- 5 mins
In Canada
By late 2023, several provinces in Canada have revised their Employment Standards Act to require employers to disclose salaries on job postings. Among the provinces that have recently implemented this policy is P.E.I. Notably, Ontario was the first province to enact such legislation, albeit facing resistance from its conservative government. This change not only enhances transparency in job postings but also prohibits employers from inquiring about candidates' previous salaries and from retaliating against employees for discussing their wages at work.
Effective from November 1, 2023, British Columbia will become the latest province to enforce job posting transparency. Employers will be obligated to include the expected pay or pay range when publicly posting a job. Additionally, there will be a reporting section that must be completed annually. Initially applied to provincial government employees, this requirement is set to expand to companies with 50 or more employees by the end of 2026.
In Alberta
In contrast, Alberta has yet to adopt such measures. While the government is required to disclose the salaries and severance of government workers surpassing a certain threshold, private companies are not bound by any specific regulations. Although workers are permitted to discuss their salaries and work conditions with their colleagues, there is no explicit law prohibiting employers from penalizing employees for these discussions. At present, there are no plans to implement this kind of regulation in Alberta.
At the federal level, the government introduced the Pay Equity Act in 2021, which mandates federally regulated private sector employers to ensure pay equity among their employees. This was implemented to address gender wage disparities. However, there is currently no federal requirement for job posting transparency, leaving this responsibility to individual provinces. Consequently, the policy landscape varies across the provinces, with this initiative still in its infancy across Canada.
Looking at the USA
In the United States, the responsibility currently falls on individual states, as there is no federal standard in place. New York recently joined the ranks of states that have adopted pay transparency laws, following in the footsteps of Colorado, California, Illinois, Hawaii, and Washington. However, some companies are exploiting a loophole by providing excessively wide salary ranges, such as Citi's range of $61,710 to $155,290. It is evident that the legislation is not without its imperfections and will require ongoing testing and refinement over time.
European Union
Other countries' initiatives for job posting transparency surpass those of Canada and the USA. Notably, the European Parliament approved the EU Pay Transparency Directive on March 30, 2033, mandating employers to disclose salaries in job postings or before interviews. The directive also encompasses obligations to foster gender equality, transparency, and diversity. Member states have a three-year window to integrate these regulations into their national legislation.
Advantages of Transparency
The advantages of enhancing job posting salary transparency far outweigh the disadvantages. Jen Dewar's LinkedIn blog delineates the benefits of increased transparency, as well as the organizational drawbacks that can be reframed as growth opportunities. If companies provide less competitive salary ranges, subsequently limiting the candidate pool, they must innovate by offering alternative non-monetary benefits to remain competitive.
Similarly, concerns about "workforce envy" due to internal disparities can be mitigated through transparency, allowing workers to address potential discrimination and fostering a more equitable work environment. Additionally, the potential for "employee poaching" necessitates companies to diversify their offerings, potentially incorporating remote work or flexible arrangements to attract and retain top talent.
It is important to recognize that such legislation can also benefit employers. Common workplace issues like 'quiet quitting' and burnout can be alleviated with these policy changes, leading to improved retention rates, the attraction of more suitable talent, and a reduction in current gender and race disparities.
Gender Disparities
Apart from aiding job seekers, pay transparency can play a crucial role in reducing the gender pay gap. This gap stems from various factors and has been a focal point for policymakers in recent years. Recent research across Canadian universities suggests that salary transparency encourages employees to advocate for fairer compensation privately and prompts employers to make necessary adjustments. While transparency laws are still relatively new, further research is needed to understand the mechanisms that effectively diminish gender disparities.
The Call for Action in Non-Profits
It is imperative for non-profit organizations to step up their efforts. Diversity, equity, and inclusion policies must extend beyond the clients served and also be integrated into the hiring process. Failure to disclose salary ranges in job postings contradicts the principles of being an equal opportunity employer, creating an imbalance of power during interviews and negotiations when applicants are required to state their salary expectations.
Accountability is crucial for non-profit social service organizations. Job seekers require transparency for informed decisions. Explore this article for a list of organizations (mainly from the social service sector) that disclose or don't disclose salary ranges in job postings. The list is regularly updated to promote transparency adoption.
