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New Ontario law requires public disclosure of employee compensation

With the Ontario government’s plan for economic empowerment of women, The Pay Transparency Act, 2018 was passed, which requires public disclosure of employee compensation.

disclosure of employee compensationOn the heels of new amendments to the Employment Standards Act, 2000, which introduced changes to this law’s equal pay provisions, the Ontario government recently passed The Pay Transparency Act, 2018 (“the Act”). The Act is just one of many components of the Liberal government’s plan “Then Now Next: Ontario’s Strategy for Women’s Economic Empowerment”, a three-year plan designed to increase gender equity, challenge bias, and eliminate barriers women face at work, at home and in their communities.

The Act is meant to increase transparency in hiring processes and provide women with more information when negotiating compensation that is equal to that of their male peers. Effective January 1, 2019, Ontario will:

  • require all publicly advertised job postings to include a salary rate or range;
  • bar employers from asking a job candidate about their past compensation;
  • prohibit reprisals against employees who discuss or disclose compensation;
  • establish a framework to require larger employers to track and report compensation gaps based on gender and other diversity characteristics, to be determined through consultation.

The pay transparency disclosure measures will begin with the Ontario Public Service. Following consultation, the proposed new rules will then apply to employers with more than 250 employees in 2020, and will extend to those with more than 100 employees in 2021. The purpose of these measures is to shine a light on the practices of the majority of Ontario businesses and set the standard for all workplaces to follow.

Although it is the first of its kind among the provinces, it builds on other government efforts to create fairness for women in the workplace. For example, in October 2015, the Ontario government tabled its Sexual Violence and Harassment Action Plan Act (“SVHAPA”), which amended the Occupational Health and Safety Act (among other pieces of legislation) and imposed new requirements on how employers must deal with sexual harassment complaints. More recently, effective January 1, 2018, a new domestic and sexual violence leave was introduced to the Employment Standards Act that provides that an employee is entitled to up to 10 days and up to 15 weeks of leave if the employee or their child experiences domestic or sexual violence, or the threat of domestic or sexual violence. The first five days of this leave are to be paid.

Furthermore, the changes brought about by the Act are also in line with a recent emphasis on equal pay provisions. Although the Employment Standards Act has had provisions requiring equal pay for equal work since 1969, changes were introduced in April 2018 requiring that part-time, casual and seasonal employees be paid the same rate as their full-time counterparts. The reasoning behind these changes were also partly gender-based, as studies show that women, most often single mother, often work part-time, casual and seasonal jobs, while being paid substantially less than their full-time colleagues.

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Doug MacLeod, MacLeod Law Firm

Employment and labour lawyer at MacLeod Law Firm
For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising and representing employers in connection with employee terminations. If you have any questions, you can contact him at 416 317-9894 or at doug@macleodlawfirm.ca. Read more
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