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The HR Space

Pay Transparency: A Growing Trend

Reading Time 5 minute read


HR Space

On March 7, 2023, the BC government introduced Bill 13, the Pay Transparency Act (“Bill 13”). As the name suggests, the purpose of the proposed legislation is to identify and eliminate pay differences amongst groups of workers by bringing greater transparency to how workers are paid and where wage gaps persist. 

Bill 13 is part of a broader global trend to use transparency in pay practices to try to close the wage gaps that persist for women and other equity seeking groups. While BC is the most recent jurisdiction in Canada to propose pay transparency legislations, it is not alone; several Canadian jurisdictions have followed examples set in the United Kingdom, United States and elsewhere in the world to mandate pay transparency for employers.  

Overview of the Proposed BC Pay Transparency Act

If Bill 13 comes into force, it will:   

  • require BC employers to specify the expected “salary or wage” in all publicly advertised job postings;
  • prohibit BC employers from asking job applicants (or anyone else) for information about how much the applicants previously or currently make;
  • prohibit BC employers from retaliating against employees for: asking their employers about their pay; disclosing information about their pay to other employees or applicants; or asking employers to comply with these new pay transparency obligations;
  • require BC employers to ask their employees for certain information and subsequently prepare annual pay transparency reports showing how that information relates to the employees’ pay. Employers with publicly accessible websites must post their reports online, while employers without publicly accessible websites must make copies available to their employees and members of the public upon request.

Bill 13 also contemplates that the minister who receives the reports will publish a report on the collective results, including pay gaps and trends. Recognizing that pay gaps disproportionately impact Indigenous women, women of colour, immigrant women, women with disabilities and non-binary people, employers will be required to report on data that goes beyond just male and female pay statistics. These reporting obligations, if enacted, will be phased in between November 2023 and November 2026, depending on the size of the employer. As currently drafted, BC employers with less than 50 employees would not be required to prepare annual pay transparency reports.

Bill 13 does not, however, create any recourse mechanisms where gender pay gaps are identified. Rather, an individual’s primary recourse would be to file a wage discrimination complaint with the BC Human Rights Tribunal.

Pay Transparency Across Canada

There are several other Canadian jurisdictions that have already implemented various forms of pay 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.

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. 

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

South of the border, a number of states have introduced (or have announced that they plan to introduce) pay transparency laws, including California, Washington, Colorado, Maryland, Connecticut, Nevada, Rhode Island, New York State, Illinois, Massachusetts, Pennsylvania and 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. 

For its part, the United Kingdom is approximately one year into a pilot scheme where participating employers list salary details on job postings and are prohibited from asking about salary history during the recruitment process. Under its Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, the United Kingdom also imposes obligations on employers with 250 or more employees to publish information relating to the gender pay gap in their organization (similar to the new obligations in the federal sector under the Employment Equity Regulations). In particular, these large employers are required to publish data regarding the differences in the average hourly rates of pay paid to male and female employees; the difference between the average bonus paid to male and female employees; the proportions of male and of female employees who receive bonuses; and the relative proportions of male and female employees in each quartile pay band of the workforce. 

What’s Next?

While not passed into law yet, employers in BC should start preparing for Bill 13 to come into effect (currently anticipated for November 1, 2023). In particular, employers should consider reviewing their current compensation practices to assess whether a more formal, standardized compensation structure can be implemented to mitigate any inadvertent pay inequities and otherwise prepare for more external scrutiny of their pay practices.

As pay transparency legislation becomes increasingly common in North America, other provinces will likely follow suit. However, even without formal legal requirements, employers (especially those with cross-border operations) may face pressure from their employees or the public to provide increased transparency when it comes to pay.

We will continue to update our clients as new obligations related to pay transparency emerge and as Bill 13 progresses through the legislative process.  If you have any questions in the meantime, please do not hesitate to contact the authors or your regular Fasken lawyer.

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For more information or to discuss a particular matter please contact us.

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