New pay transparency rules now in effect

Salary data, definitions, self-reporting questionnaires all have to be updated

New pay transparency rules now in effect
Changes to the Employment Equity Act require businesses to provide more detailed salary data that will be made public beginning in 2022.

In an effort to address the ongoing wage gap in federally regulated employers, new measures that went into effect on Jan. 1, will provide a more fulsome look at exactly how much those employees are getting paid.

As a part of amendments made to the Employment Equity Act, businesses with more than 100 employees will be mandated to provide more detailed salary data that will be made public beginning in 2022, says a Toronto employment lawyer.

As part of the government’s pay transparency measures, “these are part of a broader approach by the government to be addressing issues around equity and inclusion in the workplace,” says Jennifer Hodgins, partner at Norton Rose Fulbright Canada in Toronto.

At the heart of the changes will be new methods of defining salary, she says.

“The new definitions will be in the legislation, as well: as the period over which the salary was paid; the number of hours worked that can be attributed to the salary earned; the bonus amounts paid during the reporting period; as well as overtime paid and the corresponding overtime hours worked.”

But the new regulations should not be too onerous for employers, says Hodgins, as many have been reporting data to the federal government for some time.

“My understanding is that part of the motivation behind some of these changes, for example, to the definition of salary is to actually ease the burden on employers, and make it so that what employers need to report is more consistent with what they internally are recording about their employees’ salary.”

Jennifer Hodgins

Once the data has been collected, it will be made public, according to Hodgins.

“The government will ultimately take that information around wage gaps, aggregate it and release it as part of a government report on the issue of wage gaps in federally regulated workplaces.”

HR’s role
For HR professionals, it’s important to take a look at the new salary data that they’ll be needing to include in the report, she says.

“While these amendments came into force on Jan. 1, employers will only be required to include this new salary data in in the reporting as part of their June 1, 2022 report, which will capture the 2021 calendar year. The report that they’re going to be filing this year in 2021 will be based on the current requirements for salary reporting.”

And HR professionals should be aware that reporting questionnaires — which help employers understand just who employees identify as — will have to be altered slightly, according to Hodgins.

“Previously, employers were required to include definitions in a self-workplace questionnaire that were consistent with the act; employers who have to provide questionnaires to employees to self-identify as members of the designated groups under the act now have to actually include the definitions in the act.”

The four designated groups are women, Indigenous people, persons with disabilities and members of visible minorities.

Legislation has also been changed around harassment in the workplace and the federal government is looking for some input into planned Privacy Act changes.

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