Introduction

On April 26 2018 Bill 3, An Act Respecting Transparency of Pay in Employment (the Pay Transparency Act) was enacted.(1) The legislation is a central piece of "Then Now Next: Ontario Strategy for Women's Economic Empowerment", which aims to advance women's economic equality in Ontario. The act will require employers with more than 100 employees to collect information and prepare pay transparency reports, which may be published online by the Ministry of Labour. Nominative information pertaining to violations of the act and related penalties may also be published online by the ministry.

Pay Transparency Act

The purposes of the Pay Transparency Act include:

  • promoting equality of compensation between women and men through increased transparency of pay and workforce composition;
  • promoting the elimination of gender biases in hiring and pay practices; and
  • supporting open dialogue between employers and employees on issues concerning:
    • employment;
    • compensation; and
    • equal opportunities.

The act:

  • forces the disclosure of information about the compensation of employees;
  • imposes requirements on all publicly advertised job postings; and
  • prohibits employers from asking certain questions to job applicants.

No compensation history information From January 1 2019 employers will be prohibited from asking job applicants about their compensation history, whether personally or through an agent. An applicant will still be allowed to disclose this information voluntarily (ie, without prompting).

Publicly advertised job posting requirements All publicly advertised job postings will be required to include information about the expected compensation or the range of the expected compensation for the role.

Pay transparency reports Employers with 100 or more employees will be required to collect prescribed information pertaining to their workforce composition and the differences in compensation among their employees with respect to gender and other characteristics. This transparency report must be posted online or in a conspicuous place in the workplace by the employer. The report must also be submitted to the Ministry of Labour, which may publish it online.

Employers with more than 100 employees but fewer than 250 employees will be required to submit their first pay transparency report no later than May 15 2021. Employers with 250 or more employees will be required to submit their first report no later than May 15 2020.

No reprisal From January 1 2019 employers will be prohibited from intimidating, dismissing or otherwise penalising an employee (or threatening to do so) because he or she has, among other things:

  • enquired about the compensation of employees of the organisation;
  • enquired about the transparency plan of the organisation; or
  • disclosed his or her compensation to another employee.

Where a collective agreement is in force, reprisal allegations will be dealt with through arbitration. Otherwise, an employee will be able to file a complaint with the Ontario Labour Relations Board. The burden of proof will be reversed for such complaints; therefore, the employer will have to prove that it did not take reprisal measures against the employee.

Compliance audits Compliance officers will be appointed under the Pay Transparency Act. They will have the power to conduct compliance audits and, for that purpose, will have the right to enter and inspect any place in order to investigate a possible contravention of the act or perform an inspection. Compliance officers will be able to issue notices of contravention and impose penalties for violation of the act. Fines will be determined in accordance with regulations to come.

Violations of the act made public The Ministry of Labour may publish information online pertaining to violations of the act, including:

  • the name of the party in violation of the act;
  • the date of the violation; and
  • the penalty imposed.

Coming into force Most of the new rules, except those pertaining to pay transparency reports, will come into force on January 1 2019.

National trend emerging

The new Ontario legislation is part of an emerging Canada-wide trend reflecting increasing efforts to improve pay equity and, more generally, equality in the workplace.

Federal level There is no equivalent to the Pay Transparency Act at the federal level; however, the 2018 budget promised to introduce "historic proactive pay equity legislation that will reduce the gender wage gap".

Quebec As is the case in Ontario, the Pay Equity Act ensures that male and female job classes of equal or comparable value receive comparable compensation. However, there is no equivalent to the Pay Transparency Act in Quebec.

Alberta Shortly after its election, Rachel Notley's government promised to work on addressing gender gaps across Alberta; however, no similar legislation has been proposed yet.

British Columbia The Pay Transparency Act has no equivalent in British Columbia, but on March 5 2018 a private members' motion was made in regard to acknowledging the importance of gender equity in British Columbia.

For further information on this topic please contact Julie Robinson at Fasken by telephone (+1 613 236 3882) or email (jurobinson@fasken.com). The Fasken website can be accessed at www.fasken.com.

Endnotes

(1) For further information, please see "Proposed Pay Transparency for Ontario Emloyers and the Push for Pay Equity for Federally-Regulated Employers".

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