Pay transparency is a hot topic in Canada right now, with strong public support for pay transparency legislation. A recent study found that 84% of Canadians would support pay transparency laws, and this support is found across both the for-profit and non-profit sectors. To some extent this is part of a broader overall trend toward transparency, which we have written about previously.
At a high level, pay transparency is about making pay information more public, often with the goal of reducing pay gaps. As pay transparency legislation is rolled out across the country though, there are some differences in the exact requirements.
Pay Transparency Across Canada
Where do we stand with pay transparency legislation in Canada? Six Canadian jurisdictions currently have pay transparency laws enacted or in the process of being enacted.
The following jurisdictions have pay transparency legislation that is in force:
- Nova Scotia
- Prince Edward Island
The following jurisdictions have recently introduced pay transparency legislation:
- British Columbia
Ontario has enacted pay transparency legislation but it is not yet in force. This legislation was passed under the previous government and was scheduled to come into force on January 1, 2019. This was delayed by the current government and there is currently no indication when, or if, this legislation will come into force.
Pay Transparency Requirements
Most pay transparency legislation requires employers to include pay information in public job postings. For example, pay transparency legislation in PEI requires that employers who publicly advertise a job posting must include information in the posting about the expected pay or the range of expected pay for the position.
The proposed legislation in BC and Newfoundland and Labrador includes a similar requirement, as does the legislation in Ontario. The provisions dealing with job postings in BC will come into effect on November 1, 2023, assuming the legislation passes. For BC employers, this means that as of November 1 of this year they will have to include the salary or wage (or salary or wage range) for the job in any publicly advertised job posting.
Federally-regulated employers with 100 or more employees are subject to the most comprehensive pay transparency legislation currently in force. These employers must file an annual report that is comprised of six forms providing detailed information on salary ranges and salary gaps based on employee status (women, Indigenous peoples, persons with disabilities, and members of visible minorities). The report for a calendar year must be filed by June 1 of the following year.
Similar reporting obligations are found in the legislation in Ontario and Newfoundland and Labrador (not yet in force) and in the proposed BC legislation.
Under the proposed BC legislation, the obligation to file a report will be rolled out over time, starting with the largest employers (based on the number of employees on January 1 of the applicable year):
- for 2024, 1 000 or more ;
- for 2025, 300 or more;
- for 2026, 50 or more;
- after 2026, more than the lesser of 49 and any prescribed number.
The report must be prepared on or before November 1 of each year.
In every jurisdiction with pay transparency legislation or proposed legislation (other than Federal), the legislation prohibits employers from asking about wage history. Most jurisdictions include some exceptions to this, such as if an applicant voluntarily discloses their wage history or to seek information about the ranges of pay or aggregate pay provided for comparable positions.
Under the pay transparency legislation in Nova Scotia, employers cannot ban discussions/disclosure of wages by employees within the workplace. There are similar provisions in the proposed legislation in BC and the legislation in Newfoundland and Labrador and Ontario.
Pay Transparency as a Tool for Employers
As we have previously written, compliance can be a strategic tool for employers. The value of pay transparency as a tool for employers has been recognized in both the non-profit and for-profit sectors.
Imagine Canada has come out in support of pay transparency in the non-profit sector, saying that “[t]he adoption of hiring practices that are fair, equitable, and conscious of systemic barriers that unfairly impact members of equity-seeking groups is of vital importance for employers, especially for nonprofit sector employers who seek to support these communities”.
And a recent article in Canadian Business highlights the benefit of pay transparency for employers, noting that “[p]rogressive businesses should not wait for pay transparency to be mandated. It’s advantageous to adopt it now. Not only does pay transparency help attract top talent, it can help close the wage gap, and positions a company as a leader in their industry and makes them more attractive to job-seekers. It builds trust and leads to less attrition”.
How Compliance Works Helps HR Professionals
Staying on top of compliance deadlines and constantly changing employment laws can be challenging and time consuming. Compliance Works provides timely updates on changes to employment laws across Canada and our Reminders ensure that you never miss a change.