While legal requirements around pay transparency vary across different jurisdictions, employers that offer context around pay decisions can build trust with employees by providing clearer visibility into compensation expectations and signalling a commitment to fairness, says Kelly Voss, head of rewards and career for North America at Aon.
“Those that embrace transparency as part of their employee value proposition stand out as equitable, forward-thinking employers. . . . Employees who have a better understanding of how their pay is determined and feel that their contributions directly impact pay are more engaged, which drives the success of the organization.”
Read: How B.C.’s pay transparency legislation could impact employers
A recent survey by Aon found just 19 per cent of global organizations consider themselves ready for pay transparency. The survey, which polled more than 1,400 employers across 40 countries, found while in North America, just 16 per cent of employers said they aren’t ready for pay transparency, this percentage increases in Asia-Pacific (48 per cent), Latin America (40 per cent) and Europe, the Middle East and Africa (26 per cent).
Six in 10 (60 per cent) of employers said they apply pay transparency requirements selectively by geography — primarily where legally required — rather than adopting a unified, values-based strategy. Indeed, regulatory compliance was cited as the No. 1 motivator for employers’ pay transparency efforts.
In Canada, provincial pay transparency legislation is gradually being enacted across the country. On Jan. 1, 2026, Ontario-based employers will be required to include total compensation — including base salary, bonuses and commissions — or a range of expected compensation up to $50,000.
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British Columbia enacted pay transparency legislation in 2023 and, by 2026, all employers with 50 or more employees will be required to post pay transparency reports. And both Newfoundland and Labrador and Prince Edward Island enacted pay transparency legislation in 2023 and 2022, respectively.
Voss says this new wave of pay transparency laws is prompting Canadian companies to take a more intentional and holistic approach to compensation.
“Rather than focusing solely on base salary, organizations are reassessing how they define and communicate total rewards, including bonuses, equity and benefits. This shift encourages companies to align their compensation strategy with broader talent and business goals, ensuring that what’s disclosed reflects the full value of employment and supports a compelling employee value proposition.”
Establishing cross-functional coordination across various departments — including human resources, legal, risk and environmental, social and governance teams — in terms of what must be disclosed and how is among the biggest pay-transparency challenges that employers face, adds Voss.
Read: Only 16% of Canadian employers have implemented pay transparency strategy: survey
“This is an interlinked risk and opportunity for these departments to work together to most effectively comply with the law, minimize negative exposure across all communication channels and maximize internal HR processes to provide competitive compensation that attracts and retains the best talent. Good governance and clarity about who from each department owns what part of the process is essential to pulling off a successful outcome as it relates to this topic.”
The survey also noted employers continue to face communication gaps around pay transparency. Just seven per cent of organizations said they feel strongly that employees fully understand pay policies and just nine per cent have a high level of confidence that managers are trained to discuss compensation effectively, highlighting a major barrier to transparency. Although 69 per cent of organizations said they publish salary bands during recruitment, only 21 per cent do so for all job postings, further reflecting a cautious, compliance-driven approach.
It’s important for employers to consider all channels by which pay decisions are made available, from public-facing regulatory disclosures and social media sites to internal websites and one-on-one communications between a manager and employee, she says.
“What is clear is that companies need a strategy to think about how best to communicate their value proposition regarding equitable pay to employees and other key stakeholders. Effective communication builds an environment of trust.”
Read: Pay transparency on the rise in Canadian job postings: report