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How B.C.'s new pay transparency law will reshape the job market

Legislation targets pay inequity, and could help with hiring and employee engagement.
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Don Murray, co-CEO and co-founder of Safe Software, said the company has benefited from sharing salary ranges for each position – a practice they started 19 years ago

As of this month, some of B.C.’s biggest employers must list in their job ads the pay range that exists for a particular position, in accordance with the province’s Pay Transparency Act, which passed in May and aims to address discrimination in the workplace.

Though new regulations can create uncertainty, B.C. businesses and human resource professionals say new pay transparency rules are a step toward a healthier and more equal job market, and will increase hiring efficiency along with employee retention and engagement.

“I see it as positive,” said Naz Kullar, board chair of CPHR BC & Yukon and a human resources director with The Trotman Auto Group.

“Everyone will know what the salary ranges for every position is so there is real transparency. This is going to foster a more equitable and harmonious work environment for us all and reduces discrimination in the workplace.”

According to Statistics Canada, women in B.C. are on average paid 17 per cent less than men. The pay gap is even larger for Indigenous women, women from visible minorities and immigrant women.

B.C.’s Pay Transparency Act also prohibits employers from asking job candidates to disclose their pay history. Instead, compensation for a position can depend on the company’s salary band, as well as industry standards.

“This is going to empower people to feel confident about the salary ranges they’re being offered. They will be more informed about the decisions they’re making about their careers, and the compensation that goes with it,” said Kullar.

Starting Nov. 1, the provincial government and B.C.’s six largest Crown corporations are required to publicly post reports about their gender pay gap. This requirement will extend to large employers next year, and eventually to small employers in 2026.

More hiring efficiency and employee retention

For businesses not used to discussing compensation and salaries openly, adjusting to pay transparency rules may take time. But the long-term benefits to business and industries will outweigh any short-term discomfort, according to Cheryl Nakamoto, managing partner for McNeill Nakamoto Recruitment Group.

Ultimately, posting salary ranges will help job applicants make more informed decisions, and will help companies identify with candidates that share their salary expectations.

“Then you’re not wasting time screening all these candidates that maybe want to earn more,” said Nakamoto. “You get a more targeted response.”

Surrey-based tech company Safe Software implemented pay transparency policies – including open salary ranges for each position – 19 years ago. Talent engagement and retention has been the biggest benefit, they say.

“Our people are everything so we want to maintain the best people we possibly can. We thought long and hard and the benefits far outweigh any perceived drawbacks. And really, there hasn’t been any drawbacks,” said Don Murray, co-CEO and co-founder of Safe Software.

Employees at Safe Software spend an average of nearly seven years in the company. This is well above the Canadian average job tenure of five years, according to 2022 data from Statista.

More than one in four of Safe Software’s employees have worked at the company for more than a decade.

“Because it’s fair, so our employees are not worrying that maybe somebody else is getting special treatment because they know the band that they’re in,” said Murray.

If an employee wants a higher pay band, they can work toward ensuring they meet the job requirements for higher-paid positions. This, said Murray, can help motivate employees to grow their career at the company.

Balancing pay equity and confidentiality

Whether B.C.’s new pay rules will reduce pay inequity by requiring greater pay transparency remains to be seen. One immediate impact could be that some employees find out what others make and become unsatisfied with their current pay, said Kullar, adding that it is therefore important for employers to engage and communicate with their employees.

Some companies may be more affected by the act than others. For example, smaller businesses that can’t offer salaries as competitive as those offered by some larger companies may struggle to attract talent.

Those offering less pay will need to consider other forms of compensation.

“One of the advantages that small businesses have is they get to actively talk about the perks and the flexibility that they offer over some of the larger employers,” said Kelli Paddon, B.C.’s parliamentary secretary for gender equity.

Perks can include better work-life balance, more opportunities for advancement, a positive company culture and flexible work arrangements, according to Kullar.

At the same time, it may be possible for companies subject to the act to obscure compensation. For example, the act doesn’t specify how wide a salary range in a job post should be.

“You might see [businesses] doing potentially bigger ranges if they put a posting out for a certain job,” said Nakamoto, adding that the range therefore might not be a very helpful indicator of the pay a candidate could expect.

Certain businesses with more complex compensation structures and commission-based sales positions, for example, may face challenges in balancing pay transparency and accuracy.

The BC Chamber of Commerce has said it will work with the province to ensure that the drive towards pay transparency and equity will be balanced with “ensuring confidentiality for individuals and businesses, and non-onerous reporting requirements.”

Often when new regulations are introduced, some businesses feel apprehensive about the requirements and obligations placed on them and the steps they will need to take to comply,” wrote Fiona Famulak, president and CEO of the BC Chamber of Commerce, in a statement.

“We will be watching carefully and listening to our members. In the event concerns arise, we will advocate on their behalf to find a better balance.” 

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