Implementing Pay Transparency
Shawnee Love • May 1, 2023
If you read our last blog on pay transparency, you will know I have some concerns about the likelihood this highly fashionable initiative will reap the benefits it is sold as having.
Nevertheless, it is coming and we need to get ready for it. Even if you expect to have less than 50 people in 2026, as more and more organizations have to tow the line, I believe it will become an expectation which eventually will be placed on all employers by the market in general. E.g., candidates and employees will ask and advertising sites will make the information mandatory.
That being the case, here is what we suggest employers do to get ready for each part of the pay transparency program. But keep in mind, we don’t know yet how deeply the BC government will go with their directives on any of these components, so while we hope this will get you started, we will provide updates when we know more.
Pay in advertising
The government has told us we will need to include the expected pay or pay range for all advertised jobs. Of course if you don’t advertise (e.g., you only promote from within or ask for employee referrals, etc.) you don’t have to worry. But honestly, having clear pay ranges, recognizing which jobs are of comparable value within your organization, as well as an understanding of what someone needs to do or have to move to the next level are good practices and helpful information anyway. As such, we are excited for employers who will now have the nudge they needed to develop their understanding in these areas. Having clarity of ranges/ rates enables employers to move quickly to make offers and/or give raises fairly which we know are two strong advantages in attraction and retention of employees. So, step one is to figure out what the rates of pay are for each position. There are many different methods of doing this (no one best way and don’t let anyone tell you otherwise), so figure out the right way for your organization and let this be the encouragement you need to get working on this practice.
The new legislation prevents employers from asking future hires about their pay history. To be honest, this seems like a pretty invasive question (one that I haven’t come across in eons), but if hiring managers are still asking it, the legislation will provide a hard stop. I am not even certain we will need to replace this question since the new rate of pay or range will be published. You might just want to confirm the candidate is aware of the rate of pay going forward.
If this law is enacted, employers won’t be able to punish employees for talking about pay. Since millennials made pay discussions common, I haven’t seen much punishing going on, but employers may need to update their practices and documentation which instructs employees that discussing compensation is a policy violation. Thus, take the time now to review your compensation program documents, policies and procedures, and maybe even employment contracts. The opportunity for employers is to get ahead of pay discussions amongst employees and lead the conversation about pay. Topics to address include:
- how pay is determined/ offered,
- when and/or how to get raises, and
- what accounts for differences in pay.
These conversations can be very nuanced and difficult which means they are best held face to face and with enough foresight to offer time to return with more questions.
Again, we don’t know exactly what will be asked, but knowing this is a pay equity effort, we can expect that employers will need to keep data on gender and pay rates as well as jobs and job groupings. The good news is we have most of this data in our payroll systems, but it will take practice to look at this data holistically rather than person by person.
We are here to assist with updating your tools and methods as well as offering in house training for managers and team members to help prepare for the new legislation and will be providing updates as more information comes to light.