New compensation rules will affect all Ontario employers

Shortly before the Ontario legislature closed for business pending the outcome of the June 7 election, Ontario enacted Bill 3, which imposes new obligations on employers relating to the hiring process and the reporting of workplace compensation. This law presents some new risks but also some new opportunities for all employers in the province.

Bill 3, titled The Pay Transparency Act, 2018, means that, starting on January 1, 2019, Ontario employers must:

• Include a compensation rate or range in all publicly advertised job postings; and
• Not question a job candidate about past compensation.

Additionally, the government will establish a framework to require larger employers to track and report compensation gaps based on gender and other diversity characteristics. Once fully implemented, these measures would require employers to publicly post that data within their own workplaces and report it to the province which will, in turn, publish it. The timeframe for implementation is staggered but fast approaching: the proposed new rules will apply to employers with more than 250 employees in 2020, and will extend to those with more than 100 employees in 2021.

Bill 3 does not amend or revoke existing pay equity legislation and any obligations for employers under Bill 3 are in addition to those under the Pay Equity Act.

At the moment, some employers are taking a “wait and see” attitude pending the results of the June election. Certainly, employers will be assessing some of the loopholes in Bill 3, and ways in which the Bill can be leveraged to create a competitive advantage for themselves in terms of the information they must disclose and, perhaps most importantly, the potential to “mine” data from competitors and other businesses that begin to make various disclosures pursuant to the new law.

We will provide a further update in the fall, or as circumstances warrant.

By Jason Hanson and Shari Cohen, Osler

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