Closing the gap: British Columbia passes pay transparency legislation

On May 11, 2023, British Columbia passed the Pay Transparency Act, also known as Bill 13. This new legislation aims to address systemic discrimination in the workplace by fostering transparency in pay practices.

The new Pay Transparency Act focuses on three specific areas:

• Job postings – Effective November 1, 2023, employers will have to list the expected salary or pay range for publicly advertised job opportunities.
• Pay history – The Act prohibits employers from taking action against employees who inquire about their pay, discuss their pay with colleagues or future colleagues, the transparency report, or provide information about their employer to the Director of Pay Transparency. Additionally, employers are no longer be allowed to seek pay history information from applicants.
• Pay transparency report – Details on the specific contents of the report are currently under development. However, the purpose of the report is to disclose pay gaps for certain groups. Employers can expect to learn more about the report’s contents this fall. Reporting deadlines vary depending on the number of employees and sectors:
  • November 1, 2023: the BC government and the six largest Crown corporations, which are BC Hydro, BC Housing, BC Lottery Corp., BC Transit, ICBC, and Work Safe BC
  • November 1, 2024: all employers with 1,000 or more employees
  • November 1, 2025: all employers with 300 or more employees
  • November 1, 2026: all employers with 50 or more employees

The introduction of pay transparency legislation in British Columbia is in step with a growing trend across Canada and other countries. One of the leading practices implemented in some jurisdictions in the United States—listing salaries or pay ranges in job postings—has influenced the pay equity legislation of some Canadian provinces.

Newfoundland and Labrador passed their Pay Equity and Pay Transparency Act last October, which is expected to be finalized by late 2023. The Act currently requires all employers in the public and private sectors to do the following:

• Job postings – employers must include the expected salary or pay range for publicly advertised job opportunities.
• Pay history – employers are prohibited from asking applicants about their pay history or retaliating against employees for disclosing information about their pay to other employees.
• Pay transparency report.

Similarly, Prince Edward Island incorporated transparency provisions to their Employment Standards Act, effective June 1, 2022. The new requirements are:

• Job postings – employers must include the expected pay or pay range for publicly advertised job opportunities.
• Pay history – employers cannot take action against employees inquiries about their pay, pay policies, or disclosure about their pay to other employees. In addition, employers cannot seek pay history information about an applicant.

Although Ontario passed a pay transparency bill in 2018, this legislation was never brought into force by the present government.

For employers regulated by federal jurisdiction, amendments to the Employment Equity Regulations introduced pay transparency obligations. Since June 2022, employers are required to provide aggregated pay gap information in their annual employment equity report.

We recommend that employers in BC, NL and PEI take the following steps in response to the new legislations:

• Update job postings: Ensure that your job postings include the expected pay or pay range in all publicly advertised jobs.
• Educate talent acquisition teams and hiring managers: Inform and train your talent acquisition teams and hiring managers on the prohibition on seeking compensation history from applicants.
• Communication and change management strategies: Develop robust communication and change management strategies to inform employees about the new legislation, its objectives, and the organization’s commitment to pay transparency.

In addition, for employers in BC, NL or federally regulated entities, we also recommend to:

• Start identifying gender-based pay gaps and discuss the next steps to address those gaps.
• Work on your communication and change management strategies.

Employers should view these new legislations as opportunities to review and enhance their broad-based pay practices and policies. The combination of new legislative requirement and labour shortages could uncover existing inequities in the pay structures of some employers. Therefore, consider conducting a thorough review of the following:

• Salary structures.
• Pay practices, to identify and eliminate unconscious gender bias.
• Job evaluations and job descriptions, to evaluate their accuracy and relevance.
• Understanding of your compensation philosophy, to assess your managers’ and employees’ understanding of your organization’s compensation philosophy.

By being proactive in reviewing and enhancing these areas, you can foster a more inclusive work environment while complying with the new legislations.

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