Pay Transparency Act

Trish Altass, MLA Tyne Valley- Sherbrooke
Official Opposition Critic for Economic Growth, Tourism and Culture

In 1975, PEI passed the Human Rights Act, which prohibited discrimination in pay. [1] In 1988, PEI passed the Pay Equity Act, which sought to achieve pay equity in the public sector. [2] Despite greater economic participation by women and the advancement of more women into senior positions, the gender wage gap persists as an issue. As a result, women have less take-home pay than men.

Current Situation

Statistically, PEI has one of the lowest gender pay gaps in Canada, with women who are full time workers making $46,855, compared to $55,726 for men. [3] [4] However, as experts have noted, there are certain factors that might affect our pay gap including the comparatively large size of our public service, low wages relative to the rest of the country, and a failure to quantify the value of unpaid labour like childcare and eldercare. [5] A recent statistical review found that women on PEI are more likely to have higher levels of education than men, and that two-thirds of students enrolled at UPEI are women, yet PEI women earn less than men on average. [6] Government has the opportunity to correct this disparity and truly make PEI a leader in pay fairness and equity.

The need for pay transparency

Workers and advocates around the world are stressing the need for increased protections for workers and increased transparency by employers to reduce and eliminate wage gaps. Various governments are considering the creation or expansion of pay transparency requirements as a way to close these gaps, and though the specific details may vary from jurisdiction, the general principles are similar. These principles may include requirements for sharing salary rates and ranges in job postings; restrictions on asking prospective employees for past compensation; prohibiting reprisals against employees for discussing and inquiring about compensation levels; and reporting requirements for mid- to large-scale firms that would assist these firms and governments in assessing the gender pay gap and taking remedial action to correct any gaps.

Through the adoption of pay transparency measures, governments seek to prevent employer practices that disadvantage workers while improving the bargaining power of workers, particularly women and other disadvantaged groups, in negotiating for better wages. The European Commission notes:

“The asymmetry of information between employees and employers about pay may give a negotiating advantage to the employers (from hiring time onwards). When employees do not have access to information that would allow them to understand the relative value of their labour, they are unable to negotiate successfully for fair wages. Indirectly, a lack of information on pay levels across organisations, sectors and regions/countries discourages workers’ mobility and contributes to horizontal gender segregation.” [7]

Glassdoor’s 2015 research report, Is Salary Transparency More Than a Trend?: Economic Research on the Impact of Greater Workplace Transparency found a number of benefits associated with greater pay transparency. These included smarter job search and improved quality of job matches, boosts in the number of female job applicants, improved efficiency in labour markets, and greater employee productivity and engagement. [8]

Our proposal

In Canada, pay transparency legislation has been passed by Ontario (though not yet proclaimed) and by the Canadian government for federally regulated workplaces. Our standalone bill is modeled on Ontario’s Pay Transparency Act, and it would:

• Require public job postings to include the salary range for the advertised position;
• Prohibit employers from inquiring about a prospective employee’s past compensation (to prevent pay discrimination in a previous workplace from informing a worker’s future compensation);
• Protect employees who discuss their compensation with other employees from reprisals by their employer;
• Require larger employers (proposed as employers with 100 or more employees) to file annual pay transparency reports with government to demonstrate they are achieving pay equity.

Islanders are invited to submit their comments directly by email at officialopposition@assembly.pe.ca or by telephone at (902) 620-3977.

Deadline for submitting feedback is 5 pm on Thursday, September 30, 2021.

Footnotes:

[1] See section 7: https://www.canlii.org/en/pe/laws/stat/rspei-1988-c-h-12/latest/rspei-1988-c-h-12.html

[2] https://www.canlii.org/en/pe/laws/stat/rspei-1988-c-p-2/latest/rspei-1988-c-p-2.html

[3] McEachern, Terrence. “P.E.I.’s gender wage gap ranks first in Canada”. CBC News. 5 April, 2017. Available here: https://www.cbc.ca/news/canada/prince-edward-island/pei-gender-wage-gap-conference-board-1.4057190

[4] “Women on PEI more likely than men to have higher education, but still earn less, stats show.” CBC News. 21 May, 2021. Available here: https://www.cbc.ca/news/canada/prince-edward-island/pei-female-statistical-review-1.6045670

[5] Yarr, Kevin. “Women hit wage parity with men on P.E.I.”. CBC News. 8 Oct. 2019. Available here: https://www.cbc.ca/news/canada/prince-edward-island/pei-women-wage-parity-1.5313472 

[6] “Women on PEI more likely than men to have higher education, but still earn less, stats show.” CBC News. 21 May, 2021. Available here: https://www.cbc.ca/news/canada/prince-edward-island/pei-female-statistical-review-1.6045670

[7] European Commission. “Inception Impact Assessment: Strengthening the principle of equal pay between men and women through pay transparency”. Download document here: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12098-Gender-pay-gap-transparency-on-pay-for-men-and-women_en

[8] Chamberlain, Andrew. “Is Salary Transparency More Than a Trend?:Economic Research on the Impact of Greater Workplace Transparency”. Glassdoor. April 2015.
https://www.glassdoor.com/research/app/uploads/sites/2/2015/04/GD_Report_2-2.pdf