What business owners need to know about pay transparency laws in Canada

Multiple provinces in Canada having introduced legislation that seeks to address systemic discrimination in the workplace, with a particular focus on narrowing the gender pay gap.

As business leaders, it's crucial to understand the implications and requirements of these new regulations.

What does pay transparency mean?

Pay transparency is a term used to describe open and accessible information about employee compensation. In some cases, pay transparency could involve more than just a salary or pay range. An employer could include details about bonus structures, benefits, and other rewards as well.

What is the Pay Transparency Act?

In May 2023, British Columbia passed the Pay Transparency Act that requires some businesses to include the expected pay or pay range for a publicly advertised job opportunity.

In Ontario, Bill 149 brings proposed changes to pay transparency and other employment-related legislation. Pay transparency legislation aims to ensure that all individuals are compensated fairly, fostering stronger and more inclusive communities. In B.C., women earned 17 percent less than their male counterparts, and the Ontario government reports that women earned 13 percent for each dollar earned by men.

The impact is felt even more acutely by Indigenous women, women of colour, immigrant women, women with disabilities, and non-binary people.

What is changing?

Changes in B.C.

Effective immediately, the pay transparency legislation in British Columbia prohibits employers from asking job applicants about their previous salaries. However, they can still use existing pay history information for the same employee when determining compensation for a new position. Additionally, reliance on publicly accessible information regarding pay for similar positions remains acceptable.

Furthermore, employers cannot take adverse actions against employees who inquire about their pay, disclose their pay to colleagues or prospective employees, ask about the company's pay transparency report, or provide information to the Director of Pay Transparency about their employer.

How your job postings may need to change

B.C.

Starting from November 1, 2023, all employers in British Columbia must include either the expected pay or the pay range for publicly advertised job opportunities. This move aims to enhance transparency and empower job seekers with critical information, as only 37 percent of online job postings in some jurisdictions include salary information.

For a detailed understanding of how this requirement applies to various job postings, including help wanted posters and recruitment campaigns, employers can refer to resources from the provincial government’s website.

Ontario

The legislation has not been passed yet and the provincial government has not provided any specific details. The changes happening in B.C. provide a starting point for what Ontario business owners could expect.

B.C. pay transparency

Provincially regulated employers of varying sizes will be mandated to complete and post pay transparency reports on their B.C. employees by November 1 of each year. The rollout is phased over the next four years, with different deadlines based on the number of employees.

The new pay transparency reports will highlight pay gaps among certain groups. An online reporting tool is under development to aid employers in preparing these reports. Organizations will have to include details on areas like pay differences between genders, bonus pay, overtime hours worked, and more.

While awaiting the tool, comprehensive guidance is available to assist employers in meeting their reporting obligations.

• November 1, 2023: The B.C. government and the six largest Crown corporations commence annual pay transparency reporting.
• November 1, 2024: Employers with 1,000 or more employees begin posting reports.
• November 1, 2025: Employers with 300 or more employees initiate annual reporting.
• November 1, 2026: Employers with 50 or more employees commence annual reporting.

Ontario pay transparency

In the current draft of legislation, employers will be required to maintain records of every public job posting and application form for three years. The Ontario government is still developing the details of their pay transparency laws and more reporting requirements could be created.

Learn more

As British Columbia and Ontario enact laws around pay transparency, business leaders must be aware of these changes so they can fulfill their obligations.

To learn more about how this legislation may impact your job posting requirements in B.C., contact Daniel Kasun, CPHR, Senior Manager Consulting at [email protected] and in Ontario, contact Hali VanVliet, BA, CHRP, CHRL, Partner Consulting, at [email protected].