The British Columbia Pay Transparency Act: What Your Company Needs to Know and Do

British Columbia recently passed the Pay Transparency Act, a legislation that aims to promote pay equity and pay transparency in the workplace. As a background to this piece of legislation the BC Government had previously reported that, women in British Columbia earn 87 cents for every dollar earned by men, and the gap is even wider for indigenous, racialized, and disabled women.

This piece of legislation was enacted to address these systemic type discrimination in pay based on gender, ability, race, ethnicity or other protected identities. The Act seeks to eliminate the pay differences among the identified groups and ensure that employees and job applicants are paid fairly and equitably.

The Act brings in new rules and obligations for all provincially regulated employers in British Columbia, regardless of their size or sector.

Under the Act, the role of Director of Pay Transparency, was created and this role will oversee the implementation and enforcement of the Act. In reviewing the Act, there are three main themes in the legislation;

• Requirement for including expected pay range information on publicly advertised jobs,
• The prohibition of pay history inquiries, and
• The requirement on BC regulated companies to prepare and post pay transparency reports.

Expected Pay Range Information

Beginning November 1, 2023, all employers in British Columbia are required to include the expected pay or the expected pay range for a specific job opportunity that they advertise publicly. Jobs that are not advertised publicly do not need to have or contain pay information.

Prohibition of Pay History Inquiries

The Act prohibits employers in BC from asking job applicants about their pay history information or retaliating against employees who discuss their pay with others.

This is important as a lot of pay based discrimination often start from the recruitment stage especially in the request for pay history information which includes money, salary, wage or commission that is paid or payable to an employee. However, the Act in Section 3 does not prohibit employers from using pay history information that is already publicly accessible. The rationale behind this prohibition is to prevent employers from basing their pay decisions on the previous or current pay of an applicant or employee, which may itself reflect historical or ongoing pay discrimination. Instead, employers are encouraged to use objective criteria, such as skills, qualifications, experience, and responsibilities, to determine the appropriate pay for a position.

Requirement to Prepare and Post Pay Transparency Reports

The Act also requires a reporting employer on or before November 1 of each year to prepare a pay transparency report that contained the prescribed information and in the prescribed format. The Act has not yet specified the details of what must be included in the pay transparency reports, but the government has advised that employers will be required to report the pay gap as the difference between hourly wages, overtime and bonuses received by men, women and non-binary employees as well as collect gender information from their employee.

More information should be available for the specific content of the report once a regulation is made further to the Act. Unless exempted by the regulation, the reporting requirements of the Act will apply in stages over the next four years, depending on the number of employees a company has;

• November 1, 2023: B.C. 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 employees or more
• November 1, 2025: all employers with 300 employees or more
• November 1, 2026: all employers with 50 employees or more

The reports will be posted on the employer’s website and submitted to the Director of Pay Transparency.

Benefits and Challenges of the Act

The Act is expected to have several benefits and challenges for employers and employees in British Columbia. Some of the potential benefits which may be observed when the Minister in charge of the implementation of this Act conducts an effectiveness review in 5 years (see Section 11) are:

• Reducing pay discrimination and promoting pay equity among diverse groups
• Increasing employee satisfaction, motivation, and retention
• Enhancing employer reputation and attracting talent
• Improving transparency and accountability in pay practices
• Aligning with the best practices and standards in other jurisdictions

Some of the potential challenges are:

• The Act increasing administrative and compliance burden and costs for British Columbia employers,
• Non-compliance could potentially expose employers to potential litigation and penalties,
• It creates a privacy and confidentiality issues for employees and employers particularly the requirement to collect employee gender information. But note that employees      can legally refuse to provide such information,
• It may potentially stir pay dissatisfaction and conflict among employees,

Recommendations for Employers

To prepare for the new Act and its requirements, employers in British Columbia should take the following steps:

• Communicate with their employees and applicants about the new Act and its implications,
• Review their compensation policies and practices and ensure they are consistent, fair, and objective,
• Review their recruitment and hiring processes and remove any questions or references to pay history,
• Conduct pay equity audits and identify and address any pay gaps or disparities among diverse groups,
• Educate their managers and supervisors on the new rules and obligations and train them on how to handle pay inquiries and discussions, and
• Monitor and update their pay transparency reports and comply with the deadlines and standards.

The BC Pay Transparency Act is a significant and progressive legislation that will have a profound impact on the workplace culture and dynamics in British Columbia. Employers should be proactive and diligent in complying with the new Act and its requirements, as well as in fostering a culture of pay equity and pay transparency in their organizations.

Arcstone Law Corporation can assist employers in British Columbia in carrying out a comprehensive review of their policies to see if they are compliant with this Act and recommend effective and compliant changes. We are also available to help business initiate a compliance audit in this regard to test readiness for compliance. You can contact us admin@arcstonelaw.com. All legals services are rendered through the law corporation.