In the past few months, we have seen multiple legislation regarding gender pay transparency being passed around the globe - Pay Transparency Act in Canada British Columbia, the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023 in Australia, pay transparency directive in EU, and Law 14.611/2023 in Brazil. In general, the laws require employers to disclose pay information and create an action plan if a noticeable discrepancy is found. However, certain unique features in some laws need to be paid extra attention, as they could impact the consistency of company’s global pay strategy and studies.
Data needs to be disclosed: All these laws oblige companies to disclose gender pay gap, yet with different requirements on company size, calculation methods, and reporting time and frequency. While most laws only require a gender pay gap analysis, some laws (EU and Canadian British Columbia) ask additional data on other diversity characteristics, intersectionality, and disabilities. Additionally, the EU directive requires in-depth, in-country compensation data for all grades and categories of workers (not “employees”) in each individual EU member state. Global employers should consider all the components when conducting their pay equity studies.
Access to information: The new rules in EU and Canadian British Columbia will make it compulsory for employers to inform job applicants about the starting salary or pay range of advertised positions. Employers will also be prevented from asking candidates about their pay history. Additionally, workers will have the right to request information from their employer on their individual and group pay information.
Union involvement: Uniquely, the EU directive regulates that companies are required to engage worker representative bodies during the data collection process and if a pay gap greater than 5% is found. The Directive implies that if a worker body does not exist, one must be elected.
Outlook: While more governments push for pay transparency legislation, global employers who have employees in countries that have different requirements need to start carrying out a thorough pay equity study globally, reviewing your job architecture and pay structure, identifying venerable points and create correction plans, and working with the diversity team on a sustainable talent strategy.
