Public Sector Compensation Plans
The Public Sector Employers’ Council (PSEC) Secretariat works with employers to promote a cost-conscious approach to recruitment and retention of excluded and executive leaders through consistent and appropriate compensation levels and practices.
The PSEC Secretariat achieves this by coordinating the provincial approval of compensation plans and executive contracts by the Minister responsible for the Public Sector Employers Act. The Secretariat reviews compensation plans and contracts to ensure they are based on appropriate benchmarks, adhere to B.C.’s compensation and expense policies, and aligned with government’s service goals for that organization or sector.
The PSEC Secretariat puts a strong focus on CEO and executive compensation given the importance of these roles in promoting a cost-conscious, principled culture across public sector organizations. Since these positions are often filled with highly skilled and experienced individuals, the PSEC Secretariat’s coordination aims to reduce inter-agency competition for talent and upward pressure on compensation costs.
Compensation plans govern how total compensation is provided to excluded employees. The plans typically describe salary ranges, benefit provisions, relevant job market comparators, recruitment and retention challenges, and the types of positions covered by each range.
The Public Sector Employers Act allows the Minister responsible for the Act to direct employers to create compensation plans for their excluded employees, or to direct employers’ associations to create plans on behalf of employers in their sector. The Minister’s direction may focus on certain groups of senior employees, or on all management and excluded employees.
Once approved, the compensation plan is a legally enforceable compensation standard. Compensation in excess of this standard must be repaid to the government.
The Minister directs employers to:
- Create compensation plans for excluded or executive employees of the employer, or
- Direct employers’ associations to create plans on behalf of employers in the association’s sector
Once the direction is issued, all compensation management must continue only based on previously approved compensation plans. For example, employers can still make compensation changes that result from promotions and reclassifications consistent with compensation ranges in effect before the Minister’s Direction.
However, employers may not make any changes to compensation outside of the existing compensation plans without the Minister’s prior approval. For example:
- Providing an across-the-board increase to compensation ranges
- Hiring a new executive at a salary above existing compensation ranges
Elements of a Compensation Plan
Public sector employers and employers’ associations usually include the following elements in a compensation plan:
- Positions or classes of positions covered by the compensation plan
- Total compensation range (the sum of base salary, incentive pay, benefits, perquisites) for each position or class of positions covered by the plan
- Base salary ranges for each position or class of positions
- Description of any policies or criteria governing base salary adjustments
- Description of any re-earnable incentive plans or bonus plans (including target and maximum amounts), and any policies or criteria governing the payment of re-earnable incentives or bonuses
- Description of the performance measures and targets
- Relevant sectoral standards or guidelines governing matters, such as payment for membership in professional associations, reimbursement for leased vehicles and other expenses reimbursed
- Description of any employee benefits or perquisites
- Benchmarks or compensation study showing how compensation levels within the relevant labour market compare with compensation levels for those positions covered by the plan
- Any other information that may be relevant, including evidence of recruitment and retention difficulties, such as compression or inversion or other internal issues, or other business considerations