New Pay Transparency Requirements Coming into effect in B.C.

Starting November 1, 2023, B.C. employers will need to comply with certain new pay transparency requirements outlined in Bill 13 – 2023 Pay Transparency Act (the “Act”).

The Act—which seeks to promote wage equality and eliminate pay disparity between groups of workers—received Royal Assent in May 2023 and certain aspects of the Act came into effect at that time. Since then, employers have been prohibited from seeking pay history information from job applicants unless the pay history information is publicly accessible. It also immediately prohibited Employers from dismissing, suspending, demoting, disciplining, harassing or otherwise disadvantaging an employee (or threatening to do so) because the employee:

• made an inquiry to the employer about their pay or a pay transparency obligation;
• disclosed information about their pay to another employee or job applicant;
• asked the employer to comply with its obligations under the Act; or
• made a report to the Director of Pay Transparency about employer compliance.

These changes represented the beginning of a sea change for many employers’ internal processes and employee expectations about pay transparency across the province.

Mandatory Wage Disclosure

On November 1, 2023, other provisions of the Act will come into effect, including requirements for publicly advertised job postings. For many employers, these new obligations will be the most notable changes brought forth under the Act and will prompt the most significant change to their recruitment and hiring processes.

As of November 1, every job posting that is publicly advertised in British Columbia will have to disclose the proposed wage or wage range for the job, as well as any other information prescribed by regulation. This requirement does not apply to job opportunities that are not posted publicly or general recruitment campaigns that do not reference a specific job opportunity.

The wage disclosure requirement will be welcomed by employee advocate groups across the province – and those same groups will likely pressure other provincial governments to pass similar measures.

Pay Transparency Reports

Additionally, beginning in November 2023, certain employers will be required to prepare and make available to employees—as well as members of the public, if requested—an annual pay transparency report. The specifics of this report will be outlined through a reporting tool introduced by the Ministry through regulation, which is expected to be published sometime in the Fall 2023.

The obligation to prepare Pay Transparency Reports will not impact private sector employers for some time. The obligation is being phased in over the next 4 years, starting with certain public sector employers, via the below prescribed reporting thresholds:

• By November 1, 2023: the 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;
• By November 1, 2024: all employers with 1,000 employees or more;
• By November 1, 2025: all employers with 300 employees or more;
• By November 1, 2026: all employers with 50 employees or more; and
• By November 1, 2027, all B.C. employers.

What does this mean for employers?

Persistent wage disparity—often resulting in lower wages for women and visible minorities—has been a topic of ongoing discussion among advocates and elected officials. The Act seeks to reduce this disparity by providing employees with additional information and empowering them take a more active role in their compensation conversations with employers.

Conversely, that means employers will need to be prepared for increased employee engagement regarding compensation-related discussions. Employers will also need to have robust policies in place to guide and document compensation discussions. Finally, employers will need training programs for hiring managers to ensure those individuals don’t inadvertently run afoul of legislation during offer negotiations.

All this being said, it is noteworthy that the Act does not currently set out penalties for noncompliance with any of its requirements nor does it designate a particular body to investigate or discipline employers, so it is unclear what enforcement of the Act may eventually look like. Further, the Act does not oblige employers to actually disclose any inequities in pay, nor to take active pay equity measures. At present, the recourse for BC employees experiencing discriminatory treatment in relation to pay largely remains through a human rights complaint. We expect this will be addressed in future regulations but for the time being, employers will remain somewhat in the dark as to what the new reality will look like.

For more information on the Act and future regulations—or to discuss how your business can prepare—please contact Matthew E. McCarthy of our employment group.