Canadian Payroll Reporter

THE COMPLIANCE AND STRATEGY SOURCE FOR PAYROLL AND HR PROFESSIONALS NOVEMBER 2013 Foundation certifies companies with equitable pay structures NEW KIDS ON THE BLOCK Certification touts maximum 8:1 pay ratio between CEO, lowest-paid workers as 'sustainable' NEWS BRIEFS PM #40065782 | BY ZACHARY PEDERSEN | financial information is accurate. Organizations are also required to pay a $200 A NEW CANADIAN foundation is hoping annual fee, which Wagemark intends to its certification process will narrow the direct to future research. wage gap between the highest- and lowWagemark is already planning the est-paid employees. next phase of its campaign: tier two cerThe Wagemark Foundation will certification. This fall, the foundation will tify an organization, company or nonattempt to appeal to larger corporations profit that maintains a pay differential by introducing a sliding scale ratio tied between its CEO and its lowest-paid to revenue, capping at a maximum ratio worker at or below 8:1. That of 30:1. means a company pay"Part of the reason for creating ing a worker $10 per tier two is just certain realism that hour ($20,800 per our tier one certification has been year) would compenprincipally aimed at small and sate its CEO no more medium enterprises," he says. than $166,400 annu"But we recognize that there are ally. multinational corporations earn"We spent a lot of ing many billions of time trying to deterdollars in revenue each mine what the ratio year and over the long should be," says Peter term we want to see MacLeod, executive some of these same To earn Wagemark certification, director of the Toronto- a company paying a worker $10 principles applied to based foundation. "We per hour could pay its CEO a businesses of that scale, chose eight as the top- maximum of $166,400 per year, as well." most multiple because if using the 8:1 ration. Wagemark wants you look at the history to get people thinking of organizations — really over the past about pay ratios, rather than total pay. 100 years — that have used pay ratios "In the 20th century, we relied on in establishing compensation, typically two policy levers to control for income those that have lasted the longest and inequality," MacLeod says. "One was been the most profitable and resilient the minimum wage and the other was a had anything from a 7:1 to a 12:1 ratio." progressive tax system." Although 8:1 may look like a tight As recently as 1970, the top marginal difference to many observers, MacLeod rate was 90 per cent, MacLeod says. says many organizations operate well "So if the taxman was basically going within this context. to take 90 cents on every dollar over a "We wanted to show that, for the certain threshold, there was no reason most part, this is close to the industry to pay CEOs more because their pay was norm," MacLeod says. going to disappear," he says. To qualify, employers need a charContinued on page 5 tered accountant to verify the provided IN THIS ISSUE Looking for a new payroll service provider? Here are 5 new companies looking to grow their client base . . . . . . . . . . . . . . . . . .3 Draft income tax legislation would implement budget proposals; Manitoba WCB to review assessment rate model; Quebec employers expect 2013 LSVCC raises to mirror 2014; CRA announces prescribed interest rates . . . . . . . . . . . .6 PREMIUM PAY FOR SUNDAY WORK What does the law say about paying employees for work on Sundays? . . . . . .11 Ottawa payroll proposal could claw back paycheques Pay in arrears plan for federal workers violates agreements: Union | BY LIZ FOSTER | A PROPOSAL BY the federal government to make changes to the payroll of its employees — with a potential to save Ottawa $9 billion in the process — is being met with hostility by unions and called "wrong-headed" by one employment lawyer. Public Works and Government Services Canada (PWGSC) floated the idea of changes to the pay system for federal employees in the 2013 federal budget. continued on page 2

• Cover