Pay Transparency Act – Update and Requirements

By Chris Bettencourt & Gregory Scott

Purpose Of The PTA

The Pay Transparency Act (the “PTA”) that came into effect on November 1, 2023, places new reporting and disclosure requirements on employers. The PTA and related pay transparency regulations (the “Regulations”) are intended by the provincial government to close the gender pay gap in BC. Currently, all employers operating within the province, irrespective of size or structure, must meet the minimum requirements set out in the PTA and the Regulations. This means that employers must update their hiring practices to ensure publicly posted job advertisements comply with the new legislation. Certain employers must also now prepare, complete, and post a Pay Transparency Report by November 1, 2024. The new legislation will impose additional requirements on the employer to properly collect and process pay rate information and identify differences in the prescribed gender categories.

What Are The Obligations Of The Employer?

Currently, the following obligations apply to every provincially regulated employer operating within the province of BC:

A. Publicly Advertised Job Opportunities

When posting a publicly advertised job opportunity, an employer must specify the expected salary or wage (i.e. $30 hourly, or $60,000 annually), or the expected pay range for that position. Currently, the PTA does not provide any limits on how wide the advertised pay range may be.

B. Pay History Information

An employer must not ask job applicants to provide any information relating to their pay in other positions with other employers. The employer is also not allowed to request pay information from a job applicant’s past employer or from any other third party that may have knowledge of the job applicant’s pay history.

C. Prohibited Actions by Employers

An employer must not discipline an employee for reasons relating to the pay of any of its employees. This includes dismissing, suspending, demoting, harassing or otherwise disadvantaging an employee, or threatening to take any of these actions, because an employee has: (i) asked their employer about their pay; (ii) told another employee or job applicant about their pay; (iii) asked the employer about its Pay Transparency Report; or (iv) made a report to the Director of Pay Transparency about their employer.

What Is Pay Transparency Reporting?

All employers that fall within the definition of a “reporting employer” are subject to the pay transparency reporting provisions and required to post a “Pay Transparency Report”. The definition of reporting employer is determined by the number of employees that the employer has on January 1 of each year, and is set to expand each year as follows:

1. employers with 1,000 employees or more for 2024;
2. employers with 300 employees or more by 2025; and
3. employers with 50 employees or more by 2026.

In 2027, employers with 49 or less employees may also become subject to the requirements, but that has yet to be set by the provincial government in the Regulations.

Preparation of Pay Transparency Reports

By November 1 of each given year, all reporting employers must prepare, complete and publicly post a Pay Transparency Report that reports the gaps in pay for certain groups. A Pay Transparency Report must contain basic company and contact information of the employer, as well as details about when and how the Pay Transparency Report was produced. A reporting employer is required to identify and calculate the mean and median hourly rate of pay, amount of overtime pay, number of overtime hours, and the mean and median amount of bonus pay across the different prescribed gender categories.  

Calculation and Conclusion of Information

After collecting, calculating, and categorizing the required information, a reporting employer must rank all its employees from the lowest hourly rate of pay to the highest hourly rate of pay, then divide the employees into four equal (or close to equal) segments. For each of these segments, the employer must then specify the percentage of employees who are in each of the prescribed gender categories. Employers will be required to provide a description of trends in the workplace as it relates to pay disparity amongst the different prescribed gender categories.

All this information is then required to be disclosed within the reporting employer’s Pay Transparency Report for that given year and posted to the employer’s website. A reporting employer is obligated to make reasonable efforts to collect the required information from each of their employees. Further, a reporting employer is required to provide each employee an opportunity to disclose, update, or make additions to information provided to the employer, at least once per year.

The province is currently developing an online reporting tool to assist employers with meeting these reporting obligations.

Please note: This article is provided for general information purposes only and does not contain legal advice. If you would like advice on your specific circumstances, please contact one of our legal professionals.

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If You Have Questions, We Can Help

If you’re an employer in British Columbia and have questions about the Pay Transparency Act or other laws and obligations that apply to your business, our Lawyers are here to help. Please don’t hesitate to reach us at 604.581.7001 or by using the contact form below.