TBS and PSAC Joint Pay Equity Agreement - Questions and Answers -

This is further to my letter dated November 25, 1999, in which mention was made of common information letters. A series of Questions and Answers have been developed and are now available via the TBS web site.

If additional information is required, contact Reg Giekes at (613) 952-3202 or by e-mail at giekes.reg@tbs-sct.gc.ca.

T. A. Smith
Director, Pay Administration
Labour Relations Division
Human Resources Branch

Date: December 9, 1999

Subject: TBS and PSAC Joint Pay Equity Agreement - Questions and Anwers of interest to both current and former employees

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2. WHO IS AFFECTED BY THE AGREEMENT?

3. All current and former employees of departments and agencies listed in Schedule I, Part I of the Public Service Staff Relations Act who were or are employed in the six affected groups are entitled to payment. This includes indeterminate employees, part-time employees including those working less than 1/3^rd of the hours of the scheduled work week, casuals, terms, seasonal employees and the estates of former employees. Individuals working under contract or employed through an agency are excluded from the agreement.

4. WHAT ARE THE SIX AFFECTED GROUPS?

5. The six groups are Clerical and Regulatory (CR), Data Processing (DA-CON sub-group), Educational Support (EU), Hospital Services (HS), Library Sciences (LS) and Secretarial, Stenographic and Typing (ST).

6. WHAT PERIOD IS COVERED BY THE PAY EQUITY AGREEMENT?

7. The total period covered by the Pay Equity Agreement is between March 8, 1985 and present. The retroactive payments will be made according to a schedule starting by the period between April 1, 1989 to current date, followed by the period from March 8, 1985 to March 31, 1989.

8. WHO DO I CONTACT TO OBTAIN PAYMENT?

9. Current employees do not need to take any action. Payment will be issued to them automatically by the department in which they are now employed.

   Former employees and pensioners may also receive payment automatically. However, to ensure that your last department has a current address for you to enable them to mail to you your cheques, you should contact them. If you do not know the number to call, you can call the pay equity hotline at 1-888-346-8886. They will be able to provide you with the telephone number of your last department.

10. SINCE I HAVE WORKED IN SEVERAL GOVERNMENT DEPARTMENTS, DO I NEED TO CONTACT EACH ONE?

11. No, for both current and former employees, it is the person's last employing department who is responsible to issue payment for the full period. The last employing department will ensure that they have all pay records and files.

12. HOW MUCH MONEY WILL I RECEIVE?

13. Individual entitlement is based on the period or periods of time that you worked in one of the affected groups.

14. WHEN CAN I EXPECT TO RECEIVE PAYMENT?

15. Since the agreement affects approximately 230,000 current and former employees, some work must be undertaken in the pay system before cheques can be issued. The tentative schedule for making payments is:

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9. WHAT IS THE GOVERNMENT DOING TO MINIMIZE THE EFFECT OF INCOME TAXES ON THE RETROACTIVE PAYMENTS?

10. Officials from the Treasury Board Secretariat and Canada Customs and Revenue Agency (formerly Revenue Canada Taxation) have been discussing the matter. CCRA is still reviewing their position and the use of waiver letters for transfer of funds to an individual's RRSP. This item will be the subject of a separate bulletin once finalized.

11. HOW WILL THE INTEREST BE CALCULATED ON THE MONIES OWING TO ME?

12. Interest is payable on 90% of the total pay equity adjustment. The interest rates to be used are the Canada Savings Bonds rates and the actual calculation is based on the applicable rate for each six-month period.

13. WHY ARE SOME GROUPS SUCH AS ST-SCY-04s NOT ENTITLED TO RECEIVE ANY PAYMENT UNDER THE AGREEMENT AND WHY DO AMOUNTS VARY BETWEEN AND WITHIN OCCUPATIONAL LEVELS?

14. Without going into technical detail, the payments made under the agreement are in line with the methodology prescribed by the Canadian Human Rights Tribunal and endorsed by the Federal Court of Canada.

15. WHY WAS THE DA-PRO SUB-GROUP NOT PART OF THE AGREEMENT?

16. In accordance with the Canadian Human Rights Tribunal decision order # 4, the DA occupation group was treated as two separate groups and the wage adjustments were calculated only for the DA-CON sub-group. This was on the basis of the distinctiveness of the work for the DA-CON and the DA-PRO and the fact that the DA-PRO was a male predominant group. Further, in accordance with the prescribed methodology, no wage gap existed for the DA-PRO sub-group.

17. WILL EMPLOYEES BE PROVIDED WITH FINANCIAL COUNSELLING?

18. Since everyone's financial situation is different individuals are encouraged to seek advice from a financial institution of their choice based on their own personal circumstances. General financial information will be developed jointly by the Public Service Alliance of Canada (PSAC) and the Treasury Board of Canada Secretariat (TBS) in consultation with Canada Customs and Revenue Agency (CCRA) with respect to tax waivers and the transfer of funds to an individual's RRSP.

19. CAN I HAVE MY PAYMENTS SPREAD OVER 2 OR MORE CALENDAR YEARS?

20. It is the Government's position that all payments will be made in the calendar year 2000. Since approximately 230,000 current and former employees have an entitlement it would be an administrative burden to control the spreading of payments over calendar years. Certainly compounding the matter is that the majority of persons can expect to receive at least 3 or 4 payments.

21. WHAT HAPPENS TO THE PAYMENTS IN THE CASE OF DECEASED EMPLOYEES?

22. The estates of deceased employees are entitled to the payments that would have been due to the employee.

23. WHEN WILL EMPLOYEES BEGIN RECEIVING THEIR REVISED RATES OF PAY?

24. Current basic pay will be updated between April 2000 and July 2000. At this time, employees in receipt of the current equalization adjustment (either $994 for the CR group or $1289 for the ST group) will have this amount rolled into their annual rate of pay along with the new equalization adjustment negotiated as a result of this agreement.

25. WHEN WILL PENSIONERS HAVE THEIR PENSION CHEQUES ADJUSTED?

26. Since pension cheques cannot be adjusted without notification from the pensioner's former department, it is not expected that pension cheques will be adjusted until late fall of calendar year 2000.

27. WHAT DEDUCTIONS ARE TAKEN FROM THE PAYMENTS?

28. The following deductions apply to each payment.

    Lump sum

    The annual lump sum amounts are subject to federal and provincial income taxes, Canada/Québec Pension Plan, Employment Insurance and Superannuation.

    5% in lieu of recalculation

    Federal and provincial income taxes, Canada/Québec Pension Plans and Employment Insurance.

    Interest payment

    As with any other interest payment such as bond or bank interest, the interest payment will not have any income tax deductions taken at source. It must be stressed that in spite of deductions not being recovered at source, the interest payment is taxable and forms part of taxable income of the recipient for the year in which the payment is received. Persons receiving an interest payment will receive a T5 statement.

    It must be remembered that a person's eligibility for each deduction will affect whether or not that particular deduction is recovered. For instance, in the case of terminated employees who have received a return of superannuation contributions, the lump sum payments would be made without superannuation being deducted. Likewise, if the maximum deduction premium has been reached when payments are made, then there would be no recovery made for those deductions.

29. WILL DISABILITY INSURANCE BENEFITS BE ADJUSTED?

30. All current and former employees who received or are receiving either disability insurance benefits or long term disability insurance benefits are entitled to an adjustment. It is presently expected that adjustments will be made in the latter part of the calendar year 2000, once departmental compensation advisors report the pay equity amounts to the insurance companies.

31. WILL PERSONS IN RECEIPT OF BOTH DISABILITY INSURANCE BENEFITS AND PENSION BENEFITS BE ENTITLED TO AN ADJUSTMENT?

32. Both disability and pension cheques will be adjusted. However, since disability benefits are offset by pension benefits, the initial recalculation of disability cheques may be subsequently adjusted when the recalculation of your pension cheque is done. Adjustments to both pension and disability cheques will in all likelihood be made in the latter part of 2000, once departmental compensation advisors report the pay equity amounts to both the insurance company and the Superannuation Directorate of Public Works and Government Services Canada.

33. CAN MONEY RECEIVED UNDER THE PAY EQUITY AGREEMENT BE GARNISHEED?

34. Where there is an active garnishment application in place, retroactivity pay equity adjustments, including interest payments can be garnisheed for active employees covered by the Garnishment, Attachment and Pension Diversion Act. Pay equity payments to former employees including pensioners, are not to be garnisheed.

35. WHAT INFORMATION IS AVAILABLE ON THE TREASURY BOARD WEB SITE?

36. All publications related to the pay equity agreement are available on the Treasury Board site.