Kerry Taylor still remembers a sticky note left on her desk by a male colleague and friend before leaving for another employer during the Internet boom in the early 21st century. The chit had his salary and signature bonus at the Vancouver Technology Company, where they both worked as software developers.
According to Post-It, he made over $ 15,000 a year more than Mrs. Taylor, even though he had the same job, skills, and experience.
About two decades later, new federal and provincial wage disclosure laws are aimed at reducing the pay gap, as revealed by Ms. Taylor by ordering wage disclosure. The new rules are likely to help bridge the pay gap while giving workers and employers a better view of pay practices at a time when Canada is facing persistent labor shortages, experts say.
June 1 is the deadline for larger federally regulated private employers to report aggregate pay gap data. It is also the date when employers on Prince Edward Island will have to start including salary rates or ranges in all publicly advertised job offers.
The measures come at a time when policymakers in many countries are introducing new requirements for transparency of remuneration for companies. Austria, Denmark and Britain, for example, already require some employers to monitor and report the gender pay gap. The European Union is also considering remuneration transparency legislation that would apply in all Member States.
In the United States, New York will begin ordering employers to include salary margins in job offers later this year, following the example of Colorado, where a similar mandate came into force in January 2021.
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The laws are likely to give women and other groups, such as racially motivated workers and people with disabilities, better leverage to obtain fair compensation, some economists and human resources experts say.
Research shows that wage disclosure rules for existing employees have “definitively” reduced the gender pay gap, said Zoë Cullen, an assistant professor at Harvard Business School. In Denmark, for example, a study found that pay transparency rules reduced the gender pay gap by 13 percent.
In Canada, a recent study by university faculties across the country found that the pay gap between men and women narrowed by about 20 percent to 40 percent due to the publication of the salaries of the provincial “solar list” of higher-income public sector workers.
Researchers have also found that transparency requirements can lead to downward pressure or wage growth. Dr. In her research, Cullen found that greater transparency encouraged employers to negotiate more aggressively, as individual wage bargaining was likely to have “spill-over” effects affecting the remuneration of other workers.
On the other hand, forcing employers to disclose salary information in job positions could help raise salaries at all, although economists have just begun to study these newer measures, noted Dr. Cullen.
“If a significant proportion of employees start applying for better paid jobs, it should increase competition overall,” she said.
This is the impact that Wendy MacIntyre, owner of ResolveHR in Charlottetown, expects PEI rules will have on local businesses in the current labor shortages. “Because if everyone is trying to get employees, you want to have an idea that you’re at least in a spherical field with your competitors,” she said.
And while the PEI law applies to job advertisements, Ms. MacIntyre expects it will also have a knock-on effect on oral recruitment, which is still common in the province.
The new transparency rules only apply to some Canadian workers and employers, but their impact may have a wider impact, experts say.
While Canadian federally regulated private companies have less than one million employees – or less than 6 percent of the private sector workforce – they include large employers, such as banks, whose personnel practices tend to affect provincially regulated companies, HR said. expert Allison Venditti.
“Everyone else has to match what they do because they are such a huge piece of the white-collar job market,” said Venditti, who is the founder of the Moms at Work and My Parental Leave career coaching platforms.
In terms of job offers, transparency measures such as the PEI may soon come to other provinces. Similar legislation in Ontario received royal assent in 2018, although the province has not yet implemented it. British Columbia is also considering new disclosure rules.
In the meantime, Ms Venditti suggests that jobseekers contact the employers’ human resources department and find out about salary margins if they are not published.
The companies waste time when candidates leave at the end of the recruitment process because their salary expectations do not match the offer, she said. Sharing wage information is also in the interests of employers, especially in a tight labor market, she added.
With regard to employees who find that they are grossly underestimated, Ms Taylor said her experience was a clear lesson.
After verifying that all the male co-workers on her team made a lot of money, “I felt angry, I felt gutted, I just felt lost, they valued me so much less,” Mrs. Taylor recalled.
So when her company offered her a pathetic salary increase of 2 percent instead of her compensation reaching her teammates’ average – despite what she said were stellar performance ratings – Mrs. Taylor left. She went to work for a competitor who hired a friend who left the ticket.
“Companies rely on the fact that it’s hard to change jobs,” said Ms. Taylor, who eventually changed careers and founded Squawkfox, a popular personal finance site.
But if you pointed out a significant pay gap and didn’t get anywhere, “you should definitely pack up and leave.”
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