Introducing the Pay Transparency Act, 2018

In April of this year, the Ontario government passed the Pay Transparency Act, 2018 into law, making Ontario the first Canadian province to establish comprehensive legislation around pay transparency. The Act will come into force on January 1, 2019.

The purpose of the Pay Transparency Act is to promote gender equality and equal compensation between men and women. More specifically, the legislation establishes rules around the disclosure of information about compensation with a view to advancing the Ontario government’s stated objective of closing the gender wage gap.

What are the requirements of the Pay Transparency Act?

There are a number of requirements that will impact employers. The Pay Transparency Act, 2018 will:

  1. Require all publicly advertised job postings to include a salary rate or range;
  2. Bar employers from asking a job candidate about their past compensation;
  3. Prohibit reprisals against employees who discuss or disclose compensation; and
  4. Establish a reporting framework that will require employers with 100 or more employees to track, report and post compensation gaps based on gender and other diversity characteristics.

The above-referenced reporting requirements are as follows:

  1. Employers with 100 or more employees must collect prescribed information for the purposes of preparing a pay transparency report no later than May 15 each year;
  2. Employers with 250 or more employees must submit their first pay transparency report by no later than May 15, 2020;
  3. Employers with 100 to 249 employees must submit their first pay transparency report by no later than May 15, 2021.

After these reports are submitted, they must be posted online or in a conspicuous location within the workplace.

How will the Pay Transparency Act be enforced?

The Act allows compliance officers to conduct audits. Penalties can also be imposed in accordance with the regulations to the Act.

How Will the Pay Transparency Act Affect My Business?

As a result of the Act, employers may have to revise their recruiting practices and ensure that their job postings are compliant with the legislation. Employers will also need to ensure that their written employment contracts and policies are not in contravention of the Act, such as by containing terms requiring that employees keep salary information confidential. In addition, employers must prepare to meet the reporting requirements, as explained above.

Unlimited 24-Hour Advice on the Pay Transparency Act

Do you have questions about how the Act applies to your business? Ask our HR Advisors for a checklist to ensure that your employment practices are in compliance with Ontario’s labour laws. Our employer helpline is open 24/7 because your business is our number one priority. Call us today – 1(833) 247-3650.