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Ontario Pay Transparency Legislation Could Be in Force by Jan. 1

Overview

The government of Ontario recently announced legislation—Bill 203, the Pay Transparency Act, 2018—that would require employers to track and publish compensation information. The goal of this legislation is to close the wage gap between women and men in the province.

Bill 203, which would establish new requirements for increasing hiring and payment practices transparency, has passed first reading and is making its way through the legislative process. The proposed legislation could be passed as early as Jan. 1, 2019.

In order to prepare for the legislation, organizations need to be aware of how Bill 203 could affect their business.

How Bill 203 Could Impact Your Business 

If passed, Bill 203 would impose a number of pay-related requirements on employers. Specifically, the bill would require the following:

  • Recruitment—Once in force, Bill 203 would prevent employers from asking for or seeking information regarding an applicant’s compensation history. However, applicants can volunteer this information if they are not prompted. During the recruitment process, employers would also be expected to provide a compensation range in publicly advertised job postings. Notably, these restrictions do not apply to any publicly available compensation information.
  • Transparency reports—If passed, Bill 203 would establish a number of reporting requirements related to compensation. Among these requirements, employers would have to publish pay transparency reports that highlight information related to the employer, its workforce composition, and compensation differences with respect to gender and other prescribed characteristics. In addition to submitting these reports to the government, employers would be required to post these reports online or in such a way that employees can easily view and access them. Specifics related to pay transparency reports, including their format and key features, will likely be finalized following a consultation period or once the legislation is passed.
  • Reprisal—One of the key features of Bill 203 is the way it prevents employers from taking retaliatory action. Under the proposed act, employers are prohibited from intimidating, dismissing or penalizing employees for doing either of the following:
    1. Inquiring about their compensation or pay transparency reports
    2. Giving information about the employer’s compliance or non-compliance with the bill’s requirements to the government

Enforcement measures will likely begin with Ontario’s public service organizations. After the initial consultation, the new rules will apply to employers with more than 500 employees, followed by employers with more than 250 employees. In addition, these new measures will work hand in hand with existing pay equity measures in Ontario, including the Equal Pay for Equal Work requirement found in the Employment Standards Act and the Pay Equity Act.

Once passed, the government may appoint compliance officers to conduct compliance audits. These audits could be performed without a warrant and monetary penalties would likely be enforced. While there is currently no official timetable, Bill 203 is primed to have a major impact on employer’s hiring practices and reporting requirements.

To learn more and read the current version of Bill 203, click here.

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