WHY DO WE HAVE SALARY TRANSPARENCY LAWS?
PAY TRANSPARENCY ACROSS CANADA
There are several other Canadian jurisdictions that have already implemented various forms of pay transparency laws.
PRINCE EDWARD ISLAND SALARY TRANSPARENCY LAWS
Amendments to Prince Edward Island’s Employment Standards Act, effective June 1, 2022, require private sector employers to include pay in publicly advertised job postings. Employers are also prohibited from asking applicants about their pay history or retaliating against employees for disclosing information about their pay to other employees.
Newfoundland and Labrador have enacted the Pay Equity and Pay Transparency Act which requires private sector employers to include pay in publicly advertised job postings and to prepare pay transparency reports. Employers are also prohibited from asking applicants about their pay history or retaliating against employees for disclosing information about their pay to other employees. However, while the Pay Equity and Pay Transparency Act itself has come into force, the Newfoundland government has not yet announced when these transparency provisions will come into force.
ONTARIO TRANSPARENCY LAWS – SCRAPPED ENFORCING LAW FOLLOWING THE CHANGE OF GOVERNMENT (LIBERAL TO PC)
In Ontario, the Pay Transparency Act was enacted in 2018, however, it was never brought into force following the change of government. Our bulletin from 2018 provides more details on that legislative approach. The Ontario government also announced on March 13, 2023, that it would enact legislation requiring employers to include new hires with written information about their job, such as pay, work location and hours of work.
BRITISH COLUMBIA SALARY TRANSPARENCY LAW
British Columbia is looking to close the gender pay gap in the province with new legislation. The provincial government has introduced new pay transparency legislation that will require all employers to include wage or salary ranges in all publicly advertised jobs.
“People deserve equal pay for equal work… all employers need to be transparent about what people are being paid to close the pay gap between men and women,” says Kelli Paddon, parliamentary secretary for gender equity. “Our work doesn’t end here. We’re determined to continue our engagement with all of our partners to close the pay gap and ensure people get the fair payment they deserve.”
The requirement will be introduced to different employers in stages to give them time to prepare, according to the government:
- Nov. 1, 2023: BC Public Service Agency and Crown corporations with more than 1,000 employees (ICBC, BC Hydro, WorkSafeBC, BC Housing, BC Lottery Corporation and BC Transit).
- Nov. 1, 2024: all employers with 1,000 employees or more
- Nov. 1, 2025: all employers with 300 employees or more
- Nov. 1, 2026: all employers with 50 employees or more
Pay transparency can be a great tool for recruiting talent – but there are potential downsides to consider, said Pierre Chaigneau, associate professor of finance at the Smith School of Business at Queen’s University in Kington, Ont., in a previous interview with Canadian HR Reporter.
The B.C. legislation also prevents employers in the province from asking prospective employees for pay history information, or punish employees who disclose their pay to co-workers or potential job applicants.
The new rules will take effect Nov. 1 this year if the legislation is passed.
B.C. is also developing regulations that will provide employers with more details about how they will be required to report on the pay gap.
WHILE EMPLOYERS ARE GENERALLY COMPLYING WITH THE LETTER OF THE LAW, THERE’S ALSO EVIDENCE THAT MANY AREN’T COMPLYING WITH THE SPIRIT OF THE LAW
This raises a question around whether – in the long run – well-intentioned salary transparency laws will actually move the needle in a notable way at all.
CANADIAN FEDERAL TRANSPARENCY LAWS FOR FEDERALLY-REGULATED PRIVATE SECTOR EMPLOYERS
In the federal jurisdiction, amendments to the Employment Equity Regulations under the Employment Equity Act introduced new pay transparency reporting obligations in 2021, requiring federally-regulated private sector employers with at least 100 employees to include more detailed salary data – including raw gender-based wage gap data – in their annual employment equity reports. This data is expected to be made public by Employment and Social Development Canada (ESDC) in a searchable format. Our bulletin provides more details on these significant new disclosure obligations.
BEYOND CANADA’S BORDERS: UNITED STATES SALARY TRANSPARENCY LAWS
Demands for transparency
Amid the legislative changes in the US, most estimates say approximately a fifth of the American labour force is now covered by some kind of law relating to pay transparency. These laws have a similar essence, though the details vary.
WHICH US CITIES HAVE SALARY TRANSPARENCY
South of the border, a number of states have introduced (or have announced that they plan to introduce) pay transparency laws, including
- Rhode Island
- New York State
- South Carolina.
- Some cities, such as New York City, have also introduced laws that require employers to include pay ranges in job postings and, in some cases, make annual disclosures regarding their pay data.