Eight in 10 Canadians support mandated salary transparency law

Should employers yield to this growing demand for wage transparency?

Eight in 10 Canadians support mandated salary transparency law

Wage transparency is starting to gain momentum in Canada, as indicated by a recent study which found that 84% of Canadians would support a law mandating employers to disclose salary ranges in job postings. According to the report, which was released by Talent.com, Canadians believe that salary transparency would increase pay equity for genders (61%) and racial minorities (57%).

While all this sounds great for employees, what impact would the new regulations have on employers? Robert Boersma, VP operations North America at Talent.com, told HRD that being transparent with their wages would inevitably help recruit and retain talent in a tight labour market.

"The survey highlights the fact that 84% of Canadians would support a pay transparency law that would require employers to disclose salary ranges in job postings," Boersma told HRD. "Employers would therefore be well advised to do what Canadians employees desire and be at the forefront of this trend, especially in a labour shortage environment where it is increasingly difficult to attract and retain talent."

Boersma added that being transparent about wages establishes jobseeker trust and would be a "strong contributor to employer brand."

"A company that is transparent about its salary ranges externally also facilitates salary discussions internally with its employees, since it allows them to have objective and open discussions about what factors determine where an employee sits within a salary band," Boersma said.

According to Boersma, wage transparency may also have an impact on the number and the quality of the applications employers receive, as well as make it easier for HR to address gender and racial wage gaps.

"Although employers need to be prepared to receive potentially fewer applications when adopting salary ranges in their job postings, they will benefit by bringing in more qualified applicants, increasing their employer brand trust and even lowering their cost per hire, as they will be saving time interviewing candidates who are way out of the salary range," Boersma said. "Salary transparency will make historically challenging conversations easier on HR people, bring more qualified applicants to recruiters and help close the gender and racial wage gap, what's not to like."

The International Labour Organization recently said that pay transparency measures can help address the gender wage gap, as well as address its underlying causes. In Canada, the Pay Equity Act mandates federally regulated private sector employers to "report their salary data in a way that shows aggregated wage gap information." In doing so, the government seeks to:

  • help reduce wage gaps
  • shift business culture and expectations toward greater equality
  • lead to better outcomes for workers and their families

In Newfoundland and Labrador, the government introduced a new bill that will require certain employers to prepare pay transparency reports. Ontario also introduced a Pay Transparency Act that mandates employers with 250 or more employees to prepare Pay Transparency Reports.

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