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Impact of the Pay Transparency Act on workplace equality

By Rachel Bangura ·

Law360 Canada (July 4, 2024, 10:37 AM EDT) --
Rachel Bangura
In May 2023, British Columbia passed the Pay Transparency Act. Starting May 11, 2023, employers in British Columbia are no longer allowed to ask candidates about their previous pay or retaliate against current or former employees for discussing or revealing their pay to others in the workplace or to job applicants.

Accordingly, as of Nov. 1, 2023, all employers in British Columbia must disclose the salary ranges in their public job postings.

On Nov. 6, 2023, Ontario announced that it was preparing to establish its own pay transparency legislation akin to British Columbia’s. However, the legislation did not include a salary history ban. A persistent pay disparity between genders remains evident, with women making 87 cents on average for every dollar made by a man.

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Nonetheless, Ontario’s Employment Standards Act, 2000, S.O. 2000, c. 41 seeks to safeguard employees from any acts of reprisal for disclosing or discussing their salary with their colleagues as it relates to pay transparency.

Other provinces like Prince Edward Island and Newfoundland and Labrador have implemented their own iterations of pay transparency legislation.

Impact of pay transparency on the workplace

The introduction and broadening of pay transparency legislation in British Columbia and across other provinces in Canada could have a significant impact on the workplace. Therefore, measures should be taken by employers, including but not limited to:

  1. Employers must address and rectify any pay disparities based on race, ethnicity, disability and other protected grounds per the Human Rights Code [RSBC 1996] CHAPTER 210. Therefore, s. 12 of the British Columbia Human Rights Code (BCHRC) prohibits wage discrimination on the basis of sex. Accordingly, employers are prohibited from paying an employee of one sex less than another employee of another sex for comparable or substantially similar work. Moreover, s. 13 of the BCHRC further prohibits discrimination in employment stating that a person must not:

    • refuse to employ or refuse to continue to employ a person, or
    • discriminate against a person regarding employment or any term or condition of employment because of the Indigenous identity, race, colour, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation, gender identity or expression, or age of that person or because that person has been convicted of a criminal or summary conviction offence that is unrelated to the employment or to the intended employment of that person.

  2. Secondly, performance evaluations serve as a subsequent tool to address disparities in pay among employees holding similar roles in the workplace.

Pitfalls of pay transparency

However, despite the positive aspects of pay transparency, there are several drawbacks in the workplace, such as:

  • It reduces an employer’s ability to negotiate the salary or wages of prospective employees.
  • It leads to increased outsourcing.
  • Employee productivity may decline if employees become aware of stark disparities in pay among their colleagues.

According to the B.C. government, there are no requirements to disclose bonus pay, overtime pay tips and/or benefits. The B.C. government has not provided additional details regarding the specific breadth of the salary range that must be advertised but has merely stipulated that a salary range must be included in the public job postings.

Pay transparency reports

Per British Columbia’s Pay Transparency Act, employers are required to complete and post their reports on the first of November of each year. The reporting requirement applies to the following employers in the coming years:

  • By Nov. 1, 2023: The B.C. government and the six largest Crown corporations, which are BC Hydro, BC Housing, BC Lottery Corp., BC Transit, ICBC, and WorkSafeBC.
  • By Nov. 1, 2024: All employers with 1,000 employees or more.
  • By Nov. 1, 2025: All employers with 300 employees or more.
  • By Nov. 1, 2026: All employers with 50 employees or more.

The reports are crucial as they aim to spotlight pay discrepancies among specific groups, such as women, women of colour, Indigenous women, non-binary individuals and those who classify themselves as “Other.” The Act further underscores the ongoing wage disparity in British Columbia, where women continue to earn 17 per cent less than men.

Takeaways

As efforts continue to address the ongoing challenge of bridging the pay gap between genders, legislative changes offer a chance to promote equity, diversity and inclusion. Therefore, it is imperative that all provincial governments take steps to maintain open and transparent pay transparency in the workplace.

Rachel Bangura is an associate lawyer with Epstein & Associates.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.   

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