While she was working for a bank through a temporary worker agency, Elaine Edwards learned a fellow temp was making $21 to her $17 — even though she had been working in the banking sector for 20 years, and he was fresh out of school.
Shortly after she raised the issue with the temp agency, Edwards says, her contract was terminated.
“It put me in a financial bind to be let go five months before the contract was supposed to end. I was unable to find another job for nearly eight months,” the Toronto resident said. “Refusing unsafe work and demanding fair pay should not be a reason to fire anyone.”
Currently, Ontario employment laws offer no protection against discipline or termination for asking about salary information. That was something the province’s Pay Transparency Act, which was passed last year, took aim at.
The logic: Since Ontario’s gender wage gap sits at 29.3 per cent (based on annual earnings), lack of protection for those seeking compensation information could disproportionately harm women.
So what does pay transparency do exactly? And what does the evidence say about its effectiveness?
Ontario employment laws already prohibited paying women less than men for doing the same job — first, in legislation that was introduced in the 1950s, and then in human rights legislation that specified hiring and pay in the province was to be free from discrimination. In 1987, the Pay Equity Act placed a proactive obligation on employers to ensure female-dominated work was not being undervalued relative to male-dominated jobs of equal worth.
Pay transparency reform “layers on top of all three of those pieces of legislation, and says to employers, ‘You have had a legal obligation to pay non-discriminatory wages for almost 75 years. There’s still a pay gap. Time’s up,’” said Fay Faraday, co-chair of the Equal Pay Coalition.
As it’s currently written, the Pay Transparency Act contains anti-reprisal protections, and would require employers with 100 or more workers to submit a pay transparency report to government. It would also ban employers from asking for workers’ salary histories, and require them to include compensation ranges in job postings.
Faraday says those kinds of measures are important because if women are underpaid in their first jobs, inequities could follow them to subsequent ones if salaries are based on prior compensation.
According to Ashley Challinor, the Ontario Chamber of Commerce’s vice-president of policy, the pay gap “remains a challenge,” but the province’s transparency laws were “passed quickly and with little consultation.”
The legislation was drafted and passed following a yearlong consultation conducted by the Gender Wage Gap Strategy Steering Committee which, among other things, recommended that government “encourage” businesses to develop pay transparency and consider anti-reprisal legislation.
“Our concern is that this legislation does not interact with the Pay Equity Act, the existing legislation that seeks to address the pay gap,” Challinor added in an emailed statement. “This is, unfortunately, an example of layering on of regulation instead of modernizing and streamlining it — which negatively impacts compliance and the effectiveness of the regulation.”
Faraday says the whole point of pay transparency is that it works alongside existing measures that address discrimination in different ways.
“There are currently three different pieces of legislation which are aimed at closing the gender pay gap and they address different elements of what drives the pay gap. There’s not one single driver, there’s multiple drivers,” she said. “So you need multiple tools to close the gap.”
In the past few years, jurisdictions including Iceland and Australia have adopted this approach. The European Commission has also recommended that all member states adopt pay transparency measures domestically.
The United Kingdom did so in 2016, passing legislation requiring workplaces with 250 or more employees to quantify and report their gender pay gaps. Its purpose, said then-prime minister David Cameron, was to “cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.”
With around two years of data available, it’s hard to tell whether transparency is actually driving down pay gaps. What the data does so far suggest, though, is a significant shift in perspective on the issue.
In 2015, fewer than half of large employers surveyed by the Trade Union Congress supported pay transparency measures. But when U.K.-based progressive think tank the Institute for Public Policy Research (IPPR) conducted a poll after the legislation’s implementation, 80 per cent of employers said gender pay reporting should stay.
And following the reforms, four out of five large employers considered, or took further action, to narrow their internal pay gap, the IPPR found. The legislation has a 100 per cent compliance rate.
“The high compliance sort of indicates that it was doable,” for employers, said IPPR researcher Lesley Ranking. “It’s also driven employer action.”
Earlier this year, the U.K. concluded consultations on going even further by introducing similar provisions for ethnicity-based pay gaps, noting the government had “seen the power of transparency in gender pay gap reporting.” The IPPR has also recommended living wage and disability pay gap reporting.
In the 2018 round of debate on Ontario’s pay transparency legislation, the Ontario Chamber of Commerce’s warned of “burdensome reporting obligations” such policies pose for employers. Jan Borowy, a co-chair of the Equal Pay Coalition, says it’s data that employers already have on hand.
“You have to have this data for the (Canada Revenue Agency). This is data that is reported on your T4s,” she said.
What most parties seem to agree on is that transparency alone is not the answer.
“While data collection has value, reporting alone is not the solution to pay inequity. Proper analysis of compensation data would ensure that we do not merely identify a wage gap, but reveal insights into its causes,” the Chamber’s April 2018 submission to government on pay transparency notes.
“The gender pay gap has lots of different causes,” said Ranking. “It’s everything from discrimination and bias to occupational segregation, where women are concentrated in lower-paying sectors.”
Sara Mojtehedzadeh is a Toronto-based reporter covering labour-related issues. Follow her on Twitter: @saramojtehedz