Money is no longer a taboo topic in many Canadian workplaces.


Pay transparency legislation is turning wages and salaries into fodder for open conversation, a move driven in part by an effort to close the stubbornly persistent gender wage gap.

Women earned 89 cents for every dollar a man earned in 2021, the most recent data available from Statistics Canada. That’s an 11.1 per cent gap between the sexes.

Catalina Rodriguez, an employment lawyer, workplace investigator and mediator at Forte Law in Surrey, B.C., said it’s telling how fast British Columbia moved in passing its pay transparency legislation. The bill was introduced the day before International Women’s Day in March 2023 and became law on May 11, 2023.

“No law is ever passed that fast,” she said. “The purpose of the legislation, according to what the government is saying, is to try and shorten the wage gap between men and women.”

That gap is even more pronounced when it comes to women who are Indigenous, colour, or recent immigrants, said Rodriguez. Indigenous women earn 20.1 per cent less and immigrant women who landed as adults earn 20.9 per cent less, according to Statistics Canada.

‘Massive cultural shift’

The changes will be a “massive cultural shift” for many organizations that not only didn’t want staff talking about paycheques in the past but may have even reprimanded them for doing so, she said.

Rodriguez talked about her days working in the financial sector where money was an off-topic subject for all employees.

“Your pay was sacredly secret, and that was made very clear from the moment they hired you,” she said. “What your bonus is, what your pay is, is between you and I and you can’t share that with anybody.”

In organizations where money is really taboo, that culture may not change over night. Leadership may still abhor the thought of staff discussing pay, but “if it comes to the ears of any manager, they can’t do anything about it,” she said.

Employers are also going to have to get used to having difficult conversations with staff whose wages are out of line with a co-worker doing the same job, said Rodriguez.

No consequences in B.C. legislation

B.C.’s legislation doesn’t contain penalties for non-compliance, according to Rodriguez.

“This is not a complaints-based regime,” she said. “There’s no consequence for non-compliance with the act itself or the regulation.”

But there are other avenues for wronged employees, including under section 12 of the province’s Human Rights Code which specifically bars discrimination in wages by sex, she said.

“Finding out that I’m being paid less on the basis of my gender or sex still entitles people to file a human rights claim,” said Rodriguez.

Instead, the B.C. law is an effort to get employers to do some navel-gazing and actually find out — using real data — what is happening in their payroll.

“And once you look at the wage gap, and you see that you have one, start fixing it,” she said. “But we’re not going to punish you if you don’t fix it. We’re going to, perhaps, put you on a list of people that are not complying by putting their report out there.”

An imperfect process

John Hyde, an employment lawyer with Hyde HR Law in Toronto, said the transparency push across the country is “beneficial” but it’s not a perfect process.

“It’s the good, bad, and ugly of any legislation,” he said. “It’s important to remember that salary levels are a very emotional subject for employees.”

The upsides are obvious, including building trust, engagement and eliminating the chance of bias, he said. It also can save a lot of time on both sides — because many hiring discussions go off the rails when the conversation turns to compensation. Posting ranges in job postings can put an end to that quickly.

“There are so many times that employers find themselves in a situation where they will engage a prospective employee, and the communication flow will be fabulous, until we talk about wage rates,” he said. “And then it falls apart.”

It can get problematic, though, in a tight labour market where employers might need to artificially inflate salaries in a job posting to attract quality candidates, he said.

“What is the effect upon the existing employee group? Studies have shown that if employees feel they’re getting paid less than somebody else for relatively the same type of work, then production decreases,” said Hyde. “There’s an argument that this is going to increase the cost of doing business for employers everywhere.”

One tactic employers could use in that scenario is a signing bonus, he said. “But, again, that adds to the price of recruitment.”

Hyde’s advice to employers is simple: Embrace it because there is going to be a push for more and more transparency.

“Number one, correct the injustices you current have,” he said. “Number two, develop a really good education policy and plan to address perceived injustices and to explain why rates may be different.”

SIDEBAR

Coast-to-coast breakdown

British Columbia

As of May 2023, the Pay Transparency Act prohibits employers from asking job applicants about past salaries and from penalizing employees who discuss or inquire about compensation or pay transparency reports.

As of November 2023, employers are required to include wage and salary information in public job postings.

The requirement for employers to complete and post pay transparency reports is being phased in, with deadlines set for different categories of employers ranging from Nov. 1, 2023, to Nov. 1, 2026, based on the size of the employer.

Ontario

Ontario passed the Pay Transparency Act, 2018, but the legislation never came into force due to a change in government.

In November 2023, Ontario introduced pay transparency provisions within the proposed Bill 149, Working for Workers Four Act, 2023.

The proposed pay transparency provisions would require employers to disclose expected compensation or a compensation range in public job postings.

Nova Scotia

Nova Scotia's Labour Standards Code prohibits employers from inquiring about the pay history of job applicants or employees and from punishing employees who share their pay information with colleagues.

In October 2023, the opposition Liberals tabled the Pay Equity and Pay Transparency Act, a private member’s bill which is aimed at enhancing pay transparency and equity.

If passed, the proposed Act will mandate that employers include expected pay or salary ranges in job postings, prepare pay transparency reports, and prohibit the disciplining or dismissal of employees who inquire about their own pay or the employer's pay policies.

Prince Edward Island

As of June 2022, P.E.I.’s amended employment standards legislation requires employers to disclose expected pay or a pay range in public job postings.

The legislation prohibits employers from inquiring about a job applicant's past salary.

Employers are forbidden from punishing employees for discussing their pay, inquiring about pay policies, asking for compliance with pay transparency provisions, or reporting on pay transparency compliance to an Employment Standards Inspector.

Newfoundland and Labrador

In Fall 2022, N.L. passed Bill P-3.02, which aims to introduce the Pay Equity and Transparency Act for public and private sectors, though pay transparency provisions have not yet been implemented.

Once implemented, the legislation will require employers to include pay information in publicly advertised job postings and prohibit them from inquiring about a job applicant's past salary.

The legislation will also mandate that employers prepare pay transparency reports and protect employees from retaliation for discussing their pay or inquiring about pay transparency reports.

Federal

The federal government's Pay Equity Act came into force on Aug. 31, 2021. It establishes a pay equity regime for federally regulated workplaces with 10 or more employees, including the private and public sectors.

Employers are required to develop and update a pay equity plan. This involves identifying job classes, determining if they are predominantly male or female, assessing the value of work, and comparing and adjusting compensation to ensure equal pay for work of equal value.

Employers must establish their pay equity plan within three years of becoming subject to the Act, adjust compensation where necessary, and update their plan every five years to maintain pay equity and address any new pay gaps.

Other

Saskatchewan: No pay transparency or pay equity laws.

Manitoba: No specific pay transparency law, but a draft bill has been introduced in the past. In 1985, it passed The Pay Equity Act which applies to the public sector.

Quebec: No specific pay transparency law, but it does have pay equity legislation that was passed in 1996 and strengthened in 2009.

New Brunswick: No specific pay transparency law, but it has 2010 pay equity legislation that applies to the public sector.

Northwest Territories: No pay transparency or pay equity laws.

Nunavut: No pay transparency or pay equity laws.

Yukon: No pay transparency or pay equity laws.





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