Speaker's Corner: Pay transparency laws needed

It’s been 30 years since Ontario adopted its then world-leading pay equity law to end systemic sex discrimination in pay. But three decades later, the gender pay gap remains a human rights crisis that impoverishes women in Ontario and across Canada.

It’s been 30 years since Ontario adopted its then world-leading pay equity law to end systemic sex discrimination in pay. But three decades later, the gender pay gap remains a human rights crisis that impoverishes women in Ontario and across Canada. Now, as frustration mounts, both workers and investors are calling for pay transparency laws to boost robust enforcement to close the gender pay gap.

But first, the facts. The gender pay gap is real. And it is everywhere.

This issue is important to lawyers whether they represent workers who face discrimination, represent employers who face liabilities or are legal partners who may face liabilities for wage gaps in their own law firms.  

Whether measured by hourly, weekly or annual pay, by full-time, part-time or annual earnings or by identical work, similar work or work of similar value, women workers are routinely paid less than men. Based on average annual earnings, women face a staggering gender wage gap.  

Indigenous women face a 57-per-cent gap, women with disabilities face a 46-per-cent gap, immigrant women face a 39-per-cent gap and racialized women face a 32-per-cent gap, according to Census data and Statistics Canada Canadian Income Statistics data contained in reports released in 2016.

On average, Ontario women face a gender pay gap of 30 per cent. Over a 45-year career, that is the equivalent of working 13 years without pay.

A gender pay gap hits women at every age cohort, every educational level and at every income level. Recent studies of Canadian university graduates reveal that from their very first jobs women are paid less than their male classmates who graduate from the same program, in the same year and seek jobs in the same field.

The pay gap exists in every sector of the economy. Of the 500 occupations tracked by Statistics Canada, women are paid less than men in 469 of them.

Women lawyers are not immune from this discrimination. The LSUC’s 2010 report “Racialization and Gender of Lawyers in Ontario” states: “Women and especially visible minority lawyers earn less than their White male counterparts.” Women lawyers aged 35 to 39 years old on average face a 20-per-cent gender pay gap; that grows to a 28-per-cent gender pay gap by ages 45 to 49.

A 2016 study prepared for Ontario’s Ministry of Labour by Deloitte LLP calculated that, in Ontario alone, the gender wage gap represents $18 billion in “foregone income” each year. As Ontario’s Gender Wage Gap Strategy Steering Committee highlighted, that $18 billion in missing wages equals 2.5 per cent of the province’s annual GDP. That’s as large as Ontario’s motor vehicle and auto parts industries combined.

Sex discrimination in pay has been against the law for decades. It is prohibited under the Human Rights Code, the Employment Standards Act and the Pay Equity Act. But non-compliance remains a significant issue, particularly in the private sector and in non-unionized workplaces.

Pay secrecy is one element that allows the pay gap to fester. So, pay transparency laws are the newest legal tool being adopted globally to combat wage discrimination.

To mark Equal Pay Day earlier this year, Ontario’s Equal Pay Coalition unveiled its draft Pay Transparency to Close the Gender Pay Gap Act, challenging Ontario to take action.

Pay transparency laws have already been adopted in, among other countries, Australia, the U.K., Germany, Belgium, Denmark, several states in the U.S. and, most famously, in Iceland earlier this year.

Pay transparency laws put the onus on businesses to prove they are complying with their existing legal obligations to provide discrimination-free pay. Transparency laws incorporate three key elements.

First, pay transparency laws give workers and investors the right to know how women and men are paid in the workplace.  

Second, pay transparency laws require employers to disclose their compensation structure by gender and job classification. This would be done by filing annual reports with the Ministry of Labour identifying average earnings by gender and by job classification, providing pay transparency reports to employees on request and posting annual pay transparency reports in workplaces and placing pay transparency reports before each annual meeting of shareholders.

Unlike Ontario’s Sunshine List — which has itself disclosed persistent gender pay gaps even in high­income secure jobs — pay transparency laws do not disclose individual workers’ names and earnings. Instead, pay transparency laws disclose anonymized earnings by sex, either showing the range or average of female and male wages.

Third, pay transparency laws protect workers from reprisals for asking for information about or discussing wages.

Pay transparency laws sharpen accountability for human rights compliance by giving workers key information they need to demand and enforce their rights. They help identify the sticky floors, glass ceilings and occupational segregation that sustain the pay gap. They help identify women’s predominance in precarious part-time, casual, seasonal and temporary agency work. They enable governments and other anchor institutions to make gender pay transparency a mandatory part of procurement practices. And, as highlighted by the Responsible Investment Association and the Shareholder Association for Research and Education, they enable investors to engage in responsible investment strategies focused on decent work.

The gender pay gap is sustained by many factors. And we need many co-ordinated strategies to close that gap. Lawyers need to engage in those strategies, to close the gender pay gap for their clients and in the profession.

The Equal Pay Coalition has mapped a 12-step action plan to close the gap. If Ontario and Canada want to regain their standing as global leaders in the fight against systemic sex discrimination, they need a robust, multi-pronged legislative and policy response that includes mandatory pay transparency laws.

Fay Faraday is a labour and human rights lawyer in Toronto and co-chair of the Equal Pay Coalition.

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