Updated Guidance on Pay Transparency Reports in British Columbia

​On Oct. 23, British Columbia's (B.C.'s) Minister of Finance approved regulations for the Pay Transparency Act (the "Act") by way of Order in Council (the "Order"). When officially published, the Order will become the Pay Transparency Regulation (the "Regulation").

Pay Transparency Reports

The Regulation provides further information to guide employers that are required to prepare pay transparency reports.

Pursuant to the Act, a "reporting employer" must, by Nov. 1 of each year, prepare a pay transparency report. Whether an employer is a "reporting employer" in any given year depends on the size of the employer. Reports are required for 2024 from employers with 1,000 or more employees; for 2025 from employers with 300 employees or more; for 2026 from employers with 50 or more; and for 2027 from the lesser of 49 employees and a prescribed number. It is unclear whether the number of employees only includes employees in B.C., or employees of the employer more broadly.

Collecting Information from Employees for Reports

For the purposes of preparing a pay transparency report, reporting employers are required to make reasonable efforts to collect prescribed gender information from their employees. The Regulation clarifies that this prescribed information is the "gender category" of each employee and that the following are the gender categories that apply:

• "Man": for an employee who identifies as a man.
• "Woman": for an employee who identifies as a woman.
• "Nonbinary: for an employee who identifies as nonbinary.
• "Unknown": for an employee who does not identify as a man, woman or nonbinary, who does not wish to specify their gender category, or about whom the employer does not have information respecting the employee's gender category.

An employee's disclosure of information regarding their "gender category" is ultimately voluntary, but reporting employers must make reasonable efforts to collect this information during the first year they are required to prepare a pay transparency report and whenever an individual becomes an employee. Additionally, reporting employers must provide employees with the opportunity to provide or update information about their "gender category" at least once each calendar year.

The B.C. Government has also stated that information about all of a reporting employer's employees in B.C. must be included in pay transparency reports, suggesting that reporting employers must make reasonable efforts to collect the aforementioned information from all their employees in B.C.

What Information Is Included in a Pay Transparency Report?

The Regulation clarifies what "prescribed information" must be included in a pay transparency report. The following information must be included:

• The name of the reporting employer.
• The mailing address of the reporting employer.
• The North American Industry Classification Canada 2022 sector code that applies to the greatest number of employees of the reporting employer.
• The dates on which the 12-month reporting period began and ended, with the 12-months corresponding to either 1) the most recently completed financial year or 2) the calendar year immediately preceding the year in which the report is made.
• The number of employees the reporting employer had as of Jan. 1 in the year the report is prepared, expressed in terms of one of the following ranges: 50 to 299 employees; 300 to 999 employees; or 1,000 or more employees.
• The percentage of employees in each gender category who received overtime pay and bonus pay, subject to exceptions for gender categories with less than 10 employees or reporting employers who have only one gender category with 10 or more employees.

A pay transparency report must also include information regarding the pay gap between a "reference category" (which will be "man" so long as there are 10 or more employees who identify with that gender category) and each other gender category ("woman", "nonbinary", "unknown") of the employer. Specifically, reporting employers must report the difference between the "reference category" and each other gender category with respect to:

• The mean and median hourly rate of pay.
• The mean and median overtime pay of employees who received overtime pay during the reporting period.
• The mean and median number of overtime hours of employees who worked overtime hours during the reporting period.
• The mean and median amount of bonus pay of employees who received bonus pay during the reporting period.

There are detailed provisions in the Regulation regarding how hourly rate of pay, overtime pay, overtime hours, and bonus pay must be calculated and expressed in a pay transparency report. The Regulation specifies that "bonus pay" includes money received by an employee in the form of securities, as commission, money related to profit-sharing, holiday bonuses and year-end bonuses.

Additionally, reporting employers must rank all their employees from lowest to highest hourly pay and report, as a percentage, how many employees in each quartile (top 25 percent, high 25 percent, mid 25 percent, lowest 25 percent) identify with each gender category. This requirement does not apply to reporting employers who have only one or no gender categories with 10 or more employees.

Format of Pay Transparency Reports

The information that a reporting employer is required to include in a pay transparency report must, to the extent practicable, be set out in a specified order as specified at Section 3(5) of the Regulation.

The Ministry has also stated it will publish a reporting tool to assist employers in preparing pay transparency reports and that this tool will be introduced under a later Regulation.

Jessica Hoskins and Christopher McHardy are attorneys with McCarthy Tétrault in Vancouver, B.C. © 2023 McCarthy Tétrault. All rights reserved. Reposted with permission of Lexology.