Are you ready? Province’s transparency act takes effect Nov. 1

Regulations of B.C.’s new Pay Transparency Act go into effect on Nov. 1, bringing in new requirements for employers around job postings and reporting of employee wages and pay equity.

All employers in B.C. will be required to comply with several measures outlined by the Act, designed to eradicate pay secrecy and make employers accountable for pay gaps in their workforces.

And while the intent of the legislation is necessary, the Act was implemented quickly and has left some employers with yet-to-be-answered questions, said James Kondopulos, senior partner at Roper Greyell in Vancouver.

“The Act has been set up for very laudable reasons … there is a systemic problem which has to be addressed, and this is the tool the government is using. The government's also been clear that the gender pay gap affects people in marginalized communities profoundly,” he told HRD.

“I will say that the way in which the government has rolled this out has been hurried, and has put a number of employers under a good deal of pressure,” he added.

Gender pay gap second highest in country

The Act, which was signed into law on May 11, was introduced to address B.C.’s gender pay gap which is the second highest in the country after Alberta, with women earning 17% less than men in 2022, according to a government release.

“All people deserve to be paid fairly and our communities are stronger when everyone is treated equally. However, too many women in B.C. are still making less than men,” said the B.C. government. “The pay gap also disproportionately impacts Indigenous women, women of colour, and immigrant women, as well as women with disabilities and non-binary people.”

As of Nov. 1, all publicly posted job openings must include expected pay ranges; no longer acceptable are such terms as “$20 per hour and up,” etc. For example, the Act suggests:

• $20 per hour
• $20-$30 per hour
• $40,000 per year
• $40,000 - $60,000 per year

Bonus pay, overtime, tips and benefits are not required to be posted.

Expected pay does not have to be included in general job postings, nor are openings that are not posted publicly. Plus, the Act does not prevent employees from negotiating higher wages outside of the posted range, or employers from paying them.

The Act also leaves the size of the wage ranges up to employers, an ambiguity which Kondopulos said some may leverage to maintain competition.

“An issue with the legislation from an employer perspective is, you're now publicly sharing salary and wage information,” he said. “How much of this information do you actually want in the public realm? How much of it do you want in your competitors’ hands? And what are you as an employer going to do, in light of those competitive concerns?”

Pay Transparency Act prohibits pay secrecy

The Act was introduced as Bill 13 in March of 2023, Kondopulos pointed out, and by May had been signed into law, with some parts going into effect immediately, including a rule prohibiting employers from asking potential hires what they were paid at other jobs. They can, however, use pay information they already have for that employee, and use publicly accessible information to assess pay from similar positions.

Also already in effect is a rule prohibiting pay secrecy. It is now illegal for an employer to fire, demote, suspend, discipline or harass an employee for asking about their pay or sharing what they earn with someone applying at the company or another employee.

Employees are also entitled under the law to provide pay information to the Director of Pay Transparency (a position which has not been appointed yet) about their employer.

Pay transparency reports to be phased in

Starting this year, the government will be phasing in a requirement for B.C. employers to submit pay transparency reports on Nov. 1 of every year, showing gaps in pay among certain groups.

Using the province’s Gender and Sex Data Standard, employers will need to collect gender and pay data from all employees, and post the results publicly, either on the company website or prominently in public areas where employees can access it. It will also need to be available to the public upon request.

Real wage data such as dollar amounts will not be required to be reported, but employers will have to report differences in hourly wages, overtime, benefits and wages, as received by women, nonbinary individuals, men and “unknown” individuals who either choose not to disclose their gender or do not identify as a particular gender.

Employers may also be asked to report the percentage of each group in earnings quartiles – the top 25% earners, mid-high 25%, mid 25% and lowest 25%.

This reporting requirement will be phased in over the next four years, with major Crown agencies beginning reporting on Nov. 1, 2023, employers with 1,000 employees or more beginning Nov. 1, 2024, with 300 or more beginning in 2025, and fifty or more employees starting Nov. 1 of 2026.

Although most employers will not need to begin posting pay transparency reports until at least 2024, it would still behoove organizations to begin tracking and collecting data around pay equity now, not only to comply with legislation, but as a matter of survival, said Kondopulos.

“Because how do you remain a viable business? How do you recruit, how do you retain, if you have those systemic differences on gender lines?” he said. “It's not only in the interest of meeting the requirements of the legislation, it's the right thing to do, and it's in the survival interest of the business.”