Canadian employers are increasingly focused on gender awareness, advocacy, and equity, with the fight against the gender pay gap taking centre stage.
Despite significant strides toward equality in the workplace, pay disparities persist, leaving women, particularly those from marginalized communities, at a disadvantage.
Recognizing the urgency of the issue, lawmakers have introduced legislation aimed at tackling the gender pay gap and enhancing transparency in compensation practices.
Learn about the pay Transparency Act to understand its key aspects, significance, and ways for employers like you to implement transparent pay policies.
the pay transparency act: a game-changer
The Pay Transparency Act of British Columbia, passed on May 11, 2023, makes it mandatory for both public and private sector employers to disclose and report salaries.
This law aims to combat workplace discrimination, and it's part of a growing trend of pay transparency regulations in Canada.
But this push to reduce pay disparities for historically disadvantaged groups extends beyond Canada.
In the United States, several states and cities have similar laws requiring salary disclosure. There's also a federal law in progress called the Salary Transparency Act that would make it mandatory for job postings to include wage information.
In Europe, the Pay Transparency Directive was approved in March 2023 and will start in 2024.
It gives people the right to know about pay, and makes public and private employers in the EU share salary details before hiring.
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why are pay transparency laws needed?
Fair pay and equal treatment strengthen our communities. But, in Canada, women still earn less than men, and this inequality has a greater impact on Indigenous women, women of colour, immigrant women, as well as women with disabilities and non-binary individuals.
In fact, women of colour on average make only 59% of the wage of white men. And when it comes to women and gender-diverse people living with a physical disability, only 16% report being compensated fairly compared to their peers.
But while laws and policy changes make a marked difference, employers can also play a role in protecting their workforce from pay inequity.
implementing pay transparency strategies
disclose salary range
This ensures that prospective employees have access to critical information about the compensation they can expect for a particular role.
It eliminates the guessing game of negotiating salaries in the dark, leveling the playing field for all applicants.
include compensation metrics in job postings
On top of salary ranges, make sure your job description includes all other components of your compensation package, such as bonuses, benefits, and equity grants.
This transparency empowers jobseekers to make informed decisions and fosters a culture of fairness and accountability among employers.
plan for regular compensation data updates
Salary ranges should remain accurate and reflective of market conditions. Frequent updates prevent pay disparities from creeping in overtime and demonstrate a commitment to fairness.
This process can include systematically:
- collecting and analyzing current employee pay information,
- analyzing gender-based gaps and trends,
- and conducting market research to benchmark salaries
make a difference by paying the appropriate salary rates
Want to know more about salary ranges or discover what drives talent away?get the salary guide
correct discrepancies fairly
Adjustments may take different forms, depending on the nature and extent of the pay disparities.
Some common approaches may include:
- base salary adjustment,
- bonuses and incentives,
- benefits and perks,
- or a one-time adjustment.
It’s crucial to be transparent with affected employees about the adjustments made. Clearly communicate the reasons behind the changes and how they are determined.
provide salary negotiation training
When you empower your employees to negotiate their salaries—it's a win-win. First, it helps attract and retain top talent.
Plus, it evens out pay gaps, boosts job satisfaction, and enhances communication skills and confidence. Knowing how to negotiate can help employees feel more self-assured and satisfied at work.
Training can be offered through workshops, online resources, and role-playing exercises in a supportive environment. In the end, this leads to a more engaged and motivated workforce, and long-term organizational success.
encourage open dialogue
Encouraging open discussions about salaries and benefits can greatly benefit your team's culture.
It fosters trust and morale among employees, leading to smoother negotiations and a more equitable workplace. It also minimizes concerns about favouritism or unfair treatment, which can cause tension in any organization.
establish a diversity, equity, and inclusion committee
DEI committees bring diverse perspectives and expertise to objectively:
- assess pay practices,
- mitigate unconscious bias,
- develop policies,
- analyze data,
- advocate for employees,
- ensure legal compliance,
- and enhance accountability.
They also contribute to employee engagement, public image, and sustained organizational growth by promoting fairness and inclusivity. Make sure to communicate the committee's role and contributions to employees and stakeholders, reinforcing the organization's commitment to creating an equitable and inclusive workplace.
Achieving gender equity in compensation is not just a legal obligation for many employers, but a moral imperative that strengthens workplaces.
By adopting transparent compensation practices, organizations can contribute significantly to closing the gender pay gap.
Employers must also recognize that pay disparities not only perpetuate inequality but also hinder organizational growth and success.
A diverse and inclusive workforce, where every employee is compensated fairly, is more engaged, productive, and loyal. This, in turn, fosters innovation, creativity, and a competitive edge in the marketplace.