HR Ink

Pay transparency continues to become a hot topic in Canada as the workforce is more open and ready to have discussions about their pay. Before this year, only three provinces have embraced this new trend – British Columbia, Newfoundland and Labrador, and Prince Edward Island. In British Columbia, there is legislation for pay transparency, but no penalties yet for organizations that do not follow it. However, for the other two provinces, they have legislation and penalties to enforce their laws.

On March 21, 2024, Ontario was next to join this trend. Bill 149 is the talk of the town and much of that has to do with the requirement it puts on employers to post the compensation ranges for the jobs they are publicly posting. While this alone is not as significant as the pay transparency legislation in other provinces, it is a step in the right direction. It also signifies that Ontario has become more serious about pay transparency and I would expect that there will be further legislation to support the movement towards pay transparency going into 2025.

Before I outline what steps you can take to prepare your organization to become pay transparent, lets take a look at the goal of it first.

The Impact of Pay Transparency

The impact pay transparency can have on an organization is massive. Firstly, it will help reduce pay discrimination. When employers are open and honest regarding their compensation, they are required to be more accountable for how they determine their pay bands and ensure that they are fair with how they are compensating their employees.

Secondly, it decreases any secrecy or rumours in the workplace. When everyone is privy to this information, there is less uproar and gossip regarding another individuals pay. This in turn improves morale and trust with the employer. The employer and employee relationship greatly benefits, which helps with retention rates.

Lastly, a company that promotes pay transparency is likely to attract top talent. Many individuals look for a company that is fair and provides competitive compensation. Employers adding this to their job postings will have more options of top candidates. 

Even though this is a change for the better, there are still potential drawbacks. Pay negotiations could become more challenging, it could reduce productivity amongst employees, and it could make smaller organizations less competitive in the job market.

Overall, it is easy to see the potential positive impact pay transparency can have on most employers, which is why HR professional should be advocating for it.

Steps to Help Your Organization Become Pay Transparent

Pay transparency is here and it will continue to end 2024. For HR professionals, this is your time to be proactive and start initiating steps to becoming pay transparent rather than waiting for legislation to pass and having to react. With that said, here are steps to help your organization become more pay transparent:

1. Review Bill 149

If you have not already, now is a good time to read up on the changes Bill 149 brought. For more information on the changes from Bill 149, you can check out my blog on it here.

2. Become Familiar with Pay Transparency Legislation in British Columbia

It is likely that Ontario will be following in the footsteps of British Columbia. Therefore, this is the best time to be proactive about it and get ahead of the game!

3. Conduct Compensation Audit

You want to ensure that your compensation for employees within each department is fair. If there are any discrepancies, now is the time to fix it.

4. Establish/Analyze Pay Ranges

This will help with being able to include your pay ranges on your job posts and internally (if this is the route you choose). You can use resources such as Mercer, Sequoia, Payscale, or review what your competitors are offering.

5. Total Rewards Document

This is more of a recommended step as it would be helpful to prepare a total rewards document for employees in your organization that will help them understand the pay range provided for their position and where else they are compensated (ex. benefits, bonus, profit sharing, etc.) besides just their salary.

6. Train Managers for Compensation Discussions

This is a big one as usually managers are responsible for recommending increases and having compensation discussions with those on their team. With pay transparency, these discussions will be more frequent, so it would be best to prepare them with training sessions on how to appropriately have these conversations.

7. Survey

A survey for a few months down the line once you have implemented pay transparency will help you find out how satisfied many of your employees are and where you may need to make some improvements.