation took less time off — 13 days annually versus 15 days for those with traditional plans. While the number of companies offering it is growing, only six per cent of organizations have jumped on board, according to a 2022 survey by the U.S.-based Society for Human Resource Management (SHRM).

Flighthub CEO reports no turbulence

Flighthub, a Montreal-based travel agency, offers the perk to its staff and CEO Henri Chelhot said they introduced it as a way of “enhancing our efforts to support employee well-being.”

He hasn’t seen employees abusing the leave or, conversely, not taking advantage of it.

“We haven’t encountered significant issues with this,” he said. “Most of our employees are responsible and manage their time off appropriately.”

There are some ground rules in place, including that time off needs to be requested two weeks in advance and has to be approved by a manager before it’s taken.

“It shouldn’t negatively impact work and, ideally, vacations shouldn’t exceed three weeks at a time,” said Chelhot.

The only challenge FlightHub faced in rolling it out was the need for a more sophisticated system to track vacations across teams.

“However, addressing this challenge has led us to enhance our internal processes, ensuring better oversight and planning for employee time off,” he said.

Offering the perk to staff has another benefit, said Chelhot. “They feel more trusted and valued.” It has also helped with recruitment and retention efforts, as candidates are often curious and excited about the policy during interviews, he said.

“While some are skeptical, thinking there might be a catch, we assure them that there isn’t,” he said.

Unlimited doesn’t mean ‘unlimited’

Olivia Cicchini, an employment law and HR expert with Peninsula Canada in Toronto, said unlimited paid time off (PTO) can be great for everyone — if they are rolled out and applied correctly.

“Many employees nowadays prefer flexible work to a pay raise, so an unlimited PTO policy can be a useful non-monetary retention strategy depending on what’s important to your workforce.”

There is an unwritten rule around this perk, mainly that most unlimited vacation plans aren’t truly “unlimited.”

“Keep in mind there is almost always an implied cap on ‘unlimited’ PTO, which means employees will likely have their vacation request declined if it conflicts with operations,” she said.

That can be a slippery slope for employers, as too many denials can impact morale and hurt the company’s culture.

But offering unlimited vacation can also remove the stress employees feel to take time off, which can happen with a set number of days.

“Since there is no set vacation allowance, employees may not feel that ‘I only have three vacation days left, I better take them’ pressure,” said Cicchini.

Implementing a policy

The best time to roll out unlimited vacation is when the worker is hired, said Cicchini. That’s because putting it in the employment contract ensures they’re aware of it before they start, and policies around it can be clearly outlined in the employee handbook.

To add it for existing employees, it’s helpful to be transparent and ask staff for their opinions on the model, she said.

“Asking staff for their feedback will make them feel valued, heard, and able to make contributions to the workplace in the future,” she said. “Additionally, if the employer considers their opinions, the decision to implement the policy — or not — will reinforce trust on both sides and allow for a smoother transition.”

Working while on vacation outside Canada

Your social media feed may be full of people who are half-working and half-vacationing in exotic locales. But having employees working remotely from another country can raise operational, productivity, and even legal concerns, said Cicchini.

“Depending on the country the employee is working in, different time zones can cause a disruption to operations and team communication if the employee is not managing the change,” she said. “Additionally, productivity can suffer if the employee is working from another country directly before or after a vacation.”

That’s because it can be very tempting to put work on the “back burner” and enjoy the surroundings — and the associated freedom — for as long as they can, she said.

Tax implications could also arise, depending on how long the person is working out of the country. Plus there could be legal and privacy concerns surrounding data protection, network security, and intellectual property theft.

“It may be better for employers to encourage staff to take some well-deserved ‘me’ time and leave their laptops at home when they choose to vacation abroad,” said Cicchini.

When asked if the perk is a gimmick or a great HR practice, she said it all comes down to the company.

“It will work for some and not for others, depending on policy execution, operations, employee count and the wants and needs of staff,” she said. “It can help boost recruitment and may help with retention if the policy is applied correctly and fairly.”

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It’s time to have “the talk”: Engaging in productive salary discussions during recruitment

Written by George Yang on . No Comments on It’s time to have “the talk”: Engaging in productive salary discussions during recruitment

Earlier in my career, I tended to picture a salary conversation during the recruitment process as reminiscent of a standoff from an old Western movie. Two people are awkwardly positioned across from one another, locking eyes, with neither wanting to make the first move. After what feels like an eternity, one of them eventually flinches and poses the dreaded question: “Can we talk about salary for this position?”

Sure, maybe that’s a little bit dramatic, but for those of us working in human resources or a managerial role, this dynamic may feel a little more accurate than we might want to admit. In reality, talking about money can be uncomfortable, but it really doesn’t have to be. By viewing the recruitment process as a value exchange between two professionals rather than a stand off between two combatants, you might be surprised to find yourself taking the lead the next time you’re in this situation.

Initiate the conversation early

For starters, conversations about salary can, and should, happen early on in the recruitment process. Once you’ve screened your initial candidates and moved on to your “first touch,” whether a phone screening or an interview, it’s important to normalize talking about money as soon as you can. Of course, there may be some variations depending on your industry, but money is a huge part of everyone’s decision-making criteria. Lindsay Lalonde, head of people at T&P Group, explains the value of this approach. “By talking about salary early on, you are showing that you respect the applicant’s time, as well as your own. If there is misalignment, it can be addressed, or if it can’t, you can part ways quickly and amicably.” The fear of talking about salary too soon might be a result of not wanting to scare off the candidate, but in actuality, the longer you take to broach the subject, the more likely you may find yourself deep into the recruitment process with a fundamental part of the decision-making criteria left off the table.

Bring the job to life for the candidate

For those who feel apprehensive about discussing salary early on in the recruitment process, you may feel this way as a result of the approach you take to bring the job to life. As a human resources professional representing an advertising agency, Lalonde clarifies how important it is to represent your organization’s brand in a positive way. “The first time you connect with a candidate, you are responsible for moving from the ‘paper’ version they’ve seen in the job posting to the ‘real life’ version of the role. Too often, we place all of the responsibility on the candidate to sell themselves to the organization, and don’t view it as a reciprocal process. This is your opportunity to bring the candidate into the conversation in an engaging way.” The more a candidate knows about the position, the more comfortable they will be discussing all aspects of the opportunity, including salary. It also creates an environment where candidates are fully informed and able to put their best foot forward, as they will be able to articulate how they see themselves fitting into the role, which helps you make an informed choice as well.

Go beyond the basics

When it comes to bringing the job to life, you should come prepared to speak about all aspects of your organization, beyond the basics of job description, organizational structure and culture. Lalonde offers up some additional tips to bring more context to the position. “To be able to have a productive salary conversation, it helps to go even deeper so that the candidate really understands what they are signing up for. Consider offering up answers to additional questions, like: ‘Why are you trying to fill the position?’, ‘Why did the previous employee leave?’ and ‘How does it support our strategy?’ It might sound like going above and beyond to share this information, but without it, there can’t be a fair exchange about salary with so many questions left unanswered.”

Recruitment can be a difficult, expensive and time-consuming process. However, by enhancing your ability to lead productive conversations about salary, you are not only addressing a stressful, anxious topic for your candidates, but also increasing your chances of getting an enthusiastic “yes” to your job offer. Money is a part of life – a big part, if we’re being honest – and by accepting that fact, you can lead a recruitment process where money isn’t taboo, but rather one aspect of a collaborative process where you’re trying to find the right person for the right job for the right price.

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Shareholders almost always approve ‘Say on Pay’ votes – but that doesn’t make them meaningless

Written by George Yang on . No Comments on Shareholders almost always approve ‘Say on Pay’ votes – but that doesn’t make them meaningless

In June, shareholders at Shopify approved the compensation plan for senior executives at the Canadian e-commerce giant in a “Say on Pay” vote.

While nearly 78 per cent of shareholders gave the plan a thumbs up, that was a notable decrease from past years when the positive tally has been in the 94 per cent range.

That decline was likely, in large part, due to a recommendation by proxy advisers Institutional Shareholder Services and Glass Lewis who urged people to vote no on the plan.

Catherine McCall, the chief executive officer of Toronto-based Canadian Coalition for Good Governance, said it’s “very rare” for shareholders to outright reject compensation plans for executives.

“It’s usually above 90 per cent in favour of the board’s approach to comp,” she said. “They support the management and it’s very unusual to have a Say-on-Pay proposal pass, meaning they disapprove of management.”

Recent numbers bear out that fact. According to the Harvard Law School Forum on Corporate Governance, 98.8 per cent of votes have passed in year-to-date in 2024 for firms on the S&P 500. Just 1.2 per cent failed, and 4.1 per cent passed with less than 70 per cent support.

But that success rate doesn’t mean it’s a pointless exercise, and a vote that dips below 90 per cent approval can provide fodder for conversation for a board, said McCall.

“If you get even a significant number of votes against by shareholders — like an 80 per cent vote in favour of the management Say on Pay proposal, that would be considered a low vote,” she said.

That level of rejection, while still a minority, is a signal that there needs to be some engagement with shareholders to find out what they don’t like, she said.

“It’s a binary vote — yay or nay — so you don’t get a lot of information about what shareholders don’t like,” she said.

Why bother with Say on Pay?

If the vote is essentially a rubber stamp, then why bother conducting it in the first place? McCall said there have been a lot of good things, that may not be obvious, that have come out of Say on Pay since it started in 2007.

Disclosure has improved “incredibly” around how senior leaders are paid, she said.

“In the proxy circulars, you get a lot more detail, a lot more background, and a lot more explaining,” said McCall. “It has increase dialogue between shareholders and management or the board.”

It’s also a way of holding boards and management to account.

“If you look at it from the other side, from the management perspective, it’s ‘who are these annoying shareholders?’ Well, the shareholders own shares, and they have certain rights associated with that ownership,” said McCall.

Shareholders are not compensation experts: Pittman

Paul Pittman, president of Toronto-based The Human Well, a boutique HR consulting practice based in Oakville, Ont., said shareholders are not experts on executive pay — and aren’t experts on a lot of things about the business.

“That’s why you have experts, and that’s why you have board committees who spend a lot of time sweating over pay,” he said.

But that transparency is a good thing, as is raising awareness among the shareholders about why and how compensation is designed the way it is, he said.

“Pay is an art form masquerading as a science,” said Pittman, noting there are nuanced and tailored circumstances that must be taken into account when designing plans.

Lessons for private companies?

Both McCall and Pittman said there is some value for private companies in looking at the way executive compensation is structured at public companies, as it can provide blueprints and insights into trends.

“The primary reason you measure yourself against the outside world is to prevent other companies stealing your best people,” said Pittman. If your leaders are the people who founded the company, or part owners, there’s not a lot of concern on that front.

The dilemma comes when looking at some of the other senior executives at private companies, who are at risk of being poached by publicly traded ones, he said.

“Do you compare yourself with public companies? Public companies typically pay more because executives go to jail if they don’t do things right,” said Pittman. “So, really, it’s part of your philosophy in deciding what you’re going to pay your execs.”

Give employees a say?

Pittman said he’s always been fascinated with the idea of asking the employees, rather than shareholders, about compensation plans.

“If you ask a group of people in an organization whether Fred is worth this sort of pay increase, they’ll have a view and generally it will be the right view,” he said.

But he has yet to see an organization head down that road when it comes to paying the C-suite.

“No,” he laughed. “It’s a bridge too far. But if you believe in engagement, then it’s the natural closure I think.”

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How human capital management can help organizations effectively tap into the gig economy

Written by George Yang on . No Comments on How human capital management can help organizations effectively tap into the gig economy

“Gig economy” and “side hustle” aren’t just buzzwords anymore. Previously associated with lower-skilled labour, monetizing a hobby, or supplementing an income by providing food delivery on evenings and weekends, gig culture and part-time roles have now become an important part of the professional workforce and something we don’t talk about nearly enough. As a unique subset of the workforce grows, Human Capital Management professionals must prepare to effectively work with, manage, and leverage professional relationships with gig economy workers for the ultimate success of their organizations.

Today, gig workers encompass a broad spectrum of roles in hospitality, data entry and analysis, graphic design, writing, publishing, marketing, editing, proofreading, virtual assistance, development, and more.

The gig economy is transforming the face of the Canadian workforce. According to Made in Canada:

28 percent of adult Canadians work in the gig economy, most of them part-time

79 percent of gig workers do at least two jobs to earn a sufficient income

20 percent of Canadians have taken on a gig job in the last year to boost their income

The future of the Canadian workforce is intrinsically tied to the gig economy, and there is no sign of this trend slowing as more people under 55 participate in multiple part-time positions. Made in Canada reveals that 42 percent of men and 45 percent of women aged 18 to 34 currently work in the gig economy or have worked in it in the last five years and 39 percent of men and 32 percent of women aged 35 to 54 have worked or are still working in the gig economy.

Why are workers embracing gig work?

Whether it’s categorized as part-time, freelance, seasonal or contract work, there is no denying the appeal of gig work. ADP says, “Being an independent contractor is a great way to effect a lifestyle design. It allows [workers] to avoid commuting and office politics and maybe make more than they would have as a full-time employee. In other words, the gig economy doesn’t just apply to low-skill jobs. Its growth includes highly skilled talent that prefers a new way to work.”

Jarrod Stark embraced gig culture through the umbrella of his company, Billet Media, which he founded in 2013. After being laid off from a job in sales, Stark wanted to shift into marketing. Due to family, life and financial obligations, he knew taking a low-paying internship wasn’t viable. “Instead, I did what many entrepreneurial people do when they can’t find the job they want: I created it,” Stark says, “My logic in starting my own company was that I would likely have better luck convincing a small business owner to pay me a small amount of money for marketing, video and advertising services than I would convincing a corporate hiring manager to pay me a lot of money with only ‘analogous’ job experience. It turned out that I was right. Customers don’t typically critique your CV the same way an employer would; they simply Google you, look at your website and samples of your work and quickly decide if they want to do business with you or not. For me, fortunately, that has been enough.”

A low-commitment way to tap into talent

Gig culture allows businesses to hire top-notch professionals without the longer-term commitment, salary and benefits expenses associated with full-time employees.

Expert support can be hired on a longer-term or temporary basis to help during peak seasons, such as fall registration peaks at academic institutions or tax season at financial companies.

Companies with a central or head office and nation-wide or international clients can hire people to work remotely as an alternative to having in-person staff time-shift their hours to meet the 9-to-5 demands of different time zones. Companies with part-time employees can allow space sharing or remote work to save money on office space.

Taking a true headcount

While many organizations allocate contractors’ fees to other budget lines, more sophisticated systems manage and count the work of such workers as part of the person-hours needed to run the business.

Applying performance measurement systems with goal setting and project tracking to contract employees can provide them feedback needed to do their jobs better and potentially flag them for new projects in areas where they have previously excelled.

Responsible onboarding practices

Centralized systems can allow gig and full-time employees to access the same information and collaborate on projects. Human resources teams will need to customize some of the onboarding process for gig workers, including setting clear expectations and providing information on how to get the support they need for success. Just like for full-time employment hires, those hiring should create a process to ensure they’re hiring low-risk talent with the right skills and culture fit to work alongside full-time staff.

Limitations and challenges

Some leaders may struggle with the unique dynamic of gig workers in understanding how they fit into the team. Gig workers fall into a category outside of the traditional boss/employee dynamic, with the company acting as their client. Some people find this differentiation difficult to manage effectively, and human capital management (HCM) professionals will need to lead the charge in finding solutions that allow gig workers and full-time staff to work together effectively.

In addition, many gig workers select their vocation for its flexible hours and may have other work or demands that compete with projects during standard working hours. Organizationally, last-minute requests must be considered on a case-by-case basis for gig workers, which may contrast with how last-minute projects are assigned to full-time staff.

Conclusion

The gig economy is dynamic and evolving, and both HCM and freelancers will need to navigate it together. Thorough documentation of successes and challenges, the development of best practices and education on effective communication will be vital to ensuring the ongoing success of everyone involved.

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Women making change in pay equity

Written by George Yang on . No Comments on Women making change in pay equity

Canada passed its first equal pay legislation in 1951, making it illegal to pay men and women different salaries for the same job, yet nearly 75 years later, pay equity remains a problem. Despite progress on wage disparity, work still needs to be done. Many organizations use occasions such as International Women’s Day to educate and advocate for change; however, a select few have managed to grow their advocacy work, pushing forward projects that advance pay equity 365 days a year.

We’ve come a long way, haven’t we?

On average, Canadian women earn 11 to 21 percent less than Canadian men. Indigenous women and women who moved to the country as adults, experience the greatest wage disparity, at 20 and 21 percent, respectively. The wage gap persists, even though, for over 15 years, Canadian women in most sectors have attained more post-secondary education than men, a trend that continues to grow.

Wage disparity impacts women in every sector, even in women-dominated fields such as human capital management. A recent national survey by the Human Resources Professionals Association (HRPA) and Chartered Professionals in Human Resources (CPHR) revealed that while “84 percent of respondents identified as female, men are still more statistically successful in attaining higher salaries and higher positions.”

Stopping the party and starting conversations

Lindsay Stanford, a passionate customer experience and innovation strategy leader with over 20 years of experience, works as Head of Strategy for SimplyTold. She is also a partner at Stop the Party (STP), a Canadian initiative to close the gender wage gap through awareness, education and action.

Stanford notes that gender bias in the workplace continues to limit women’s success and begins as early as the recruitment process. She points to job descriptions using masculine-coded language like “ambitious,” “competitive” and “assertive” that may deter women from applying, as they may feel less qualified or welcomed in environments that emphasize these traits. She also suggests that something as fundamental as the communication styles women are socialized to use can put them at a disadvantage when negotiating salaries or promotions, leading to lower wages and fewer opportunities for career advancement.

The most recent STP campaign builds on conversations about women’s equality in the workplace as it relates to women’s and men’s different communication styles. Stanford says, “We partnered with VML to create a first-of-its-kind email editor tackling gender-biased language in the workplace, called MissType. We wanted to bring awareness to how language can both reflect and perpetuate gender bias in the workplace. To use MissType, you enter your text, and the editor uses artificial intelligence to analyze your writing and provide suggestions that embody both traditionally masculine and feminine language to create more effective phrasing that is direct and empathetic, the best elements of both communication styles.”

The MissType project references a Harvard Business Review study showing that women score significantly higher on many leadership competencies than men, including communication, but are discouraged from and professionally penalized for using “traditionally feminine” language in favour of more masculine language.

Taking action as business leaders

Stanford says, “Organizations should promote diversity and inclusion and create work environments that value diversity and prioritize equity. They can establish diversity and inclusion committees or task forces to identify and address barriers to gender equality and pay equity.” These task forces can celebrate diversity and develop hiring, mentoring and sponsorship programs and practices. Such programs organically encourage women to pursue leadership roles and increase representation on advisory boards and in senior management positions.

Looking to the future

Alison Venditti, founder of Moms at Work, is a celebrated advocate for pay transparency, something intrinsically linked to the wage gap. Vendetti is emphatic that keeping salary ranges a secret reinforces discrimination, which, in turn, reduces pay equity. Simply put, knowledge is power, and women can better negotiate for equal pay when they have access to this information.

In a blog promoting Moms at Work’s Pay Transparency Toolkit, Venditti writes, “Pay Transparency is not only a good corporate policy; it is one of the simplest and fastest ways to prevent unconscious discrimination in hiring practices and close the pay gap.” The Moms at Work toolkit debunks pay transparency myths and provides workable templates to start the conversation on pay transparency with your own organization’s hiring managers and recruiters.

Vendetti routinely uses her public platforms to normalize talking to others about our salaries, sharing pay transparency and wage gap information on social media, and calling out employers via online comments or emails that you will not be applying for or sharing a job posting that does not include a salary range.

Making change together

Advocates for pay equity have a shared vision for change in Canada. Connect with leaders like Stanford and Vendetti to access educational tools and content and to pursue partnerships and collaborations with others passionate about ending the wage gap. The work we do today will directly influence the future of pay equity.

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Ontario’s Pay Equity Office Unveils a Hidden Inequality: “The Gender Pension Gap”

Written by Community Manager on . No Comments on Ontario’s Pay Equity Office Unveils a Hidden Inequality: “The Gender Pension Gap”

Despite Canada’s robust retirement income system, women are facing an uphill battle in securing financial stability during their golden years. And the situation hasn’t improved much since 1976.

A new ground-breaking research paper, Understanding the Gender Pension Gap in Canada, published by Ontario’s Pay Equity Office with Dr. Elizabeth Shilton, feminist economist and labour lawyer, finds that although Canada’s retirement income system is recognized as one of the strongest in the world, not all Canadians are benefitting equally. While retirement incomes have increased substantially for all Canadians, men have consistently fared better than women and a persistent gender pension gap remains.

“Women receive $0.83 to every $1.00 a man receives in retirement income. That is a 17% gendered pension gap,” notes Kadie Philp, Commissioner and CAO of the Ontario Pay Equity Commission. “This stark reality isn’t just a number – it’s a concerning trend contributing to a notable gender disparity among older Canadians, particularly women.”

The Gender Pension Gap (GPG) is the difference between retirement income received by men and women. In Canada, this income is calculated from three sources: Old Age Security and Guaranteed Income Supplement, Canadian Pension Plan/Quebec Pension Plan, and private pensions. In 2020, approximately 200,000 more women than men aged 65+ were living below Canada’s low-income cut-off. Digging deeper, 21% of women aged 75+ had incomes below this threshold — a concerning 51% higher than their male counterparts of similar age. This underscores a deeply entrenched inequality that demands urgent attention.

The report, Understanding the Gender Pension Gap in Canada, looks at what might be behind this stark inequity and found that, among other things, women are more likely than men to earn lower wages and to spend fewer hours in the paid labour market. Both phenomena contribute to the persistent gender earnings gap, which in turn creates savings gaps that ultimately lead to the gender pension gap.

According to Ontario’s Pay Equity Commissioner, Kadie Philp “Gendered differences in income, whether while working or in retirement, have multiple and interrelated causes. This report is a must read for everyone interested in redressing workplace inequities. It also highlights the need for additional research on the impacts of the gender wage gap on women in all stages of their lives”.

Visit https://payequity.gov.on.ca/what-we-do/ for more information about the Pay Equity Office.

Quick Facts from the report:

• Persistent Gap: A gender pension gap (GPG) exists in Canada and has not narrowed since 1976 when it was 15%. As of 2021, the GPG was 17%, despite women’s increased labour force participation.

• Size of the Pension Gap: Women receive 83 cents for every dollar men receive in retirement income, with the average retirement income for Canadian women in 2021 at $36,700 and the median at $29,700.

• Global Ranking: Canada ranks 12th out of 47 countries in the Mercer CFA Institute 2023 Global Pension Index. In 2021, the GPG in Canada was 17% according to Statistics Canada and 21.8% according to the OECD. In comparison, the average GPG across 34 OECD countries was 25.6%, with Estonia the lowest (3.3%) and Japan the highest (47.4%).

• Disproportionate Impact: In 2020, approximately 200,000 more women aged 65+ lived below Canada’s low-income cut-off than men, with 21% of women aged 75+ having incomes below the cut-off, 51% higher than men of similar age.

Factors causing the Gender Pension Gap:

• Childbearing and child-rearing. Women are more likely than men to exit the labour market (temporarily or permanently) after having children. In 2015, the employment rate of women with children under the age of 6 was 69.5%, yet the employment rate of men with children under the age of 6 was 90.8%, signaling a 21.3% gap. Women’s employment rate increases with the age of their children but never catches up to that of men’s.

• Caregiving. Women are more likely than men to work part-time due to caregiving responsibilities. In 2021, 24.4% of all Canadian female workers were part-time compared with 13% of all male workers. Women’s most-cited reason for working part-time was caring for children. Available data states that “one quarter of women reported caring for children as their reason for working parttime, compared to 3.3% of men”. Furthermore, women who work part-time may not be eligible to enroll in their workplace pension plan if they work fewer hours than their employer’s threshold.

• Unpaid domestic labour is still mostly performed by women. In 2017, 89.9% of insured mothers in Canada took maternity/parental leave – at reduced income level – compared with 11.9% of insured fathers/partners.

• The existing gender wage gap (GWG). Two of the three “pillars” of Canada’s pension system are designed to be tied to earning power. Canada’s gender income gap was 28% (2021) for average annual earnings, and 11% (2020) for average hourly earnings.

• Historical Bias: Canada’s public pension system was and still is designed for heterosexual couples with a male breadwinner.

Canada’s Retirement Income System: The GPG in Canada refers to the disparity in retirement income between men and women, measured across the three pillars of Canada’s retirement income system:

• Pillar One: Old Age Security (OAS) and Guaranteed Income Supplement (GIS). OAS/GIS is a social pension, administered by the Government of Canada. An individual must have an income less than $134,626 (as of 2023) to qualify and payment amounts are based on age, marital status and income. Employment history is not a factor in determining eligibility (i.e., payments are not based on contributions). Pillar one is designed to be gender-neutral but favours women given their longer life expectancy compared with men. It indirectly addresses gender biases by providing essential financial support to women, who may have less access to other retirement income sources.

• Pillar Two: Canada Pension Plan (CPP) / Québec Pension Plan (QPP). CPP/QPP is a mandatory, public contributory pension plan administered by the Government of Canada and Government of Québec, respectively. With CPP, an individual’s pension payout is based on their earnings, their contributions, and the age they decide to start collecting pension. The QPP is funded by contributions made by individuals who work in Québec and their employers. Pillar two embodies traditional gender biases. It is based on earnings and contributions, which historically favour men who have had higher incomes and longer work histories. This perpetuates the gender pension gap as women often earn less over their lifetimes and may have gaps in their employment due to caregiving responsibilities.

• Pillar Three: Private Retirement Income. Private Retirement Income comes from sources such as workplace pension plans and personal plans (e.g., registered retirement savings plans). They are voluntary, private contributory pension plans. Not all individuals purchase a personal plan and not all employers provide workplace pension plans. In fact, three-quarters of Canadian adults are not covered by workplace pension plans. Pillar three represents gender biases in access to workplace pension plans and personal retirement savings. Women are disproportionately affected by the lack of workplace pension coverage due to factors such as the gender wage gap and part-time employment. Women are also less likely to have personal retirement savings due to lower incomes and fewer opportunities for financial investment.

SOURCE: Pay Equity Office

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Show me the money: Getting real about pay transparency in the workplace

Written by Drew Maginn on . No Comments on Show me the money: Getting real about pay transparency in the workplace

In Canada, there appears to be a growing movement toward greater pay transparency in the workplace. Prince Edward Island, Newfoundland and Labrador, and British Columbia have already moved forward with legislation that requires salary ranges to be included in job postings and restricts employers from asking applicants about salary histories. Ontario appears to be the latest province joining the movement, introducing similar legislation in late 2023, albeit with some gaps, including questions about whether it will apply to positions earning over $100,000 per year. 

Most employees would agree that greater transparency about pay is a good thing, but actual practice varies greatly across different organizations. The results from Payscale’s 2023 Compensation Best Practices Report demonstrate some of these differences, as only 45 percent of compensation and human resource professionals surveyed indicated they already include pay ranges in job postings, and only 65 percent have formal pay structures. While it does appear that legislation can get organizations moving in the right direction, there are many additional steps that should be considered to better integrate pay transparency into organizational practices beyond simply including a salary range in a job posting.

Going beyond a salary range during recruitment

If your organization includes salary ranges in its job postings, it has taken the first step in being upfront with potential applicants. However, simply including a salary range without any context can leave applicants wanting more. Organizations can take the additional step of not only including a salary range, but also including background information about the process they follow to determine it. For example, many non-profits and professional associations rely on external research through organizations like the Canadian Society of Association Executives, which produces an annual Benefits and Compensation Report. This report summarizes benefits and compensation across different positions, considering contributing factors such as number of employees, geographical location, and annual revenue. Similarly, other organizations conduct a regular market analysis to ensure they are paying their employees fairly. If your organization is doing the work, don’t be hesitant to share it. Providing this information shows your future employees that they can trust that their salary is based on actual research and that the process followed is shared openly and honestly.

Empowering managers to continue the conversation

Once an individual signs their employment agreement, many managers breathe a sigh of relief and assume that an awkward conversation about salary won’t happen again until the next performance review cycle. However, it is important that managers feel empowered to discuss salary on an ongoing basis, which includes having the proper tools and training to engage with their employees. Payscale’s report highlights that manager training on pay communication only occurs in 49 per cent of organizations.

If managers are expected to have these types of conversations with their employees, it is up to the team responsible, typically the human resources department, to provide access to training and clear, understandable documentation in the form of a formal pay structure or pay/compensation system paired with credible research. With access to this type of information, managers may feel less hesitant entering conversations about compensation and can make sure staff have a clear understanding of where their salary fits within the system. In more fully developed systems, managers can also speak to additional incentives beyond salary that comprise the full compensation package for each position, including benefits, vacation time, working arrangements and other perks.

The alternative? Managers who are untrained in communicating salary may pass on the conversation to other departments, such as human resources or payroll, or avoid the conversation altogether. That leaves each employee making assumptions about their salary and, in most cases, they are going to assume that their pay is unfair and that your organization has something to hide.

Maintain open lines of communication

While discussions about salary usually occur during hiring and performance reviews, that doesn’t mean that organizations should feel hesitant to communicate with their employees throughout the year. This could include making a salary range document permanently available on an intranet or sending staff letters at the beginning of each fiscal year to outline any salary adjustments that have occurred, such as a change to a position range or a cost-of-living increase. These ongoing communications let employees know that salary is not a topic to be avoided and that issues such as pay equity are a priority. While some individuals will still be unhappy with their salary and may leave as a result, at least this won’t be due to a lack of information or making assumptions that may not be true.

The discussion around pay transparency is ever-evolving and will likely continue to evolve over time, whether through government legislation or shifts in best practices across different industries. However, by being proactive and taking additional steps to share salary information more freely, whether legislated or not, you can improve transparency, accountability, and trust in your organization among new and current employees alike. Many organizations tout transparency as an important core value for business excellence. Use this legislation as an opportunity to “walk the walk” and take additional steps to be open and fair about compensation with your staff, beyond the government mandate. This honest approach increases staff loyalty and retention, reducing the number of times you need to write a job description in the first place, which is a huge win for any organization.

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