On April 26, 2018, Ontario passed the Pay Transparency Act, 2018 (the “Act”). The legislation is part of a larger provincial initiative designed to remove barriers to equality in the workplace, particularly in the context of compensation and hiring practices.

Effective January 1, 2019, Ontario employers will be:

  1. prohibited from either directly or indirectly asking candidates about their past compensation;
  2. required to post a compensation rate or range for all public job advertisements; and
  3. prohibited from reprising against employees who make inquiries about compensation practices, or otherwise discuss their compensation.

In addition, the Act introduces a requirement for large employers to prepare pay transparency reports setting out information relating to variations in workforce compensation based on gender and other prescribed diversity characteristics. Employers with 250 or more employees will be expected to comply by May 15, 2020, and employers with 100 or more employees will be expected to comply by May 15, 2021.

A consultation process will soon be initiated by the Ministry of Labour to assist in establishing the prescribed reporting framework.

As enforcement mechanisms, the Act contemplates the appointment of compliance officers who are authorized to conduct workplace audits, issue notices of contravention and impose financial penalties.

The Act introduces numerous obligations unprecedented in Canada that will necessitate a review of workplace hiring and compensation practices.