ENSURING EFFECTIVE PAY EQUITY RULES AND REGULATIONS (2023)

Issue

Wage inequality is a serious issue that should be eliminated. Pay equity is a primary right for all workers in Canada. It is unacceptable for individuals to be paid differently based on their sex, race, religion, or physical abilities. Collecting and publishing pertinent data is a powerful tool to help evaluate the value of a job to a business.

However, the protection of individuals’ confidential information, including salary, must be of paramount importance. In addition, keeping confidential information that could negatively impact a company’s competitive business position must also be given careful and thoughtful consideration as the regulations are developed and implemented.

While the new requirements will impact the largest private sector employers in 2024 and beyond, the requirements to report are going to add costs and complications to businesses that are adding to the growing costs of doing businesses in the province.

Background

In 2021, female employees earned 11.1% less per hour than male employees, with the wage gap little changed compared with 2020.

Among employees aged 25 to 54, the gender wage gap decreased 7.7 percentage points to 11.1% from 1998 to 2021. Wages grew faster for core-aged women than for core-aged men over this period. Specifically, the average hourly wages of female employees increased 28.6%, while male wages increased 17.4%.[1]

The B.C. Government passed Bill 13 –Pay Transparency Act in March 2023. One of the goals of this act is to introduce new, and potentially onerous, tools to ensure pay equity in the province, despite the fact that the data proves this gap is narrowing and will continue to narrow. By 2027 all private businesses in the province of British Columbia with more than 50 employees will be required to produce a Pay Transparency Report that will be available publicly.

Though well meaning, this Act could have unintended consequences. Instead of creating wage parity it may undermine private enterprise confidentiality and competitiveness. Depending on the business, individual salaries for employees may be identifiable to a particular worker disrupting workplace cohesion.

Two jobs may have similar titles yet are not ‘equal’ in terms of value to the company because duties, experience, uniqueness of each individual skill set all determine an employee’s value, and therefore, compensation. Though some roles may seem genderized, different roles may seem to exhibit wage inequality, but the required skills and attributes of each role are the determinant of the compensation and not the sex of the individual doing that role. Said another way, the value of a role is not simply based on a job title, but on the actual value of the labour to the profitability of the company.

Further, the release of private and confidential business must be protected. Labour is often a significant, if not the single highest costs for a commercial enterprise. Allowing this information to become public, even in aggregate, could negatively impact a business by its competitors. Just as government must withhold confidential business information under the Freedom of Information and Protection of Privacy Act, similar protections need to be established for the obligations of government under the Pay Transparency Act should not be forced by the government to supply competitive information into the marketplace.

THE CHAMBER RECOMMENDS

That the Provincial Government:

1. Undertake direct consultations with businesses and industry associations, including the BC Chamber of Commerce, in the development of the regulations and ensure they balance: delivering pay equity, an individual’s right to confidentiality, protecting businesses competitive interests, and costs to collect and report data.
2. Ensure any information collected by the government that would harm a business’ interests be keep confidential unless the business agrees to its disclosure.
3. Support the development of best practices and tools, such as criteria to measure the value of each role to the profitability of their company, to enable companies to adjust their pay structure to ensure they are not contributing to pay inequality.