According to the IMF, inequality between men and women is an important facet of income inequality, in both high-income and low-income countries. As in other part of the world, women in Canada persistently receive lower wages and annual earnings than men. Despite evidence of slow progress toward pay equity, Canada’s gender wage gap remains larger than the OECD average, and slightly wider than the gap in the US; women’s full-time median wages are just over 80% of those of men.
In a country like Canada, ending the chronic gender earnings gap calls for a comprehensive set of interconnected and reinforcing measures, including breaking down employment barriers, providing high-quality affordable childcare, expanding and enforcing pay equity laws, and broadening access to collective bargaining. But one simple first step governments can take is requiring employers to publicly disclose the gender pay gap.
Academic evidence suggests disclosure works in empowering workers to address pay inequities. Compulsory reporting can also be deployed to embarrass employers that tolerate and encourage indefensible pay differentials — witness last August’s Securities and Exchange Commission rule requiring publicly-listed companies to reveal the ratio of CEO compensation to employees’ median compensation. Companies will have to start disclosing these pay ratios in 2017.
The United States and other countries are also requiring employers to divulge pay information in a bid to shine light on the gender pay gap. In April 2014, the US introduced a rule requiring federal contractors and subcontractors to submit summary data on the compensation paid their employees, including data by sex and race. At the end of January 2016, the Equal Employment Opportunity Commission extended this beyond federal contractors with a proposal to expand the collection of annual summary pay data by gender, race, and ethnicity from businesses with 100 or more employees. The proposal would cover over 63 million employees, and collect information across 10 job categories and by 12 pay bands.
European countries are far ahead of Canada in requiring gender pay gap disclosure. Many EU countries have well-developed gender equality strategies that include measures to close the gender pay gap. Belgium, Portugal, and France have gender pay transparency and reporting requirements. In Austria, the National Action Plan for Gender Equality in the Labour Market includes a compulsory requirement for companies to publish detailed equal pay reports. In March 2016, the United Kingdom will also make gender pay gap reporting (regarding average pay and bonuses) compulsory for employers with at least 250 employees.
Canada has been a laggard in requiring employers to reveal pay inequities between men and women. In its January 2016 submission to Ontario’s Gender Wage Gap Steering Committee, the Equal Pay Coalition proposed a new pay transparency standard written into the province’s employment standards legislation. The standard would require employers of all sizes to publicly disclose their “hourly wage and pay structures, any merit pay systems, the occupation and the nature of the employment relationship (such as part-time, contract, temporary agency).” Private-sector employers and provincial and municipal governments alike would be obligated to report pay and earnings information for direct and indirect employees (i.e. contract workers and temporary agency hires).
Mandatory pay reporting would bring Ontario into line with a growing list of jurisdictions featuring pay transparency laws. But a robust pay disclosure law of the sort proposed by the Equal Pay Coalition would establish Ontario as a leader in exposing gender pay inequity, empowering women and men to demand action on pay and earnings differentials, and exerting pressure on employers to improve economic opportunities and outcomes for women. The province should set the bar high.