By Joanna Kim-Brunetti | August 31, 2021

The Canada Pay Equity Act goes into effect today, August 31, 2021, marking the official commencement of a major international move to advance workplace equality.

The Act has been highly anticipated since its original passage in 2018. Now that the law is in full force, affected employers must develop and implement pay equity plans that address systemic gender-based discrimination in their workplaces.

We’ve previously taken a deeper dive into examining the Act and its requirements. Below we’ve outlined a recap on the law and how it may signal potential legislative changes in the U.S..

The Canada Pay Equity Act in a nutshell

The Canada Pay Equity Act applies to federally regulated employers in public and private sectors with 10 or more employees.

An integral piece of the Act requires that employers draft and post pay equity plans for the purpose of identifying and resolving gender wage gaps. The plans must follow a strict set of criteria, which obliges organizations to: identify job classes; determine if gender predominance exists in those job classes; evaluate work; calculate compensation; and compare compensation.

Upon completion of the above tasks, employers must increase compensation for the predominantly female job classes that are comparatively underpaid within three to five years of the law’s effective date.

As further means of accountability, employers must also provide employees an opportunity to comment on draft plans and take that feedback into consideration. They have three years to implement their plans.

Employers with 100 or more employees (and employers with 10 to 99 employees if some or all employees are unionized)  must also establish a representative pay equity committee. The committee is responsible for developing the pay equity plan, as well as reviewing and updating it every five years.

Employers that do not comply with the Act are subject to penalties. Violations could cost an organization between $30,000 to $50,000, as imposed by the Canada Pay Equity Commissioner.

Pay equity trend picks up speed, at home and abroad

Canada’s pay equity law may be a breakthrough in today’s world, but such legislation is shaping up to be standard in the world of tomorrow. As other recent efforts in the U.S. and abroad show, the workplace equality trend isn’t going away any time soon – in fact, it’s picking up speed. Rhode Island and Colorado are among the wave of states working to close the gender and racial pay gap. The issue has even made its way to Congress, which contemplated the idea of passing federal pay equity legislation last spring.

The Canada Pay Equity Act’s continuous improvement model and a societal shift toward progress are examples that performative measures won’t be enough for organizations when it comes to confronting systemic discrimination. Change must be authentic and forward moving. Ongoing accountability and maintenance are critical factors in advancing effective diversity, equity, and inclusion (DEI) goals.

Employers can get ahead of the curve by implementing a pay equity program within their organizations and conducting a pay equity audit. Ongoing pay equity analytics and DEI monitoring are key features of our PayParity solution, which provides DEI consulting services and pay equity software employers need to be proactive. PayParity addresses pay disparities at the intersection of race and gender, allowing employers to narrow in on the root-causes for perpetuating wage discrimination. 

To learn more about how to meet your organization’s DEI goals, download our white paper Designing a Successful Pay Equity for Your Organization.

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.

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Source: Trusaic

https://trusaic.com/blog/canada-pay-equity-act-takes-effect-today/?utm_campaign=IW&utm_medium=email&_hsenc=p2ANqtz-87wm5S4p4aZXYAXbbivrf9-KzYE6k7D8b6CxmPLaHl8ryoHHCare3qKX2LsH4LlzWSX4LPA9w9f18Wpv_gnKrWpNGZRJYGrauHAwcsjioARnYDIig&_hsmi=154271496&utm_content=154271496&utm_source=hs_email&hsCtaTracking=9156a467-9829-4e4e-915c-e959096ba2d7%7C99b23ad3-f39c-42f4-8d15-d0b69eebfd08

By Mary Schlangenstein | August 25, 2021

Delta Air Lines Inc. will impose a $200 monthly surcharge on employees who aren’t vaccinated against Covid-19, becoming the first major U.S. company to levy a penalty to encourage workers to get protected.

The new policy was outlined in a memo from Chief Executive Officer Ed Bastian, who said 75% of the carrier’s workers already are vaccinated. Increasing cases of coronavirus linked to a “very aggressive” variant are driving the push for all employees to get the shots, he said in the note to employees Wednesday.

The fee applies to employees in the airline’s health-care plan who haven’t received shots by Nov. 1. The company also will require weekly testing for employees who aren’t vaccinated by mid-September.

Delta stopped short of a mandatory vaccine requirement like the one imposed earlier this month by United Airlines Holdings Inc. and other companies. Goldman Sachs Group Inc., Alphabet Inc.’s Google and Facebook Inc. also have announced vaccine requirements.

Delta is confident that its approach will succeed in moving its worker vaccination rate beyond 75%, a spokesman said when asked why the company didn’t impose a mandate. The potential penalty is “well within” legal parameters, he said. 

While vaccine requirements have increased since Pfizer Inc. and BioNTech SE’s vaccine received full Food and Drug Administration approval on Monday, employers are treading carefully for fear they’ll hurt morale and spur defections in a tight labor market. Some consultants doubt that surcharges will be as persuasive as demanding inoculation, though the size of Delta’s surcharge could change that calculus.

“Vaccine hesitant employees are likely to see this as a mandate or a punitive measure, as it creates an additional annual cost of $2,400 for that employee,” said Brian Kropp, chief of human-resources research for the Gartner consulting firm. 

The fee for unvaccinated employees is “to address the financial risk” from their decision, Bastian said. The average hospital stay for Covid-19 patients has cost Delta $50,000 each, he said.

“With this week’s announcement that the FDA has granted full approval for the Pfizer vaccine, the time for you to get vaccinated is now,” Bastian said.

American Airlines Group Inc. and Southwest Airlines Co. continue to encourage employees to be vaccinated but haven’t imposed mandates.

Delta was the best performer on the S&P 500 Airlines Index, rising 1.9% to $41.30 at 2:09 p.m. in New York. 

In May, Delta became the first major U.S. airline to require coronavirus shots for new employees. The airline had agreed not to mandate vaccinations for its pilots, the only major work group represented by a union, until at least Nov. 21. The pact also provided incentives for pilots to be vaccinated.

Delta would have to negotiate a new agreement “over any employer-mandated vaccination for pilots,” the Air Line Pilots Association said in a statement. Union leadership “has consistently advocated to maintain the right of each individual pilot to consult with his or her medical provider regarding Covid-19 vaccinations or booster doses.”

Under the policy announced Wednesday, any worker not fully vaccinated by Sept. 12 will be required to take a weekly coronavirus test “while community case rates are high,” Bastian’s memo said. 

Employees who aren’t vaccinated must wear masks in all indoor settings, effective immediately. Delta also said that starting Sept. 30, the airline would preserve full pay for workers who have received both shots but who still get sick and may end up on short-term disability.

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Source: Bloomberg

https://www.bloomberg.com/news/articles/2021-08-25/delta-air-lines-to-impose-surcharge-on-unvaccinated-employees

PwC US Pulse Survey: Next in work

At a pivotal moment for the future of work, companies can help their businesses and employees thrive

Employees have had more than a year to reflect on their needs and aspirations, and many want a new model of work. Our latest US Pulse Survey found that 65% of employees are looking for a new job. We also talked to executives, 88% of whom told us they are seeing higher turnover than normal. 

For the most part, executives have a good grasp on why their employees are looking elsewhere. But when it comes to offering incentives that employees want most, they’re falling short in two key areas: benefits and comp. This employer-employee tension compounds the challenge facing companies eager to redesign work. Rising inflation, the surging delta variant and tension over vaccines, masks and shifting return-to-work plans are creating extra uncertainty.

How can executives balance their strategic and operational goals with shifting employee expectations? Companies have a tremendous opportunity to transform work. By redesigning work, you can help drive growth, better anticipate uncertainty and create a workplace that top talent is eager to join. To successfully execute your plans, you’ll need to figure out your hybrid work model, make changes to processes and operating models, revamp strategic planning and, most importantly, attract and retain top talent.

Our survey offers insights into the changes executives are making as they redesign work and how they are centering many of those decisions around people.

To continue reading, please go to:

https://www.pwc.com/us/en/library/pulse-survey/future-of-work.html

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Source: PricewaterhouseCoopers (PwC)

New York-based Moog went into "survival mode," said Kristine Karnath, so the 70-year-old firm sought to plug up gaps in its support system for workers.

Published Aug. 19, 2021 by Ryan Golden

When a global crisis strikes, even the most firmly rooted organizations may need to pause and re-evaluate.

New York-based aerospace and industrial manufacturer Moog recently celebrated its 70th year in business. Since its founding, the company has sought to sustain a culture in which employees can easily collaborate, be creative and have autonomy without the pressures of bureaucracy or hierarchy, according to Kristine Karnath, Moog's U.S. director of benefits. That culture, she added, influences how Moog makes benefits decisions.

But COVID-19 put the company into "survival mode," Karnath said during an Aug. 11 presentation as part of the Disability Management Employer Coalition's 2021 virtual annual conference. When its clients in the commercial airline industry suffered financial losses, Moog's leaders knew it had to adjust.

"The last thing we wanted to do was have a layoff or a furlough," Karnath said. "We were able to maintain everything that we had pre-pandemic and continue that moving forward, but we started to look at what do we need to change."

Moog realized it was entering a new world, and it sought a benefits strategy that could adapt to the changes brought on by the pandemic, Karnath said. One example was a telemedicine platform that Moog worked to ensure was "completely accessible" to employees; it also added behavioral health support to the platform after seeing utilization spike.

Prior to the pandemic, the company also had offered on-site medical centers and fitness classes, and it transitioned those services to a virtual format. It added mental health and physical wellness holidays to its schedule after realizing it had gaps in its holiday schedule and observing that, despite having an unlimited vacation policy, staff were not taking days off.

"We wanted specifically to have it be holidays where the entire business was shut down so that people didn't feel the pressure to work," Karnath said. "We wanted those days where we kind of forced people to take that time off and to recoup a bit."

Moog also realized it lacked benefits to support caregivers as employees began taking care of children at home during the work day. It added a program to address that need, Karnath said.

Remote work creates two groups of employees

Few Moog employees were remote prior to the pandemic, Karnath said. But with the need to send some to work from home came the division of its U.S. employees essentially into two groups. That proved a challenge, in part, because the company traditionally maintained a similar benefits package across the board for all employees, she explained.

"Our on-site employees looked at our employees at home and thought, ‘well they're on permanent vacation, they're not working, they're watching TV,'" Karnath said. "We also knew that our employees at home were dealing with different situations … they were a parent, a teacher, a caregiver; they had multiple roles they were now playing and trying to balance all of that."

Some on-site employees wanted hazard pay, but Moog pushed back. "We didn't feel that it was appropriate to pay those employees hazard pay because we were doing everything we possibly could to keep those employees safe," Karnath said. "If we paid hazard pay, we felt that that was saying, ‘you are in a hazardous situation, we're not doing everything we can, so we're going to pay you additional.'"

Similarly, Moog did not want to recognize one group of employees without recognizing the other, Karnath said. Ultimately, it decided to focus on the particular issues both groups faced. It offered short-term disability coverage to those with medical conditions that put them at risk of contracting COVID-19. It offered paid leave to employees with immunocompromised persons at home and continued to offer unpaid leave with full benefits and the promise of returning to their job after the end of the period of paid leave.

For virtual workers, Moog asked managers to shorten meetings times from 60-minute windows to 50-minute windows to give employees the ability to take care of tasks outside of work. "There's nothing magical about that last 10 minutes," Karnath said. "We knew that people at home needed time. You can't tell your kids to wait eight hours so that you can help them."

Toeing the line on communications

Keeping an apolitical, fact-based approach is important when relaying information about COVID-19 safety to employees, Karnath said. Moog put forth branded messaging to employees about the virus, vaccines, policies and other topics such as staying active during quarantine. At times, that messaging would occur three to four times per week.

"When we communicated information, we knew we needed to keep the politics out of it as well," Karnath said. "Any area we thought employees might be questioning, nervous about or anxious about, we wanted to make sure that we were addressing that."

In 2019, Moog decided it would focus on mental health and well-being throughout 2020. It kept this plan moving into the pandemic, Karnath said, tailoring specific mental health topics to particular months. February saw a focus on building relationships, while August dealt with community service and November with financial wellness.

"We wanted people to see that mental well-being wasn't just about depression, anxiety or a diagnosable condition," Karnath said, "we wanted them to see it was about everyday life."

However, the company realized it needed to build on those efforts even further, she added. "We were being bombarded with so much information, so many emotions, that there were a lot of people who didn't even recognize that they were feeling anxious, they were depressed," Karnath said. In addition to the use of telehealth benefits and employee assistance programs, Moog trained managers to recognize mental health issues in their reports and point them toward available resources.

Along those same lines, Moog encouraged managers to be vulnerable and open up to their teams about their struggles. Within her own team, Karnath talked about times when she had trouble focusing on work. "Our conversations really changed once I started sharing that," she said. "There was this feeling that I don't need to be that A-plus employee. I can admit that I'm having a hard time here, and that's okay. And they also knew that it was a safe place to do that."

Going forward, Karnath said Moog needs to continue to adapt to employees' needs as expectations around work change. She added that the organization's focus on transparency and trust has helped manage its culture during a turbulent time.

"We have some managers who think when this is all over we're just going to go back to 2019 and everything is just going to go back to the way that it was," Karnath said. "We know as an organization that's not true. The world has changed."

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Source: HR Dive

https://www.hrdive.com/news/how-the-pandemic-forced-one-manufacturer-back-to-benefits-basics/605260/

Among other things, more flex time, work-from-anywhere periods, and continuing stipends for home offices

By Suman Bhattacharyya

Aug. 14, 2021 

With the coming of the hybrid workplace, employee benefits are being put under the microscope. And many companies are realizing that the current crop of benefits may not make as much sense as they used to.

“A lot of employers are re-evaluating their benefits propositions,‘’ says Lauren Mason, a principal at Mercer, a management-consulting firm. “Employee values have shifted quite significantly because of the stressors of the pandemic and around child care and other concerns, as well as just re-evaluating life circumstances.”

For many companies, this means expanding some benefits while making others less of a priority. In a Care.com survey of 500 human-resource executives in the U.S. conducted in December 2020 and January 2021, 66% said they plan to offer more flexibility, with 63% planning to increase child-care benefits and 41% planning to expand senior-care offerings. At the same time, some benefits that were important pre-Covid, including commuter benefits, on-site meals and on-site child care, are becoming less important, the survey found.

Here’s a closer look at how companies and HR experts expect benefits to change in a world transformed by the pandemic:

Flexible time off that employees can take when they need.

One lesson companies learned from the pandemic is that people often work best when they feel they have more control over their hours, tailored to their specific life needs at the moment. It’s best to focus on output, many HR executives say, rather than time spent working.

One result is that the notion of flexible time off where there are no formal limits, and employees simply take time off when they feel they need it—is one policy that experts say has become more popular, and will become even more so in the years ahead. According to Mercer surveys, the percentage of employers offering such “unlimited paid time off” to at least some employees rose to 20% this year from 14% in 2015.

Fair Isaac Corp. FICO -0.48% , a data-analytics software firm, rolled out a nonaccrual-based vacation policy this year for most of its U.S. employees. “Traditional vacation policies assume that you earn it and then you use it on sort of a 9-to-5, Monday-through-Friday kind of basis. It was just an outdated concept,” says Rich Deal, executive vice president and chief human-resources officer at Fair Isaac. He says the company started a “much more fluid policy that’s trust-based. It doesn’t put accrual limits and usage limits around it, and that acknowledges that work can happen at any time of the day.”

Under flexible vacation policies, managers still have to approve time-off requests, and employees will still be held accountable for poor performance due to extended leave periods. “If you take so much time off that you don’t perform, that’s a performance issue and you can lose your job,” says Iain Urquhart, senior vice president of Americas at Barco, BAR 0.20% a Belgium-based visualization-technology company that moved to a flexible vacation policy in July.

Fewer sick days but more ‘home leave’ days.

The Covid pandemic highlighted the importance of working around schedules and needs, including circumstances when an employee may be feeling slightly ill but can still contribute a portion of their workload. Nicholas Bloom, an economics professor at Stanford University who studies remote work, calls this “home leave.”

Dr. Bloom says a company might give workers 10 extra days of home leave a year, beyond the work-from-home days allowed. In return, he says, the employee might take, perhaps, two fewer of their allotted sick days.

“Sick leave is when you really don’t work, but with home leave, for all intents and purposes, you’re working,” he says. “It’s far less costly. If you think of sick leave, you may get zero output, but with home leave, you may get 80%.”

Work-from-anywhere periods.

If the pandemic taught companies anything, it was that employees relish the opportunity to work for extended periods outside the office.

Revolut, a London-based financial-technology company, this year increased allocated work-from-abroad time for its employees to a maximum of 60 days from 29 days, in response to employee surveys.

“Creating this policy was clearly motivated by last year’s experience, and it represents what we felt could be beneficial and appreciated by a young, global workforce like ours,” says Jim MacDougall, the company’s vice president of people. Mr. MacDougall says the company will monitor employee feedback, and then decide whether to make it a continuing benefit.

Alphabet Inc.’s GOOG +0.49% Google also has expanded its work-from-anywhere allocations for employees, from two weeks to four weeks. And business-information services company Thomson Reuters TRI -1.42% says it’s set to unveil a new leave approach in the coming months that will incorporate work-from-anywhere benefits.

“The pandemic has accelerated people’s focus on how they want to live their lives and how work can fit into their ideal life, and work from anywhere—flexible work, primarily—gives them more opportunity to do that,” says Mary Alice Vuicic, the company’s chief people officer.

Continuing stipends for home offices.

According to a survey of more than 3,600 world-wide employees carried out by Gartner Inc. within the past year, 71% said they feel their employer should help cover home-office expenses while they are asked to work remotely, though only 44% of employees reported that their organizations covered home-office expenses for some or all employees.

Bluecore, a New York marketing-technology company, says it’s going to continue offering its employees a $200 monthly stipend, with wide latitude on how it is spent. “It could be for health and well-being, like the Calm app, or workout equipment, or if you need more office type of stuff, you can use it relative to however it makes you productive,” says Michelle McComb, chief financial officer at Bluecore.

Expanded discounted services for employees.

Experts expect companies to offer employees more deals based on discounted rates companies negotiate with third-party vendors. Mercer’s surveys found that almost a quarter of all employers with 500 or more employees say they will add or expand such voluntary benefit offerings in 2021.

Two areas that were of particular importance to employees during the pandemic: pet insurance (for all those dogs and cats adopted during lockdown) and identity-theft protection (as a result of employees using their work computers for personal activities while working from home).

A recent study from Willis Towers Watson, a consulting firm, found that 47% of employers surveyed offered pet insurance, with 69% saying they would offer it by 2022 or beyond. The study found that 53% of employers currently offer identity-theft protection, with 78% planning to offer it by 2022 or later.

Benefits that will aim to translate in-office perks for hybrid work environments.

Before the pandemic, many offices offered in-office catering, on-site gyms and other perks to attract employees. In a hybrid context, companies are exploring how to offer similar benefits for employees who are working remotely, in part through delivery and subscription and digital services.

A survey by Willis Towers Watson found that 80% of employers were planning to increase perks this year. It further found that most employers suspended on-site perks, such as food, gyms, fitness classes and social events, and instead offered virtual perks, such as access to health and wellness apps and telehealth.

Infragistics, a user-experience technology company based in Cranbury, N.J., offered on-site cooked meals to its employees before the pandemic. The company, which plans to reopen its Cranbury office this fall, will have a hybrid workforce. So while it’s planning to bring the chefs back to the office, it also is trying to figure out how to offer some of the food benefits to employees working at home.

“It probably wouldn’t be meals, but fruits and stuff like that, but we don’t have anything official yet,” says Dean Guida, the company’s CEO.

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Source: The Wall Street Journal

https://www.wsj.com/articles/employee-benefits-hybrid-workplace-11628796247

Only 3% of employers freezing salaries

ARLINGTON, VA, July 20, 2021 — Pay raises are making a comeback. U.S. companies plan to give employees larger raises next year as they recover from the economic fallout from the pandemic and face mounting challenges attracting and retaining employees, according to a new survey by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. The survey also found employers are continuing to recognize their high performers with significantly larger raises.

The 2021 General Industry Salary Budget Survey found only 3% of companies are not planning to boost salaries next year, a drop from 8% that didn’t give raises this year. Notably, raises are returning to pre-pandemic levels. According to the survey, companies project average salary increases of 3.0% for executives, management and professional employees, and support staff in 2022. This is up from the average 2.7% increases companies granted this year. Production and manual labor employees are in line to receive average increases of 2.8% next year, higher than the average 2.5% increases this year. Salary increases hovered around 3.0% for the past decade until the pandemic forced companies to trim budgets. The larger raises coincide with a surge in demand for labor and a shortage of supply of hourly workers and specific professional roles with premium skills.

Among the major industry groups, high-tech and pharmaceutical companies project the largest increases (3.1%) followed by health care, media and financial services companies (3.0%). Oil and gas industry companies, as well as leisure and hospitality industry companies, are budgeting significantly lower salary increases for employees (2.4%). Retail industry companies are projecting average raises of 2.9% next year.

“Companies are between a rock and a hard place when it comes to compensation planning,” said Catherine Hartmann, North America Rewards practice leader at Willis Towers Watson. “On the one hand, employers need to continue effectively managing fixed costs as they rebound from the pandemic. On the other hand, companies recognize they need to boost compensation with sign-on, referral and retention bonuses; skill premiums; midyear adjustments; or pay raises. Or they can utilize all of these options, especially with millions of Americans quitting their jobs, changing careers or postponing looking for employment.”

Top performers continue to receive larger raises

The survey found companies continue to reward top performers with significantly larger pay raises than average-performing employees. Management and professional employees receiving the highest possible performance rating were granted an average increase of 4.5% this year, 73% higher than the 2.6% increases granted to those receiving average ratings. This trend continued for support staff and hourly workers who received the highest ratings.

The survey also revealed over nine in 10 companies (91%) awarded annual performance bonuses this year based on 2020 performance, significantly higher than 76% of companies that awarded them last year. Bonuses, which are generally tied to company and employee performance goals, averaged 16.0% of salary for management and professional employees. Bonuses for support staff and production and manual labor employees averaged 8.0% and 5.5%, respectively.

“Attracting and retaining employees remains a major challenge for employers. In fact, the current environment makes these challenges even more difficult. Employers need to deliver a sound employee value proposition supported by comprehensive Total Rewards programs. Beyond competitive salaries, which are table stakes at the moment, companies also need to focus their spend on a diverse set of health, wealth and career programs to drive employee engagement,” said Hartmann.

About the survey

The 2021 General Industry Salary Budget Survey was conducted by Willis Towers Watson Data Services between April and June 2021. A total of 1,220 companies representing a cross section of industries participated. The report provides data on actual salary budget increase percentages for the past and current years, along with projected increases for next year.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.

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Source: Willis Towers Watson plc.

https://www.willistowerswatson.com/en-US/News/2021/07/us-employers-planning-larger-pay-raises-for-2022-willis-towers-watson-survey-finds

By Robert Sheen | July 29, 2021

Canada is making strides to close the gender wage gap with the adoption of its historic Pay Equity Act. Originally passed in December 2018, the Act goes into full effect August 31, 2021.

The Canada Pay Equity Act aims to address systemic gender-based discrimination, foster equal compensation for work of equal value, and proactively maintain pay equity going forward. To achieve these goals, the Act requires federal employers to establish a pay equity plan through a rigorous process, then create a pay equity committee to develop, execute, and maintain said plan.

Below we’ve outlined what employers need to know about designing a pay equity plan, how to create a pay equity committee, who the Act applies to and why organizations in the U.S. should start preparing now.

Impacted organizations

The Canada Pay Equity Act applies to federally regulated organizations in public and private sectors. Certain distinctions apply to organizations based on the total number of employees in their workforce and whether they are unionized:

• Employers with 10 or more employees must establish a pay equity plan
• Employers with 100 or more employees must additionally establish a pay equity committee
• Employers with 10-99 employees must establish a pay equity committee if any of the employees are unionized
• Employers with 10-99 non-unionized employees may voluntarily establish a pay equity committee, but are not required to do so

Establish a pay equity plan

Pay equity plans are intended to identify and remedy pay disparities based on gender. The Act requires employers pay equity plans to include the following:

• Identification of job classes
• Determination of predominantly female and predominantly male job classes
• Determination of value of work
• Calculation of compensation
• Comparison of compensation

Notably, the Act broadly defines “compensation” to include salaries, commissions, bonuses, and paid time off; in-kind payments; employer contributions to retirement, long-term disability, and health insurance plans; and any other “advantage” received directly or indirectly from the employer. 

Create a pay equity committee

The Canada Pay Equity Act requires employers to form representative pay equity committees that will develop, execute, and maintain the pay equity plans. Specifically, “At least two-thirds of the members must represent the employees to whom the pay equity plan relates.” There are other stipulations for establishing membership – for example, women should compose at least 50% of the pay equity committee.

Pay equity committees will be responsible for reviewing and updating pay equity plans at least once every five years.

Built-in accountability

The work doesn’t end with establishing pay equity plans and committees. The Act includes measures for accountability and maintenance to allow for continuous improvement. These measures require employers to:

• Post a draft pay equity plan, with an opportunity for employees to comment (Employee feedback must be taken into consideration.)
• Implement the pay equity plan within three years
• Increase compensation for the predominantly female job classes that are comparatively underpaid
• Maintain pay equity and review the pay equity plan at least once every five years
• Provide certain information/notices to their pay equity committee, employees, and the Pay Equity Commissioner

Pay Equity Act non-compliance

The Act penalizes employers that fail to comply. Specifically, Canada’s Pay Equity Commissioner is responsible for enforcing the Act and may impose penalties between $30,000 to $50,000 for violations.

International efforts foreshadow changes to U.S. legislation

Canada’s recent action to confront systemic gender-based discrimination may herald change in the U.S. and other countries throughout the world.

Equal pay is already rising as a top concern in both American legislative board rooms and employee break rooms alike. Last spring, Congress reviewed policies aimed at resolving pay disparities for protected classes. The heads of U.S. labor and employment organizations, including the chair of the Equal Employment Opportunity Commission (EEOC) and the director of the Office of Federal Contractors Compliance Programs (OFCCP), are also making pay equity a focus.

A diversity, equity, and inclusion (DEI) lens is integral to building a good workplace culture and a reputation as a forward-thinking employer. Simply put, organizations that demonstrate a commitment to DEI aren’t only doing the right thing – they’re also bolstering recruitment efforts and attracting investors.  

One of the Canada Pay Equity Act’s most prominent focuses is to close the gender wage. Through proactive pay equity measures, U.S. employers too can close the gap and promote workplace equality. With new federal regulations on the horizon, U.S. organizations that approach the social good on their own are setting themselves up for greater success. Best practices include undergoing a comprehensive pay equity audit now. To get started, download our white paper Designing a Successful Pay Equity Program.

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.

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Source: Trusaic

https://trusaic.com/blog/canada-pay-equity-act-tackles-gender-wage-gap/

By Robert Sheen | August 3, 2021

In an effort to address the pay disparity between men and women, the President of Ireland signed the Gender Pay Gap Information Act 2021 into law on Jul. 13, 2021.

The Gender Pay Gap Information Bill amends the Employment Equality Act 1998 and requires gender pay gap reporting from certain Irish employers. The Act’s goal is to promote pay transparency by requiring certain Irish employers to report and publish information about gender pay gaps within their organizations. It also holds employers accountable by requiring them to explain gaps and what action they’re taking to eliminate or reduce identified wage gaps.

Below we have outlined this latest international effort to advance pay transparency and what it could mean for the future of the U.S.

What are the reporting requirements?

The Act provides that the Minister for Children, Equality, Disability, Integration, and Youth establish regulations as soon as “reasonably practicable” mandating employers to publish a variety of information about the compensation of their employees, including:

• Mean and median hourly compensation for full-time and part-time male and female employees
• Mean and median bonus compensation of male and female employees
• Percentage of all employees who have received a bonus or benefits

Employers will also be required to explain why gender pay gaps exist and the actions they’re taking to rectify them.

It’s important to note the Act draws a distinction between the “gender pay gap” and “equal pay for equal work.” While equal pay for equal work has long been codified into Irish law, the new regulations are specific to gender pay gaps, which are defined as the difference in the average hourly wage of men and women across a workforce. Gender pay gaps don’t necessarily mean discrimination is present – but the new reporting system will illuminate where discrimination does exist and require employers to take action to resolve it.

In addition to reporting requirements, the regulations may determine:

• The class of employer, employee, and pay to which the regulations apply
• How the number of employees and pay is to be calculated
• The form and manner in which information is to be published, along with the frequency of publication (which will not be required more than once per year)

Which organizations are impacted?

Private and public sector employers will be affected with the following requirements:

• Initially, the legislation will only apply to companies with 250+ employees
• Two years after the start of the Act, the act will expand to include organizations with 150+ employees
• Three years after the start of the Act, organizations with 50+ employees will need to comply
• At this time, organizations with less than 50 employees are exempt from the Act’s reporting and disclosure requirements

When does the law take effect?

While the law is expected to be fully enacted at the end of this year, the reporting process is expected to begin in 2022.

How will the law be enforced?

The Workplace Relations Commission will investigate complaints and follow up with employers accordingly to enforce pay equity in Ireland. Additionally, if “reasonable grounds” are present, the Irish Human Rights And Equality Commission may file an order with the Circuit Court or High Court that would require an employer in question to comply.

What does this mean for U.S. employers?

Ireland’s action to amend pay equity legislation is reflective of movements gaining traction around the globe. Canada’s recent passage of its Pay Equity Act is yet another effort aimed at confronting systemic gender-based discrimination. Local efforts to close the gap are also cropping up across the U.S., and federal legislation seems imminent. Already, states like California, Illinois, Rhode Island, and Oregon have passed legislation requiring employers to achieve pay equity through similar transparency efforts. Congress is also actively working to pass legislation to bolster the federal Equal Pay Act.

U.S. employers should get ahead of the curve by implementing a pay equity policy now. A focus on pay equity isn’t the ethos of the future – it’s already here. To get started, download our white paper Designing a Successful Pay Equity Policy for Your Organization.

We’re here to help employers take a proactive approach to achieve pay equity in their organizations. Our PayParity Solution provides auditing and ongoing monitoring to help your organization get ahead and minimize risk.

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.

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Source: Trusaic

https://trusaic.com/blog/canada-pay-equity-act-tackles-gender-wage-gap/

ADVISOR BLOG

 

 AS PUBLISHED IN WORKSPAN WEEKLY

 

 JULY 2021

COVID-19 and the ensuing pandemic produced the largest global economic shock and business transformation period of our lifetimes. And while there were some companies that benefitted from the situation, for many others, the virus painfully exposed material weaknesses in their business.

We’ve experienced wholesale changes in how work gets done. For workers who could, there was a  pivot to working from home. (In fact, a recent survey found that the work from home model may become more permanent for many companies. Respondents indicated they expect a third of their total US-based workforces will continue to work remotely.) An interesting lesson here is just how quickly—and seamlessly for many—this pivot was executed; it happened in a fraction of the time most of us would have thought possible.

As we optimistically put the pandemic in our rearview mirror, company management and their boards continue to meet more frequently than ever to discuss and formulate near-term and long-range business plans. However, with all that we’ve learned over the past year-plus about agility and flexibility, we can’t lose sight of some of the fundamental principles that help businesses achieve ongoing performance. More than ever it is incumbent on compensation committees, leadership teams, and HR professionals to ensure that the links between business strategy, talent management, and compensation strategy and design are meaningful.

The forced re-evaluation of both vulnerabilities and new opportunities may have been overdue for some companies and an unexpected benefit for others. But in light of those changes, it’s important to take the next step and examine some core compensation questions.

• Do we have the right executive compensation metrics to drive current, newly evolved business goals and priorities?
• Are the right leaders in place to support our changing business model or strategies?
• Given our changing business, how do we create line of sight for all employees?
• What have we learned from the pandemic about what our employees value?
• Has the virtual workforce opened up new opportunities for talent acquisition?  

Just as business as usual was not acceptable in 2020, compensation as usual should not be acceptable going forward. Customer needs have changed, workforce needs have changed, and people and compensation must be realigned to match those new preferences.

Many companies have re-evaluated the metrics in their incentive programs to ensure alignment with new business goals and strategies. There have been changes to the long-term incentive mix to not only mute the lingering effect of COVID-19, but to also highlight shifting attitudes about the primary objectives and attributes of long-term incentives. And these shifting attitudes aren’t confined to the executive ranks. With growing concern about the availability and needs of the broader talent pool, some high-profile companies have made public announcements regarding permanent work from home models and associated HR and compensation policy changes.

Bottom line: if your business strategy has changed or is evolving, so should your pay program. Reevaluate your compensation design to ensure it reflects the changes to your business model and business strategies. Every company is inherently different, and compensation and people strategies should reflect that. View these ongoing discussions and deliberations between the board and management through a lens that makes clear the right differences in your pay programs, relative to your competitors, can create a tremendous competitive advantage.

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Source: Pearl Meyer

https://www.pearlmeyer.com/blog/revisiting-business-strategy-and-compensation-alignment-in-light-of-covid-19

by Greg Iacurci | PUBLISHED TUE, JUL 27 20211:30 PM EDT, UPDATED TUE, JUL 27 20216:37 PM EDT

Workers saw their hourly pay in June jump at the fastest clip in more than a decade. Yet some of them saw those gains erased by high levels of inflation.

“Real wages” — a measure of income after accounting for the cost of goods and services people buy — fell by almost 2%, on average, last month compared with 2020. Senate Republicans said Wednesday that Americans were getting a pay cut as a result.

“The staples of American life are increasing exponentially,” according to Sen. Tim Scott, R-S.C., who cited examples like higher prices for gas, laundry, airfare, moving costs, hotels, bacon and TVs.

The thrust of the argument — that inflation eats into rising wages — is true, according to economists. Still, there are many nuances, they said.

For one, whether a consumer got a pay cut or not depends on their individual earnings and the things they buy.

“If prices are growing faster than wages, then people are getting inflation-adjusted pay cuts,” according to Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank. “Ultimately, this varies dramatically for every individual.”

Plus, inflation has been volatile and may prove temporary — meaning a reduction in buying power could be short-lived, economists said.

Inflation and wage growth

Average hourly earnings rose 3.6%, to $30.40, in June compared with the same month in 2020. That’s the biggest spike since January 2009, according to data compiled by the Economic Policy Institute.

Meanwhile, the consumer price index, a measure of inflation, jumped 5.4% over the same period — the most since August 2008.

Together, this amounts to a 1.7% loss in buying power, on average, when factoring in seasonal adjustments, according to the Bureau of Labor Statistics. 

“Inflation is a tax,” said William Foster, a vice president at Moody’s Investors Service. “That’s the best way to think about it.”

Inflation most impacts lower earners, who spend more of their average dollar on gas, food and other items that may be rising in price, Foster said. Wealthier individuals, who tend to hold more financial assets like stocks or homes, may be better able to offset the impact of inflation, he added.

But not everyone necessarily got a pay cut as a result. The 5.4% jump in annual inflation is an average of many items — and households aren’t necessarily buying the ones that are getting much costlier.

For example, the metric includes prices for used cars and trucks, which are up about 45% from June 2020 — their largest change on record. That price shock wouldn’t hit someone’s wallet unless they bought a used car.

Similarly, gasoline prices are up 45%. That extra cost would be borne by drivers, though perhaps not city residents who ride public transit.

By comparison, food prices are up just 2.4% over the same time, lower than the broader inflation measure.

Consumer behavior

The consumer price index also doesn’t account for shifts in the behavior of consumers, who may change what they buy to avoid these higher costs.

For example, one might switch to chicken from beef to save money, or delay buying a car until prices fall.

“People respond to price changes by shifting their consumption,” according to Noah Williams, an economics professor at the University of Wisconsin-Madison and an adjunct fellow at the Manhattan Institute.

The personal consumption expenditures price index, another measure of inflation, accounts for these shifts. The Bureau of Economic Analysis hasn’t yet issued the figure for June. But in May, the PCE index was 1.1 percentage points lower than the consumer price index annual reading (3.9% versus 5%) — which indicates consumers bought lower-cost goods.

However, these shifts still impose a cost on consumers, if not an explicit one, according to Casey Mulligan, an economics professor at the University of Chicago.

“They’re trying to minimize the evils, but they’re both evils,” said Mulligan, who served as chief economist of the White House Council of Economic Advisers during the Trump administration.

Distortions

There’s also reason to be wary of overinterpreting inflation and wage figures as the U.S. economy rebounds from the Covid-19 pandemic, according to economists.

That’s due to economic distortions caused by the virus. For example, consumer prices fell early in the pandemic. Comparing prices today to lower prices a year ago will naturally cause inflation readings to seem high.

Similarly, wage data may be skewed by a disproportionate number of layoffs among low-wage workers during the pandemic. In April 2020, for example, average hourly earnings jumped 8% (the highest on record) even amid mass layoffs, since more high earners remained in the workforce.

The same may be happening now, but in reverse. As the economy rebounds and lower-wage workers are rehired, average earnings may appear suppressed.

“It could be a little misleading” to suggest workers are getting a pay cut, according to Susan Houseman, research director at the W.E. Upjohn Institute for Employment Research.

″[The composition of the workforce] is especially changing during downturns and recoveries, so one has to be careful about interpreting these data,” she said.

Temporary or not?

It’s unclear whether higher consumer prices and wages are temporary or longer-lasting, according to economists.

However, at least some of the inflation can be explained by likely short-term dynamics, like supply constraints and a surge in demand as consumers emerge from a pandemic-induced hibernation, they said.

For example, high recent gas prices were caused partly because major oil-producing nations couldn’t reach agreement to raise oil supply in early July, according to AAA. And a shortage of microchips has led to a spike in car prices.

Some expect inflation to persist, though.

“Inflation is not going to be transitory,” Mohammed El-Erian, the chief economic adviser at Allianz SE, told Bloomberg TV on Friday. “I have a whole list of companies that have announced price increases, that have told us they expect further price increases, and that they expect them to stick,” he added.

Wages seem to have increased in recent months amid rising demand for workers, according to the Labor Department. Increased pay may be longer-lasting than high inflation, since businesses often don’t cut pay after raising it, Houseman said.

“We typically don’t give people wage cuts,” she said. “Employers typically don’t do that.

“So in that sense, they’re stickier.”

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Source: MSNBC

https://www.cnbc.com/2021/07/27/wages-are-rising-but-has-inflation-given-workers-a-2percent-pay-cut.html