The Government of Ontario passed the Pay Transparency Act, 2018 (the “Act”) on April 26, 2018. This legislation forms a key component of the Government’s initiative known as Then Now Next: Ontario’s Strategy for Women’s Economic Empowerment which sets out a three-year proposed plan to increase gender equity, challenge bias and eliminate barriers women face at work, at home and in their communities.

Employers should be aware of the following four requirements set out under the Act:

  1. No Inquiries about Compensation History. Under the Act, employers are prohibited from seeking compensation history information about an applicant by any means whether personally or through an agent. However, employers will still be permitted to seek information regarding ranges of compensation or aggregate compensation provided for positions comparable to the position for which the applicant is applying. An applicant is permitted to disclose their compensation history to potential employers voluntarily and without prompting.
  2. Compensation Range in All Job Postings. Employers that publicly advertise job openings will be required to include information about expected compensation, or the range of expected compensation, for the posted position.
  3. Produce Pay Transparency Reports for the Ministry of Labour. Employers with more than 100 employees (or as prescribed) will be required to provide a pay transparency report to the Ministry of Labour, which it will publish or otherwise make available to the public. While the contents of such a report will be prescribed by regulations, they will include information relating to the employer, its workforce composition and differences in compensation in its workforce with respect to gender and other prescribed characteristics. Employers will be required to post their pay transparency reports online or in a conspicuous place in the workplace. The first report for an employer with 250 or more employees must be submitted no later than May 15, 2020, while the first report for an employer with 100 or more employees but fewer than 250 employees must be submitted no later than May 15, 2021.
  4. Anti-Reprisal. Under the Act, employers are prohibited from intimidating, dismissing or otherwise penalizing employees who:
    1. make compensation inquiries;
    2. disclose compensation information to other employees;
    3. inquire about an employer’s pay transparency report;
    4. provide the Ministry of Labour with information regarding an employer’s compliance or non-compliance; and
    5. ask their employer to comply with the legislation.If you have any questions regarding pay transparency and the requirements under the Act, please do not hesitate to contact one of the members of our Labour & Employment group.

The majority of provisions of the Act will come into force on January 1, 2019. This provides Ontario employers with the remainder of 2018 to prepare for compliance with the Act. Larger employers also have time under the Act to prepare for compliance with the pay transparency reporting requirements. The Ontario Government will likely introduce regulations under the Act, including specific requirements regarding the pay transparency reports in coming months. We will keep you posted on any updates and consultation processes.