Canada: British Columbia Introduces New Pay Transparency Legislation

On February 15, 2023, the Government of British Columbia introduced Bill M 205 – 2023: Equal Pay Reporting Act (the Bill). This Bill creates a framework to allow the public to assess the gender pay gap of certain employers by requiring those employers to disclose the mean and median pay of male and female employees. Thus far, the Bill has received First Reading, and only limited details are available.

WHAT WE KNOW

In its current form, the Bill requires employers with more than the prescribed number of employees to disclose the mean and median pay of male and female employees to a designated registrar. If an employer meets or exceeds the prescribed threshold, gender pay gap information must also be published on the employer's website and the website designated by the registrar. To date, the BC Legislature has not introduced any regulations to accompany the Bill, so the number of employees required to trigger the disclosure obligations remains unknown.

ORIGINS

In the "Explanatory Note" accompanying the Bill, the BC Government has indicated that the Bill is based on the gender pay gap reporting regulations currently in effect in the United Kingdom. For private sector employers in the United Kingdom, the reporting threshold is a headcount of 250 or more workers on April 5 of a given year. It is currently unknown whether this same threshold will be imported into the Bill in the event that it becomes law.

PAY TRANSPARENCY LEGISLATION IN OTHER PROVINCES

To date, only Prince Edward Island (PEI) has enacted pay transparency legislation. Employers in that province are prohibited from seeking pay history information from job applicants and cannot take reprisal action against an employee in relation to pay transparency. Moreover, employers in PEI must disclose the expected pay or range of expected pay in publicly advertised job postings. The Government of Newfoundland and Labrador introduced pay transparency legislation in October 2022, prohibiting employers from seeking pay history information from job candidates and requiring that they include expected pay ranges in job postings. The portions of such legislation applicable to private sector employers have not yet come into force. The Government of Manitoba similarly introduced pay transparency legislation in April 2022. The proposed legislation would require employers to include pay information in publicly advertised job postings and require private sector employers with more than 100 employees to file a pay audit report with the pay equity commissioner. Such legislation has not yet received Royal Assent or come into force.

WHY IS THIS IMPORTANT FOR EMPLOYERS?

In the last few years, the compensation gap between men and women who do the same work has become a heavily publicized topic of discussion. There has been a slow but steady shift to not only recognize the existence of pay inequity but to invoke within employers a desire to actively close the gap. Requiring employers in British Columbia to publicly disclose the mean and median pay of male and female employees is a step towards closing this gap.

As the Bill is still in its infancy in the legislative process, we will continue to monitor its progress and provide updates as further information becomes available.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.