Cross money off taboo topic list

Transparency will work. Sunshine, after all, is the best disinfectant
By Todd Humber
|Canadian HR Reporter|Last Updated: 03/29/2018

Pay equity hasn’t worked. Equal pay for equal work hasn’t been much better at moving the needle. Now, Ontario is charging forward with proposed legislation that would require organizations to be transparent with pay practices.

In an age of overregulation, it’s another frustrating burden on employers. But it’s the only option left after decades of indifference — and it is going to work.

Last year, Ontario’s Pay Equity Office marked the 30th anniversary of the province’s pay equity legislation with, among other things, an advertising campaign that touted the progress. When the law was passed in 1987, Ian Scott — Ontario’s attorney general and solicitor general — fêted the move.

“We have before us the first truly proactive pay equity legislation for the public and private sectors in North America,” he said.

For three decades, employers have been hammered with awareness campaigns and enforcement efforts. Advertisements, which ran in Canadian HR Reporter in 2017, pointed out that, in 2015-16, nearly 1,900 women received more than $6.8 million in adjustments as a result of workplace investigations.

Laudable, yes. Good enough? No.

Ontario is hardly alone on this front. In the United States, NBC News reported earlier this year that women only earned 79 cents for every dollar a man earns — a gap that, at the current rate, would not be eradicated until 2059.

Editor Sarah Dobson tackles Ontario’s proposal in-depth in one of this issue’s cover stories (see “Ontario pushes for greater pay transparency,” page 1.) But, essentially, employers would be barred from asking about past compensation and job postings would be required to include a salary rate or range.

The first bit is an easy pill to swallow. There are plenty of questions hiring managers can’t ask, and this can be added to that list. But savvy employers will always be sure to ask a candidate for her expectations. That is allowed under the proposed legislation, and information gleaned can be used to tailor offers.

The requirement to post salary rates or ranges, however, is going to cause some consternation and headaches. And that’s kind of the point.

After decades of stern warnings and hand slapping, legislators have had enough. Buoyed by recent waves of change, particularly the #MeToo movement, Canadian society in general has hit a tipping point when it comes to gender discrimination.

Money is no longer a taboo topic. While the legislation doesn’t encourage workers to share pay stubs, it does take away the ability of employers to punish employees for breaching the confidentiality provisions standard in many employment contracts.

Iceland is ahead of the equal pay curve. On Jan. 1, 2018, new legislation came into force that provides daily fines for companies that pay men more than women. And the beauty of Iceland’s proposal (or maybe the headache, from the employer’s viewpoint) is that it’s not a complaint-driven process. The onus isn’t on workers to raise a stink — it’s on the company to prove compliance.

Britain is on a similar track. Every organization with more than 250 employees is required to report on their gender pay gap to the Government Equalities Office. This rule applies to both public and private organizations, and the deadline to do so is upon us: April 4, 2018.

The government in the U.K. is taking a “name and shame” approach to the problem.

“There are no plans to punish companies that have a wide gender pay gap, but the government has stated that it will publish sector-specific league tables, highlighting companies failing to address pay differences between men and women,” the Guardian posted in a Q&A on the topic.

“Greater pressure may come from companies’ own employees and scrutiny from competitors and in the media.”

Universum’s Cost of Talent 2017 examined the gender gap in 29 countries. What may not be shocking to hear is that, in all 29 nations, men had higher salary expectations than their female peers. It looked at more than 533,000 new graduates in the business and STEM fields and asked them what they expected to earn in their first gig.

Among business students, Malaysia, Sweden and Canada ranked the best when it came to the gap, and Russia, India and Spain were at the bottom.

But don’t go waving the maple leaf too vigorously yet — because we were among the worst, with Netherlands and Indonesia, when it came to the STEM sector.

Female STEM grads in Canada expected to earn $41,573 per year while men expected heftier wallets at $49,565 — a considerable gap.

The pace of change is simply too slow. Governments expect more progress, society expects the gap to be closed immediately and enlightened employers are jumping on this bandwagon.

Transparency will work. It always does. Sunshine, after all, is the best disinfectant. HR’s job is to ensure the compensation philosophy and market research about pay rates is sound and defensible.

Because, in Ontario (to start), it’s going to become public information.

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