On March 16, 2015, the Broader Public Sector Executive Compensation Act, 2014 (“BPSECA”) came into force. BPSECA authorizes the government to control public sector executive compensation by establishing sector specific hard caps and enforcement measures to ensure compliance.
DDO’s September 2014 blog discussed the details of the executive compensation restraint measures in the BPSECA. Generally, the BPSECA permits the government to establish “compensation frameworks” for senior public sector executives who make more than $100,000 in compensation per year (or could potentially reach that level).
These compensation frameworks, if imposed on an employer, will replace the existing executive compensation restraints imposed by the Broader Public Sector Accountability Act, 2010 (“BPSAA”).
The BPSECA applies to the same broader public sector employers as the BPSAA, including hospitals, universities and colleges of applied arts and technology.
The BPSECA also applies to “designated employers” such as community care access corporations, local health integration networks, Ornge, and “everybody prescribed as a public body under the Public Service of Ontario Act, 2006 that is not also prescribed as a Commission public body under the Act”. This includes Cancer Care Ontario, eHealth Ontario, Metrolinx and Trillium Gift of Life Network. Please note this is not an exhaustive list of public bodies covered by the BPSECA. Please contact us if you are uncertain as to whether your organization is covered by this legislation. For now, other health care organizations including family health teams, community health centres and long term care homes are not impacted.
On April 1, 2015, the Ontario government released the Broader Public Sector Compensation Information Directive. The purpose of the Directive is to require every designated employer to provide information relating to executive compensation to the government. This information will be used to create a benchmarking system for the management of executive compensation in the broader public sector.
Hospitals, community care access corporations and other designated health care employers can expect to receive a written request from the government requesting compensation information. Responses to that request within the time line specified in the request are mandatory.
Designated employers will be required to complete a standardized form (Appendix B of the Directive) which requests disclosure of executive compensation elements such as salary, paid annual incentive pay, signing bonus, retention bonus, paid leave, benefits, loans, pension arrangements, salary ranges, maximum annual incentive amounts, annual incentive targets and severance pay.
The standardized form also requests information about the compensation structure of the highest paid non-executive managerial level, band or classification which directly reports to an executive position. This information may be used to solve an ongoing issue whereby executives were making the same or even less than their direct reports because of the wage freeze.
Finally, employers may also have to provide actual documentation for the following: employment agreements, compensation plans and compensation studies.
Bottom line: Hospitals, community care access corporations and certain other health care organizations should notify their finance and/or human resources personnel to expect receipt of a formal written request for disclosure of compensation information and to comply within the timelines indicated.
Please contact Maria McDonald, Senior Human Resources Counsel, if you have any questions about the BPSECA.