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HCM Topic: Compensation and Benefits

Making use of mental health benefits

Written by Todd Humber on . No Comments on Making use of mental health benefits

Nearly a decade ago, Sun Life started to notice a shift in the types of benefits coverage being accessed by its employees.

“We could really see that mental health was emerging as our most prominent category of disability,” said Nicole Montpetit, the Toronto-based vice-president, total rewards, Canada at Sun Life.

In response, the company embraced a more proactive stance, boosting mental health coverage up to $12,500 annually as part of its flexible benefits, she said. The goal was to equip workers with the tools to focus on their psychological health in a proactive manner for themselves and their families.

That money can be spent on a range of professionals including counsellors, family/marriage therapists, psychiatrists, psychotherapists, psychologists, and social workers.

“It’s a large number, but I would say that if people do have needs, we need to make sure that they can get covered and that they have adequate access to that support when they need it,” she said.

Mental health coaches and practitioners

It also offered up mental health coaches to its workforce, which numbers about 12,000 in Canada.

“It’s a free and confidential service where people can, proactively almost like a checkup with the doctor, go and consult with a registered mental health practitioner and really create a personalized action plan,” she said.

It also offers an employee and family assistance program (EFAP) through its Lumino virtual care platform. And its most recent addition to the mental health toolkit is something Montpetit said is “a bit unique.”

About a year-and-a-half ago, it hired a full-time mental health practitioner as part of its HR team to support its leaders and its workers, she said.

“This is an individual who will really consult with leaders and employees on different types of situations,” said Montpetit. “We have a small but mighty team that focuses on our programs.”

That includes offering advice to managers when supporting an at-risk employee in terms of what resources might be available and suitable to help them through the issue, she said.

More employees using benefits

Employees haven’t been shy about using the benefits, something Montpetit called a “good thing.”

In 2020, mental health benefit usage was around 12 per cent, she said. Last year, that figure had increased to 18 per cent.

“We’re very driven by helping our clients and our employees achieve lifetime financial security and live healthier lives,” she said. “We know that we need to be a leader in this space to really inspire meaningful action, and we do that by being best in class for our own employees.”

It also goes a long way in fostering a culture that is “inclusive, flexible, and caring,” she said, adding the goal is to provide staff the support they need so they can do their best work.

“We’re meeting them in those moments that matter. There’s lot of linkages — these things are related, right? If people’s financial well-being is not stable, that affects their mental health. If they’re going through an illness, that can affect their mental health. And their mental health can affect their work,” she said. “We really feel it’s important to look at it holistically.”

Mental health versus mental illness

Bill Howatt, a workplace mental health expert and founder of Ottawa-based Howatt HR, lauded Sun Life’s approach — and said more organizations need to take a proactive stance on their workers’ mental fitness.

“You shouldn’t need to have a meltdown to go talk to a psychologist,” he said. “But employers are not taking the same approach to mental health as they did with, for example, fitness when they bought gym memberships for everybody.”

Too many leaders and organizations are confusing mental health with mental illness, and they’re not the same thing, said Howatt. He wants to see mental health benefits treated like other paramedical benefits — where employers encourage proactive use to prevent long-term issues.

Howatt said one critical workplace measure of mental health is how much time employees spend flourishing versus languishing.

“Employers understand that engaged employees are more productive, but we haven’t yet crossed the Rubicon to understand that engaged employees are flourishing employees,” he said. “In reality, what is engagement? It is how employees feel.”

Setting up a program

Organizations looking to setup a new workplace mental health program, or improve existing ones, need to focus on a comprehensive program and not individual tactics, said Howatt.

One tip he offers is to avoid branding it as a mental health strategy and opt instead for an “employee experience” program, he said.

“I believe there is so much misconception on what a workplace mental health strategy is,” he said. “Employee experience, however, is a focus on helping employees have a positive experience. It’s clearer.”

He outlines a strategic approach that includes adopting a “Plan-Do-Check-Act” cycle, emphasizing the importance of measurable outcomes and program evaluation.

Individuals overseeing these programs should have credible knowledge and be able to construct a business case that showcases the value of investment (VOI) and return on investment (ROI) based on evidence-based practices, he said.

It’s also a worthwhile exercise to hold focus groups and interviews with teams to “discover all the things that are charging their batteries versus what is draining batteries,” he said. The goal is to foster sustainable habits over sporadic activities.

Montpetit said one relatively inexpensive benefit that can make a big difference is offering care days to workers.

“That offers the flexibility for people to care, proactively, for themselves,” she said, adding that many Gen-X workers are currently part of the “sandwich generation” taking care of both their children and elderly parents.

“Caregiving can be quite stressful and can really impact people’s mental well-being as well,” she said.

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Use or lose it: Ensuring your employees get the most from their benefits program

Written by Drew Maginn on . No Comments on Use or lose it: Ensuring your employees get the most from their benefits program

As employers strive to remain competitive in today’s workforce, many are starting to realize the important role that their benefits programs can play in supporting the overall health and well-being of their employees.

According to a 2023 study from RBC Insurance, 66 per cent of employees with access to employer-provided benefits rate their overall well-being as good or excellent, compared to 49 per cent of those without. In addition, 81 per cent also felt that access to benefits demonstrates that their employer supports them in maintaining work-life balance. With this in mind, all companies should be asking themselves whether they are doing all they can to make sure their employees are getting as much as possible out of these programs and understanding the value they truly provide.

Market your benefits program as a recruitment and retention tool

Given the ups and downs of recent years, many Canadians are placing an increased importance on access to employer-provided benefits. The 2023 Benefits Canada Healthcare Survey reported that 72 per cent of Canadian benefits plan members appreciate their benefits today more than they did before the COVID-19 pandemic. Companies need to understand that this trend is an opportunity to not only use their benefits program as a recruitment tool, but also as an aid in employee retention. Companies offering a benefits program are demonstrating an investment in the short- and long-term health and well-being of their employees, as well as providing significant cost savings that support their financial health. This investment should be consistently marketed to employees. This could be as simple as creating customized visuals or infographics throughout the year, using a design program like Canva, to remind employees how their benefits program supports their overall health while benefiting their wallets at the same time. Illustrating the value of benefits in actual dollars is an effective way to shows employees how much money they are leaving on the table by not taking advantage of their employers’ investment, while also reminding them that their compensation goes beyond their biweekly paycheque.

Understand your employees’ differences and needs

Jenn Guglick, a Certified Human Resources Leader with over 10 years of experience supporting employee benefits programs, notes that employees value their benefits differently based on a variety of factors. “Employees will value access to different benefits based on their individual circumstances. For example, an employee nearing retirement with dependents is going to have very different needs then someone who is single and early in their professional career.” When sharing the details of any benefits plan, taking the time to ask questions and understand each employee’s circumstance can go a long way in positioning how the benefits might be valuable for them. Depending on the size of your company, individual discussions may not be possible, but sharing the breadth of your plan with all employees can help them understand how it can work for them now, as well as into the future as their circumstances change.

Different benefits appeal to different roles

Employees with different roles and working conditions may need to be reminded of specific benefits that can add value to their health and well-being. For example, employees in roles that require more screen time and sitting throughout the day may find value in blue light glasses and regularly accessing chiropractic services. Others in more physically demanding roles, such as event planning or construction, might consider being fitted for orthotics or scheduling massages following stressful periods of work. Providing ideas for how to maximize the benefits based on individual need shows you are a workplace that values self-care and communicating that value to staff.

Flexibility is important

Many companies have begun offering flexible benefits programs, where employees can personalize their benefits based on their individual needs. Guglick notes that companies offering these types of benefits can market the program differently than those with a set program. “Flexible benefits programs allow employees to choose their level of coverage based on what makes the most sense to them. This flexibility allows companies to promote how each employee can personalize and prioritize what they need and leave out what you need less coverage for, or perhaps have covered already with a spouse’s plan.” These programs can grow with each employee over time, and the opportunity for customization is of huge value to anyone, at any stage in their lives.

Access to employer-provided benefits is increasingly important for any current or prospective employee. A program that is broad enough to cover most employees’ needs and flexible enough to cater to the individual is a key element in every talent attraction and retention toolkit. But regardless of how valuable your benefits program is, if staff don’t use it, the value isn’t there. Take the time to position your benefits program as an investment from the employer into employee well-being. Good employees are hard to find – if you don’t prioritize their well-being via consistent and effective promotion of the perks of working for you, another organization will.

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Pay transparency: Making pay part of the conversation

Written by Todd Humber on . 1 Comment on Pay transparency: Making pay part of the conversation

Money is no longer a taboo topic in many Canadian workplaces.

Pay transparency legislation is turning wages and salaries into fodder for open conversation, a move driven in part by an effort to close the stubbornly persistent gender wage gap.

Women earned 89 cents for every dollar a man earned in 2021, the most recent data available from Statistics Canada. That’s an 11.1 per cent gap between the sexes.

Catalina Rodriguez, an employment lawyer, workplace investigator and mediator at Forte Law in Surrey, B.C., said it’s telling how fast British Columbia moved in passing its pay transparency legislation. The bill was introduced the day before International Women’s Day in March 2023 and became law on May 11, 2023.

“No law is ever passed that fast,” she said. “The purpose of the legislation, according to what the government is saying, is to try and shorten the wage gap between men and women.”

That gap is even more pronounced when it comes to women who are Indigenous, colour, or recent immigrants, said Rodriguez. Indigenous women earn 20.1 per cent less and immigrant women who landed as adults earn 20.9 per cent less, according to Statistics Canada.

‘Massive cultural shift’

The changes will be a “massive cultural shift” for many organizations that not only didn’t want staff talking about paycheques in the past but may have even reprimanded them for doing so, she said.

Rodriguez talked about her days working in the financial sector where money was an off-topic subject for all employees.

“Your pay was sacredly secret, and that was made very clear from the moment they hired you,” she said. “What your bonus is, what your pay is, is between you and I and you can’t share that with anybody.”

In organizations where money is really taboo, that culture may not change over night. Leadership may still abhor the thought of staff discussing pay, but “if it comes to the ears of any manager, they can’t do anything about it,” she said.

Employers are also going to have to get used to having difficult conversations with staff whose wages are out of line with a co-worker doing the same job, said Rodriguez.

No consequences in B.C. legislation

B.C.’s legislation doesn’t contain penalties for non-compliance, according to Rodriguez.

“This is not a complaints-based regime,” she said. “There’s no consequence for non-compliance with the act itself or the regulation.”

But there are other avenues for wronged employees, including under section 12 of the province’s Human Rights Code which specifically bars discrimination in wages by sex, she said.

“Finding out that I’m being paid less on the basis of my gender or sex still entitles people to file a human rights claim,” said Rodriguez.

Instead, the B.C. law is an effort to get employers to do some navel-gazing and actually find out — using real data — what is happening in their payroll.

“And once you look at the wage gap, and you see that you have one, start fixing it,” she said. “But we’re not going to punish you if you don’t fix it. We’re going to, perhaps, put you on a list of people that are not complying by putting their report out there.”

An imperfect process

John Hyde, an employment lawyer with Hyde HR Law in Toronto, said the transparency push across the country is “beneficial” but it’s not a perfect process.

“It’s the good, bad, and ugly of any legislation,” he said. “It’s important to remember that salary levels are a very emotional subject for employees.”

The upsides are obvious, including building trust, engagement and eliminating the chance of bias, he said. It also can save a lot of time on both sides — because many hiring discussions go off the rails when the conversation turns to compensation. Posting ranges in job postings can put an end to that quickly.

“There are so many times that employers find themselves in a situation where they will engage a prospective employee, and the communication flow will be fabulous, until we talk about wage rates,” he said. “And then it falls apart.”

It can get problematic, though, in a tight labour market where employers might need to artificially inflate salaries in a job posting to attract quality candidates, he said.

“What is the effect upon the existing employee group? Studies have shown that if employees feel they’re getting paid less than somebody else for relatively the same type of work, then production decreases,” said Hyde. “There’s an argument that this is going to increase the cost of doing business for employers everywhere.”

One tactic employers could use in that scenario is a signing bonus, he said. “But, again, that adds to the price of recruitment.”

Hyde’s advice to employers is simple: Embrace it because there is going to be a push for more and more transparency.

“Number one, correct the injustices you current have,” he said. “Number two, develop a really good education policy and plan to address perceived injustices and to explain why rates may be different.”

SIDEBAR

Coast-to-coast breakdown

British Columbia

As of May 2023, the Pay Transparency Act prohibits employers from asking job applicants about past salaries and from penalizing employees who discuss or inquire about compensation or pay transparency reports.

As of November 2023, employers are required to include wage and salary information in public job postings.

The requirement for employers to complete and post pay transparency reports is being phased in, with deadlines set for different categories of employers ranging from Nov. 1, 2023, to Nov. 1, 2026, based on the size of the employer.

Ontario

Ontario passed the Pay Transparency Act, 2018, but the legislation never came into force due to a change in government.

In November 2023, Ontario introduced pay transparency provisions within the proposed Bill 149, Working for Workers Four Act, 2023.

The proposed pay transparency provisions would require employers to disclose expected compensation or a compensation range in public job postings.

Nova Scotia

Nova Scotia’s Labour Standards Code prohibits employers from inquiring about the pay history of job applicants or employees and from punishing employees who share their pay information with colleagues.

In October 2023, the opposition Liberals tabled the Pay Equity and Pay Transparency Act, a private member’s bill which is aimed at enhancing pay transparency and equity.

If passed, the proposed Act will mandate that employers include expected pay or salary ranges in job postings, prepare pay transparency reports, and prohibit the disciplining or dismissal of employees who inquire about their own pay or the employer’s pay policies.

Prince Edward Island

As of June 2022, P.E.I.’s amended employment standards legislation requires employers to disclose expected pay or a pay range in public job postings.

The legislation prohibits employers from inquiring about a job applicant’s past salary.

Employers are forbidden from punishing employees for discussing their pay, inquiring about pay policies, asking for compliance with pay transparency provisions, or reporting on pay transparency compliance to an Employment Standards Inspector.

Newfoundland and Labrador

In Fall 2022, N.L. passed Bill P-3.02, which aims to introduce the Pay Equity and Transparency Act for public and private sectors, though pay transparency provisions have not yet been implemented.

Once implemented, the legislation will require employers to include pay information in publicly advertised job postings and prohibit them from inquiring about a job applicant’s past salary.

The legislation will also mandate that employers prepare pay transparency reports and protect employees from retaliation for discussing their pay or inquiring about pay transparency reports.

Federal

The federal government’s Pay Equity Act came into force on Aug. 31, 2021. It establishes a pay equity regime for federally regulated workplaces with 10 or more employees, including the private and public sectors.

Employers are required to develop and update a pay equity plan. This involves identifying job classes, determining if they are predominantly male or female, assessing the value of work, and comparing and adjusting compensation to ensure equal pay for work of equal value.

Employers must establish their pay equity plan within three years of becoming subject to the Act, adjust compensation where necessary, and update their plan every five years to maintain pay equity and address any new pay gaps.

Other

Saskatchewan: No pay transparency or pay equity laws.

Manitoba: No specific pay transparency law, but a draft bill has been introduced in the past. In 1985, it passed The Pay Equity Act which applies to the public sector.

Quebec: No specific pay transparency law, but it does have pay equity legislation that was passed in 1996 and strengthened in 2009.

New Brunswick: No specific pay transparency law, but it has 2010 pay equity legislation that applies to the public sector.

Northwest Territories: No pay transparency or pay equity laws.

Nunavut: No pay transparency or pay equity laws.

Yukon: No pay transparency or pay equity laws.

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Everything You Need to Know About British Columbia’s New Pay Transparency Act

Written by Community Manager on . 1 Comment on Everything You Need to Know About British Columbia’s New Pay Transparency Act

In a significant move towards gender pay equality, the province of British Columbia has taken legislative action to address the persistent gender pay gap. The government has introduced the Pay Transparency Act, a groundbreaking piece of legislation designed to foster pay equity and combat systemic discrimination in the workplace.

In 2022, women in B.C. earned 17% less than their male counterparts. This wage disparity not only affects women but disproportionately impacts Indigenous women, women of colour, immigrant women, women with disabilities, and nonbinary individuals.

Recognizing the urgency of addressing this issue, the B.C. government has embarked on a mission to rectify pay inequities and promote a fairer, more inclusive workforce.

The Pay Transparency Act: Key Provisions

The Pay Transparency Act, which was passed in May 2023, encompasses several pivotal provisions aimed at levelling the playing field in terms of compensation and workplace equity.

Wage Transparency

Effective November 1, 2023, all employers in B.C. are mandated to include wage or salary ranges in all publicly advertised job postings. This requirement will be gradually introduced to employers of different sizes over the next few years, allowing them time to adapt to the new regulations:

    • Nov. 1, 2023: BC Public Service Agency and Crown corporations with more than 1,000 employees.
    • Nov. 1, 2024: Employers with 1,000 employees or more.
    • Nov. 1, 2025: Employers with 300 employees or more.
    • Nov. 1, 2026: Employers with 50 employees or more.
Pay History and Pay Secrecy

As of the Act’s passing, employers are prohibited from asking job applicants about their pay history. Furthermore, employers cannot penalize employees for discussing their pay with colleagues or potential job applicants.

Pay Transparency Reports

Employers above a certain size will be required to prepare and publish annual pay transparency reports by November 1st of each year, beginning in 2023. These reports will need to disclose pay gaps among certain groups within the organization.

Inclusivity Beyond the Gender Binary

B.C. is pioneering inclusivity by collecting gender information from employees, ensuring that addressing the pay gap encompasses individuals who identify as transgender, gender-diverse, or nonbinary. This progressive approach sets B.C. apart as the first jurisdiction in Canada to do so.

Benefits and Challenges

The Pay Transparency Act offers several benefits, including:

    • Promoting Equity: By requiring wage transparency and prohibiting pay history inquiries, the Act promotes fair compensation practices, reducing the gender pay gap.
    • Inclusivity: The Act’s focus on diverse gender identities reflects a commitment to inclusivity in pay equity initiatives.
    • Accountability: Annual pay transparency reports hold employers accountable for addressing wage disparities within their organizations.

However, implementing these changes may pose challenges for employers, such as adjusting recruitment practices and adapting to new reporting requirements. It’s crucial for companies to proactively address these challenges to ensure a smooth transition.

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Province of Employment (New CRA Administrative Policy)

Written by Community Manager on . 6 Comments on Province of Employment (New CRA Administrative Policy)

Earlier in September, the Canada Revenue Agency (CRA) introduced a new administrative policy regarding the determination of the province of employment for remote employees who do not physically report to their employer’s workplace. This policy will take effect on January 1, 2024.

Previously, the province of employment for remote employees was based on the location of the employer’s business and where the employee’s salary was paid, with no consideration for the employee’s residence or the location of third-party payroll processing.

The new policy aims to simplify this determination without impacting provincial tax or benefits administration.

The primary indicator for determining a remote employee’s province of employment is whether they would physically go to the employer’s establishment to perform their job duties if not for the remote work arrangement. For employees who previously reported to an employer’s establishment in person, that establishment is considered their province of employment unless circumstances or duties have changed.

Secondary indicators include the establishment where the employee attends or would attend virtual meetings, receives work-related materials, receives instructions, is supervised, or would report based on their duties. All indicators should be considered together to make a reasonable determination.

To be deemed “reasonable” by the CRA, this determination must be supported by the employee’s specific employment situation and cannot be used to evade source deductions or employer contributions.

If an employee can be reasonably considered attached to multiple employer establishments, the same indicators should be used to determine the primary establishment.

An employer’s establishment doesn’t have to be a permanent physical location and can include owned, leased, or rented places in Canada from which employees work or are paid.

Canada Revenue Agency

Employers must withhold the appropriate Canada Pension Plan (CPP), Employment Insurance (EI), and income tax based on the correct province of employment determination. Consequently, employers must review employment contracts, obtain new TD1 forms, use the correct payroll deduction tables, and pay health tax premiums and levies if applicable.

Determine your employees’ province of employment using the CRA’s interactive tool!

For more information, visit NPI’s publication here.

Sources:


Closing the Gap: The Importance of Pay Equity in the Workplace

Written by Bianca Mueller, CPB on . 5 Comments on Closing the Gap: The Importance of Pay Equity in the Workplace

This article is authored by Wagepoint and was published in Wagepoint’s blog in July 2023.

Pay equity, or the concept of equal pay for equal work, has been a hotly debated topic for decades. Yet, here we are in 2023 and the same problem is still around. Why do women typically earn less than men? And why do some people work in the same roles but earn different amounts?

Canada’s pay equity laws aim to address these questions and ensure that all employees receive equal pay for work of the same or similar value, regardless of their age, gender, race and numerous other factors. But are these regulations going far enough (or fast enough) to tackle workplace inequality?

Despite the progress made by federal and provincial legislation and the rise in advocates and organizations for pay equity, there are still many wage biases to address. It’s essential that more business owners take action to promote fairness in the workplace.

What is Pay Equity?

Pay equity refers to the concept of ensuring that employees are paid equally for the same, or similar, job functions — irrespective of their gender, ethnicity, age or any characteristics that aren’t related to their job performance.

In companies with no pay equity policies in place, many employees face pay inequity which is a form of social discrimination. In other words, employees get paid different amounts for doing the same (or similar) work. With a lack of pay transparency across industries and workplaces, it’s difficult for workers to know if they’re being mistreated or underpaid.

For example: A 60-year-old employee might find out they are earning less than a 25-year-old employee who’s doing the same job at their company. This type of inequity can cause stress for the underpaid employee and decrease overall morale within a workplace.

It’s important for small business owners to understand both the federal and provincial laws around pay equity in the workplace. This will ensure that employees are being compensated fairly, and it reduces the risk of any potential legal action arising from wage biases.

Why is Pay Equity Important?

All employees have the right to be treated fairly, no matter who they are, where they’re from or how old they are. Pay equity is all about addressing the problem of pay discrimination and making sure everyone has access to the same opportunities.

The concept of pay equity is important to create a fairer society as a whole. And from a workplace perspective, it has several key benefits.

Social Benefits: More Even Distribution of Wealth

If employees aren’t paid fairly or equally for the jobs they do, they can struggle to meet their basic needs, such as paying for rent, providing for their families or saving for retirement.

Without the ability to earn on an equal footing as those doing the same job, this problem becomes an ongoing cycle of poverty that affects each new generation, putting many families further and further behind as time goes on.

Professional Benefits: Advantages for Businesses

Companies that build a reputation for promoting gender equality, social justice and workplace diversity tend to have employees that are happier, more productive and more motivated to perform at their best.

Pay equity can also increase staff loyalty, which reduces turnover and recruiting costs. This leads to a more positive workplace environment and increased job satisfaction for employees.

Many countries now have regulations in place to ensure employers address the issue of pay equity in their workplace — and globally there are many organizations working to promote the importance of equal pay for equal work.

Canada has introduced key pieces of legislation like the Pay Equity Act and Employee Equity Act that aim to address workers’ rights and move towards closing the gender pay gap.

The Current State of the Gender Pay Gap in Canada

Pay inequality has implications for the labour force and greater society on a global scale. It’s one of the main causes of gender-based poverty and debt for women. While there is growing publicity around this issue, it’s estimated that the worldwide gender pay gap will take 132 years to close if present trends continue.

The gender pay gap for full-time employees is $0.89. This means that women only make $0.89 for every $1 that men make. That gap gets even bigger when race, ethnicity and transgender differences enter the mix.

Statistics Canada

Many racialized populations in Canada, including Chinese, Koreans, Arabs and Filipinos have education levels well above the national average, but they may earn up to 16% less than their non-racialized colleagues.

The study also found that more men worked full-time (87%) compared to women (75.6%) and that 64% of management roles were held by men, compared to women at 35.6%.

So why is the gender pay gap still so glaringly obvious in 2023?

The main reasons include:

    • Occupational segregation — where one demographic group is either underrepresented or overrepresented in a job category
    • Women needing to balance work and childcare
    • Less women working in leadership roles and high-paid industries
    • Discrimination around hiring, promotions and salaries

Canada’s gender pay gap is higher than the median for Organization for Economic Co-operation and Development (OECD) countries, but the Pay Equity Act is a step in the right direction of taking this on.

Canada’s Pay Equity Act

The Pay Equity Act was passed in 2018 to establish a regime of “equal pay for work of equal value.” This legislation applies to federally regulated workplaces with 10 or more employees (e.g. banks, transportation companies and media broadcasting companies). These regulations came into effect in 2021.

Under this legislation Pay Equity employers are required to:

    • Establish and uphold pay equity practices in their workplace.
    • Establish a plan that determines the value of work performed by employees. The value of a role is decided based on skill, responsibility, effort and working conditions.
    • Regularly update and evaluate their pay and job evaluation plans.
    • Ensure female-dominated jobs are paid the same as male-dominated jobs of equal value.

This Act also established the role of a Pay Equity Commissioner, who is in charge of monitoring employers, resolving disputes and ensuring compliance. Employers who breach the conditions of the Act can face fines up to $50,000.

Provincial Pay Equity Legislation

The concept of “equal pay for work of equal value” is approached differently in many Canadian provinces, so if you’re a small business owner, you’ll want to do some digging to see what it means for your area and employees. For example:

    • Alberta is the only province in Canada that has no pay equity legislation. Each employer is responsible for ensuring non-discriminatory payment practices between genders under the Alberta Human Rights Act.
    • Under Ontario’s Pay Equity laws, the concept of pay equity is different from equal pay for equal work. In this province, “pay equity” compares the value and pay of jobs usually done by women with different jobs that are usually done by men (e.g. a plumber vs. a nurse). Employers are required to pay female workers at least the same as male workers if the jobs they do are of comparable value.

“Equal pay for equal work,” on the other hand, addresses the need for equal compensation when men and women do the same job.

What Are Some Barriers to Pay Equity in Canada?

While Canada has laws, advocates and organizations to address fairness of pay in the workplace, there are still a few barriers to achieving nationwide pay equity.

Occupational Segregation

Different industries still attract workers that have long-standing gender biases based around what men or women are considered “best” at. The old-fashioned ideas cause over- and under-representation of genders in certain fields.

Many still think of plumbers and electricians as typically male roles, while teachers, receptionists and nurses tend to be viewed more as feminine roles. Case in point, 91% of nurses in Canada are female.

Working towards gender parity will help create greater diversity in the workplace and reduce these outdated views around occupational segregation.

Wage Discrimination

Wage discrimination comes in many forms, resulting in people being paid less than their counterparts based on gender, religion, ethnicity and age. This form of discrimination can happen in any workplace but is especially prevalent in industries like tech, finance and transportation.

It’s important that employers are objective about hiring and wages and make sure that any personal biases they hold aren’t contributing to wage discrimination.

Non-Transparent Pay Structures

According to a 2022 study by Salary.com, only one in four workers say their employers are transparent about salaries, and half of these workers feel they aren’t being paid fairly compared to people doing the same job for other companies.

To improve pay transparency, employers can:

    • Undertake a pay equity audit in their business
    • Disclose salaries on job postings.
    • Promote diversity, inclusion and equity when making decisions around hiring and promotions

Discussing salaries has always been a taboo subject, but lifting the curtain around how much workers are paid will help Canada achieve social wage equity.

Summarizing Pay Equity

Pay equity aims to have all employees receive equal pay for work of equal value, regardless of their gender, age, religion or ethnicity. While Canada has taken steps to close these pay gaps, there are still ongoing barriers to overcome, such as occupational and wage segregation.

Wagepoint is an equal-opportunity employer, and we encourage our readers to take action in their workplaces and communities to help close pay gaps and create a more equitable, thriving society.

This article is authored by the Wagepoint Team and published on Wagepoint’s blog in July 2023.

How far are we from closing the wage gap? Share your thoughts on this matter in the comments below.


Should You Pay Employees with the On Demand Method? 10 HR and Payroll Professionals Weigh In

Written by Community Manager on . 2 Comments on Should You Pay Employees with the On Demand Method? 10 HR and Payroll Professionals Weigh In

The traditional bi-weekly or monthly pay cycle is becoming a thing of the past. Many companies now offer their employees the option of getting paid on demand – meaning they can receive their wages as soon as they earn them rather than waiting for the next scheduled payday.

However, this trend has sparked a debate among payroll and human resources professionals. While some argue that pay-on-demand is a valuable benefit that can improve employee satisfaction and reduce financial stress, others believe it can lead to financial instability and create administrative challenges for employers.

This is why we asked the members of the 17th Floor to share their take on this hot topic. While most share pros and cons, the cons outweigh the benefits. Read on to find out what these experts had to say.

[bondai_article_user user_id=”176″ description=”Pros: Being able to access your pay before payday when unexpected bills come up.Cons: Financial literacy in Canada is low. Employees may take out an excessive amount and not have enough funds come payday to pay bills like rent.”][bondai_article_user user_id=”496″ description=”Cons: There is the potential for employees to get into the habit of drawing on their pay early and putting themselves in a position where they can’t get ahead. And should there be a situation where an employee is on a ‘paid current’ pay cycle or leaves a company abruptly, it could result in an overpayment.”]

[bondai_article_user user_id=”1898″ description=”Pros: Convenience for the employee, improved employee morale/experience.

Cons: Scheduling issues for payroll staff (especially with the in-house payroll process), employee difficulty with managing prepayment (not having a paycheque on payday).”]
[bondai_article_user user_id=”96″ description=”Pros: Added flexibility and accommodation for staff.

Cons: The extra work to keep track of the requests and payroll adjustments, and extra payroll runs if you don’t have a payroll system to accommodate this automatically. Also, creating policies around such requests to ensure that all staff have equal opportunity to this option and it is handled the same way for everyone.”]
[bondai_article_user user_id=”2830″ description=”Pros: Looking at it from an employee perspective, if your pay for a week worked isn’t received until the following week, it can help when in a financial bind.

Cons: Extra work to keep the payroll schedule on track. Also, depending on the software used, you have to make sure your payroll dates coincide with the correct pay week.”]
[bondai_article_user user_id=”289″ description=”Pay on Demand can be a great thing, but it will only be successful if the employees are comfortable managing their financial accounts. As an employer, I would recommend the employer offer financial counselling before rolling out Pay on Demand.”]
[bondai_article_user user_id=”2818″ description=”Pros: Engaged employee retention as employees can meet their own individual financial demands.

Cons: How to calculate or claw back any pay adjustments reporting cut-offs?”]
[bondai_article_user user_id=”504″ description=”Pros: If a person’s credit card is full and money is needed, they could get that extra money.

Cons: Some employees will always demand their pay weekly or even more frequently and will not learn to budget—also, extra work for payroll to issue pay and to keep track of source deduction payments.”]
[bondai_article_user user_id=”2833″ description=”Pros: No accruals.

Cons: Oftentimes, when we have to rush a payment, errors are made at some point through the approval process. When a rush decision is required, we err on the side of caution and move to underpay, as recovering an overpayment can be quite difficult. Pay on Demand could garner an unearned amount until such time a recovery/repayment can be processed. Tracking recoveries from casual employees over long periods of irregular work could cause a lot of additional work.”]
[bondai_article_user user_id=”2844″ description=”Pros: Excellent feature as an employee can get the pay up to 80% of the work done and not have to wait.

Cons: From the admin point of view for the Payroll Administrator, it is difficult to keep track of large volumes, and if an employee leaves the organization and has not worked for the hours, then it is difficult to recoup it. Furthermore, an employee may ask for more advances as the cash is available every day, and they might overspend as cash is king.”]

Does your company offer Pay On Demand to its employees? Tell us what benefits and challenges you find with this payment modality.

10 Tips to Prepare for a Payroll Audit

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Getting ready for a payroll audit can be a daunting task. Federal and provincial/territorial governments have the authority to examine an organization’s records or conduct payroll audits at any time. Payroll practitioners need to ensure their organizations are compliant.

However, more than half of all business owners in Canada don’t know how to prepare for a payroll audit, but don’t worry, we’ve got you covered. Here are our top 10 insider tips to help ease payroll audit anxiety, developed by the National Payroll Institute.

1. You’ll Receive a Written Notice of Audit in Advance

There will be no surprise knock at your door. The government will notify you in writing if you are selected for a payroll audit. The written notice will include a proposed date and time of the audit and a listing of what documents you’ll be required to produce.

2. If the Proposed Time Doesn’t Work, You Can Reschedule

You can request that the auditor reschedule the payroll audit for a more appropriate time for you and your business (within reason).

3. Your Audit Notice Will Include a List of All the Information Your Auditor Expects to See

You’ll be given time to prepare and gather all requested documents. Sometimes, depending on the requested records, you might have to ask for additional time. For example, it may take longer to produce documents stored off-site or out of the country.

4. You Don’t Necessarily Have to Print the Documents

The auditor may want to see a lot of information, some of which will be in digital form or come from a third-party vendor (e.g. payroll software provider). Auditors can review digital as well as print documents and can even be given temporary access to third-party information.

5. You Should Ask the Auditor to Produce Their ID

Because the auditor is granted access to confidential information, you should ask them to officially identify themselves by producing valid identification. If they can’t present proper credentials, they should not be given access to your files.

6. It’s up to You to Determine Your Key Stakeholders

You are responsible for identifying the person or persons best equipped to participate in the payroll audit. The auditor will delve into the payroll and accounting information, so everyone you identify as a critical stakeholder in the audit should be prepared to speak to the information at hand.

7. The Auditor Will Likely Pinpoint Certain Issues They Want to Focus On

The auditor will likely take a deep dive into key issues they have identified as priorities. The National Payroll Institute shares a Payroll Audit Best Practices Guidelines, so you can prepare in advance.

8. At the End of the Audit, You Will Be Given a Written Recommendation Report

The report will likely contain one or more of the following outcomes:

    • No assessment needed (compliant audit)
    • Notice of over-remittance (they owe you money)
    • Notice of outstanding payments (you owe them money)
    • Penalties or fines applied
9. If You Are Non-Compliant, You Can Be Given Time to Fix Your Errors

Even the most well-intentioned employers may be found non-compliant during an audit. Depending upon the severity of the infringement, the auditor will likely allow you to fix any issues without incurring penalties.

10. You Can Appeal the Auditor’s Ruling

If you disagree with the auditor’s ruling, you have the option to appeal (usually within 90 days).

Have you ever had a payroll audit? Share your experience in the comments to prepare other colleagues.

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Employee Recognition Under the Lens: When Can Employee Benefits Become Taxable?

Written by Community Manager on . 1 Comment on Employee Recognition Under the Lens: When Can Employee Benefits Become Taxable?

Employee recognition programs can become taxable benefits. Generally, the taxability of an employee benefit or recognition depends on its nature, value, and frequency. For example, cash rewards and gift cards are taxable as income, while non-cash rewards may be exempt from taxation. Additionally, if the value of the reward exceeds a certain threshold, it may trigger tax withholding requirements.

On the other hand, the frequency of the rewards also matters. If given too regularly, they may be considered part of the employee’s regular compensation and therefore be subject to taxation.

What Is Considered an Employee Benefit by the CRA?

According to the CRA, a benefit is a good or service you give or arrange for a third party to give your employee, such as free use of property you own. A benefit includes an allowance or reimbursing an employee’s personal expenses. Benefits can be divided into three categories: cash, near-cash, and non-cash.

Cash: This includes physical currency, cheques and direct deposits.

Near-cash: A near-cash benefit functions as cash or something that can easily be converted to cash, such as a security, stock, or gold nugget.

Non-cash: A non-cash (or “in kind”) benefit is the actual good, service, or property that you give to your employee. This includes a payment you make to a third party for the particular good or service if you are responsible for the expense.

Check the complete list of benefits and determine their value for taxation here.

When Can Employee Benefits Become Taxable?

According to the CRA, in general, gifts, awards and long-service awards employers provide to employees are taxable.

Gifts: A gift has to be for a special occasion such as a religious holiday, a birthday, a wedding, or the birth of a child.

Awards: An award must be for an employment-related accomplishment such as outstanding service or employee suggestions. It is recognition of an employee’s overall contribution to the workplace, not recognition of job performance. Generally, a valid, non-taxable award has clearly defined criteria, a nomination and evaluation process, and a limited number of recipients.

Rewards: A reward is provided to your employees for performance-related reasons and is a taxable benefit for the employee.

How to Calculate the Value of the Employee Benefit and How to Report It?

If the benefit is taxable, the value of the benefit is equal to the combined total fair market value (FMV) of the gifts and awards provided in the year. Where CRA’s policy on non-cash gifts and awards policy applies, only amounts over the $500 limit must be included in the employee’s income. For example, if the employer provides gifts and awards with a total value of $650, there is a taxable benefit of $150 ($650 – $500).

Employers must report taxable employee benefits on the T4 slip. Non-cash and near-cash benefits must be reported on the following:

    • Box 14 – Employment Income
    • Box 26 – CPP/QPP pensionable earnings
    • Code 40 – Other Information

On the other hand, cash benefits should be reported on:

    • Box 14 – Employment Income
    • Box 24 – EI insurable earnings
    • Box 26 – CPP/QPP pensionable earnings
  • Code 40 – Other Information

Overall, employers need to structure their recognition programs in compliance with Canadian tax laws to avoid any unexpected tax liabilities for themselves or their employees. It’s always a good idea to consult with a benefits specialist for guidance on how to structure these programs. Visit the 17th Floor’s Members Directory to find one and grow your network.


[bondai_article_user user_id=”310″ description=”Josh is a Benefits Specialist at Gallagher Canada. Connect with him!”]
[bondai_article_user user_id=”289″ description=”Kathryn has extensive world-wide knowledge in HR, Payroll, Benefits, Insurance and Equity Programs. Connect with her!”]

Does your company offer near-cash or non-cash employee benefits? Share some examples in the comments section below.

Sources:


9 of 10 Job Applicants Want to Know the Salary Before Applying

Written by Community Manager on . 1 Comment on 9 of 10 Job Applicants Want to Know the Salary Before Applying

With the current tight labour market, HR professionals are constantly looking for the best ways to attract talent and ensure an efficient recruitment process. One factor that job seekers are increasingly considering when deciding whether to apply for a position is the salary and benefits package available. Two recent surveys, one from the US and the other from France, showed similar results revealing that almost 9 out of 10 job applicants want to know the salary before applying for a job.

While the American study showed that “85% of upcoming and recent grads say they’re less likely to apply for a job if the company does not disclose the salary range in the job posting”, the French report revealed that 87% of job applicants want to know the wage before applying. However, it is disclosed by the recruiters only 30% of the time.

See other discrepancies between what job applicants are looking for and what information is being shared by recruiters with the infographic below!

As data shows, it is important to remember that salary information is crucial for job seekers when applying for a job. Employers must consider this factor and be open and transparent about salary details. Doing so can help attract the best candidates and ensure a successful outcome.

Do you think disclosing the salary in job postings will help attract the right applicants? Yes or no? Let us know in the comments below!