The government in British Columbia (B.C.) enacted the Pay Transparency Act in May to improve pay equity and address systemic discrimination that indigenous women, women of color, immigrant women, women with disabilities and nonbinary people face in the workplace.
Canada’s west coast province has one of the highest gender pay gaps in the country, the B.C. government reported. According to Statistics Canada, in 2022 women in B.C. earned around 17 percent less than men.
“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,” Kelli Paddon, parliamentary secretary for gender equity, said in a March statement. “We’re determined to close the pay gap and ensure people get the fair payment they deserve.”
Effective Nov. 1, employers in B.C. must include wage or salary ranges on all advertised jobs. They also are prohibited from asking about pay history.
“This is a big change for employers,” said Cissy Pau, principal consultant at Clear HR Consulting in Vancouver, B.C.
Employers will also be required to complete and post pay transparency reports on their gender pay gap starting in November. This obligation will be introduced in stages over the next four years to give employers in the province time to prepare:
- Nov. 1, 2023: The B.C. government, along with public-sector organizations such as BC Hydro, BC Housing, BC Transit, the Insurance Corp. of British Columbia, and workers’ compensation board WorkSafeBC.
- Nov. 1, 2024: Employers with 1,000 or more employees.
- Nov. 1, 2025: Employers with 300 or more employees.
- Nov. 1, 2026: Employers with 50 or more employees.
An online recruiting tool is in the works to assist employers with their pay transparency reporting obligations, said Abigail Cheung, a lawyer at Harris & Co. in Vancouver.
Generation Z and Millennial workers say pay is important to them because they want to know employers value their contributions to the workplace, Cheung stated. According to the Deloitte Global 2023 Gen Z and Millennial Survey, half of respondents say the high cost of living in the 2020s is forcing them to live paycheck to paycheck.
Employers will also collect gender information from their employees, according to the B.C. government. The goal is to ensure that addressing the pay gap goes beyond the gender binary, making B.C. the first jurisdiction in Canada to take this approach.
“Data collection on the gender pay gap has only focused on men and women to date,” said Michelle McKinnon, an attorney with Cassels, Brock & Blackwell LLP in Vancouver. “By including employees who are transgender, gender-diverse or nonbinary, the collection of data will be more accurate. This will be aligned with how employees have identified themselves in the workplace when it comes to enrolling in benefit plans and health insurance.”
Prepare for Difficult Conversations about Compensation
In the meantime, regulations for the Pay Transparency Act will be drafted during the summer of 2023, so employers are currently taking a “wait-and-see” approach, McKinnon noted.
This gives employers some breathing room to come up with a process to benchmark salaries against the market, Pau explained. Employers should come up with the criteria to determine salaries, considering an employee’s performance, education, years of experience and competency skills.
“Companies need to think about how to share this information with their employees,” explained Annika Reinhardt, a compensation strategist at Talent Collective in Vancouver. “Employers need to make sure there’s time to properly communicate about implementing wage transparency.”
One way to start the conversation is to offer employees anonymous channels through Slack or Microsoft Teams where they can ask questions they might not feel comfortable asking their managers or bringing up in a companywide meeting, Reinhardt continued.
“Compensation can be an emotional conversation,” she added. “Encouraging anonymous feedback is a good way to capture employee sentiment.”
Pay transparency can be a great way to build trust among staff, as it allows employees to understand how pay decisions are made and can help foster a culture of open communication, said Laura Gale, CEO and founder of White and Gale Consulting Inc., in Vancouver.
Experts advise employers in B.C. to update their employment policies and contracts sooner rather than later:
- Recruitment policies should reflect that questions to job candidates about their salary or pay history are now unacceptable in interviews.
- Employee handbooks should set out that employers now cannot discipline employees if they ask about their pay, share their pay information with another employee or raise concerns about the company’s compliance with the legislation.
- Training sessions for managers and others involved in the recruitment process should be scheduled in the coming months to educate them about B.C.’s pay transparency legislation.
HR’s Responsibility with Pay Transparency
Human resource practitioners will be taking the lead in instilling pay transparency in the workplace by gathering data, conducting employee surveys, consulting with management to have more objective salary policies in place, and establishing a strategic approach about the process, Pau explained.
Pay transparency can help to reduce the risk of pay discrimination, as it provides a transparent record of how pay is determined within the organization.
“Salary is more than a number—it reflects a company’s values,” Cheung noted.
Employers will be looking to HR to guide them through these changes and educate them on compliance, but also to consult with them about all the ways pay transparency and pay equity will positively impact their business, McKinnon concluded.
Catherine Skrzypinski is a freelance writer based in Vancouver, B.C.