Background

It has been almost thirty years since the Pay Equity Act was enacted in Ontario. Although the gender wage gap has been reduced, data collected by Statistics Canada through the Labour Force Survey indicates that women still earn $0.87 for every dollar earned by men, largely as a result of wage inequality between women and men within occupations.[1]

In a move that is a first among Canadian provinces and that may have national ramifications if other provinces follow suit, the Ontario Liberal government has introduced a pay transparency bill. The bill is the central piece of Then Now Next: Ontario’s Strategy for Women’s Economic Empowerment, a three-year strategy to challenge gender bias and remove barriers faced by women at work, at home, and in their communities.

The Bill

The proposed Pay Transparency Act, 2018 (“PTA”) was first introduced by the Liberals on March 6, 2018, and then reintroduced the day after government was prorogued on March 19, 2018. If enacted, the PTA would:

  • 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 prescribed employers to track and report compensation gaps based on gender and other diversity characteristics, to be determined through consultation. Once fully implemented, these measures would require employers to publicly post that data within their own workplaces, in addition to reporting them to the province; and
  • Provide compliance through the appointment of compliance officers who would have a broad range of powers, including requiring the production of records and the ability to enter a workplace without a warrant in order to conduct an inspection or investigation.

The province’s pay transparency disclosure measures would begin with the Ontario Public Service. Then, following consultation, the proposed new rules would apply to employers with more than 500 employees, and later would extend to those with more than 250 employees. Exactly which prescribed characteristics — in addition to gender — employers would be required to record and report are to be determined through consultation. The length of time of each consultation period has not been prescribed, which could create difficulties for employers seeking certainty regarding when the new rules will apply to their businesses.

Commentary

While the objectives of the legislation are laudable, and arguably overdue, in its current form the bill is only a framework that will be expanded through the consultation process. Although details that will be of interest to employers are absent, one certainty is that, if enacted, the PTA will add another layer of compliance obligations onto private-sector employers that are already subject to a myriad of rules and regulations. Further, this bill is another example of the trend away from complaints-driven processes towards greater government oversight of employment relationships in Ontario.