With a view to promote gender equality and pay equity in the workplace, the province of British Columbia passed the Pay Transparency Act on May 11, 2023, and will come into effect on November 1, 2023. This act is designed to provide greater transparency regarding employee compensation and the gender pay gap by placing new requirements on employers. The act applies to all employers in the province of British Columbia, regardless of size or business sector.
Key Details of the Pay Transparency Act
There are 4 main areas where the act creates changes: pay transparency and pay history, job postings, prohibiting retaliation, and pay transparency reporting.
Pay Transparency & Pay History
The Pay Transparency Act gives employees the right to request information about compensation in their workplace. Once an employer receives a request regarding compensation in the workplace, employers are required to provide the requested information within a reasonable timeframe. This allows employees to gain insight into how their pay compares to that of other employees where they work.
The Act also prohibits employers from seeking information on a potential employee’s pay history unless that information is publicly accessible. This means that employers will not be allowed to ask potential employees what they were earning at previous positions, nor use third-party background check providers to find out this information.
Under the Act, employers must include the expected pay or expected pay range for a position when posting job advertisements publicly. This allows job applicants to have a clear understanding of the pay associated with a particular role prior to applying for a job. This will allow job applicants to make informed decisions about their employment prospects and allow for a more balanced playing field when job hunting.
This requirement only applies to publicly advertised job postings. If the job posting is not public then an employer is not required to post pay information.
Prohibition on Retaliation
The Pay Transparency Act explicitly prohibits employers from retaliating against employees who inquire about pay or assert their rights under the Act. This is intended to ensure that employees feel safe and protected when seeking information about their pay, thereby encouraging open dialogue and the identification of potential wage disparities.
Examples of what conduct would be covered by this would include retaliation for employees who disclose their pay information to other employees or potential employees, employees who inquire about their pay of pay transparency report (discussed below), or asking the employer to adhere to their obligations under the Act.
The Act requires certain employers to submit annual pay equity reports to the provincial government. These reports must include information on the gender and other diversity characteristics of employees, as well as pay data broken down by job category.
The reporting requirements are being implemented in stages. They will first apply to large employers, including the government and large employers. In the coming years the reporting requirements will apply to other employers, currently on the following schedule:
- By November 1, 2024 it will apply to employers with 1,000 employees or more
- By November 1, 2025 it will apply to employers with 300 employees or more
- By November 1, 2026 it will apply to employers with 50 employees or more
What The Pay Transparency Act Means Going Forward
The Pay Transparency Act comes into effect on November 1, 2023 and will have significant implications for both employees and employers in British Columbia. Employers should familiarize themselves with their obligations under the Act and anticipate the changes to their hiring processes that will arise in light of these legislative changes.
If you have any questions about the Pay Transparency Act and how it may impact you, contact one of our experienced employment lawyers today.