The Ontario government has passed Bill 3, Pay Transparency Act, 2018. The Act imposes requirements on employers to promote equality of compensation between men and women, and to increase the transparency of information regarding compensation and workforce composition. The Act is set to come into force on January 1, 2019.

Key Takeaways

The fate of the Act will likely depend on the outcome of the provincial election on June 7, 2018. However, it is important to remember that making pay distinctions based on gender is already prohibited by employment standards legislation. Employers should prepare for pay transparency reporting by taking proactive steps, as follows:

  • review and update policies and practices relating to pay rates;
  • identify compensation gaps based on gender; and
  • make any upward adjustments needed to compensation after taking the above actions.

Employer Obligations

Much of the Act is consistent with Bill 203, introduced on March 6, 2018 (which we wrote about here). For ease of reference, we provide the following list of key requirements that have been included in the final version:

  • a salary rate or range must be stated in all publicly advertised job postings;
  • job candidates may not be asked about their past compensation;
  • no reprisals may be made against employees who discuss or disclose compensation;
  • employers with 100 or more employees and prescribed employers (i.e., prescribed by forthcoming regulations to the Act) must track and annually report compensation gaps based on gender and other prescribed characteristics (in “pay transparency reports”);
  • such employers will need to post their pay transparency report online, or in at least one conspicuous place, in every workplace of the employer; and
  • the province will also publish pay transparency reports, which may be done online.

The initial reporting dates are staggered:

  • employers with 250 or more employees must submit their first report by May 15, 2020; and
  • employers with 100 to 249 employees must submit their first report by May 15, 2021.

“Compensation” is defined as “all payments and benefits paid or provided to or for the benefit of a person who performs functions that entitle the person to be paid a fixed or ascertainable amount”. However, other details of what information is to be tracked and reported on are reserved for the regulations which have not yet been released. Also reserved for the regulations is information as to:

  • which employers, in addition to those with 100 or more employees, will be subject to the tracking and reporting requirements;
  • the characteristics, other than gender, to be tracked and reported on; and
  • the amount of the penalties that compliance officers will be permitted to impose upon employers who are found to contravene pay transparency requirements.

With thanks to Ian Attema for his assistance with this article.