Bill 3, The Pay Transparency Act, 2018

Bill 3, The Pay Transparency Act, 2018, which recently passed third reading in the Ontario Legislature, amongst other things, will require employers with over 100 employees to file a pay transparency report annually. This report will include compensation data (i.e. salary range) segmented by employee demographic characteristics already referenced in other existing workforce legislation (e.g. Pay Equity, Employment Equity). Bill 3 seems to be more focused on larger firms as 28% of Ontario businesses have fewer than 100 employees[1].

Unintended Benefits of Bill 3, The Pay Transparency Act, 2018

Beyond being part of a noble intent to narrow gender-based pay gaps, this legislation might also create some additional monetary benefits for job holders and government coffers.

My job is now worth what!

One argument for the current high levels of CEO pay is based on the publication frequency of pay rates in certain industries [2]. Essentially, the increased frequency of published data created an upward spiral of pay for those jobs as companies strived to attract talent by paying above the market median rates. So, job holders who believe they have unique skill sets (just like CEOs), and can marshal a louder collective voice, might stand to benefit from increased publication of their wages!

What would a “my job is unique” checklist look like?

It’s always about the money

Compensation survey data is valuable to the extent that an organization can compare its pay rates to select industry peers and data segments. Survey houses tend to report data on commonly defined segments (e.g. organization scope, employee count). Most, however, will charge a premium for “special cut” or sub-segmented reports. Since the mandated pay transparency reports will include additional segmented reporting (e.g. by diversity characteristics, gender) the Ministry of Labour website might ultimately displace a lot of published survey business.

Could this legislation favor the Ministry as a preferred source of compensation planning data?

References

[1] ohrc.on.ca/en/strengthening-bill-3-%E2%80%9Cpay-transparency-act%E2%80%9D-protect-human-rights

[2] 4liberty.eu/why-has-ceos-pay-increased-so-much/
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