Ontario’s proposed pay transparency bill: What it could mean for employers

Conversations about the gender pay gap are top of mind amongst many employers and their employees. And now, the Ontario government has proposed Bill 203, the Pay Transparency Act, 2018 which, if passed, will require certain employers to track and report compensation gaps based on gender or other diversity measures. It would also require all employers to comply with rules regarding job postings, recruitment questions and compensation disclosure. While Ontario is the first province to propose ‘pay transparency’ to address the gender wage gap, similar legislation already exists in Germany, Australia and the United Kingdom.

If passed, the bill could include the following provisions, which would be effective January 1, 2019:

• Publicly advertised job postings would need to include a salary rate or range
• Employers would not be able to ask job candidates about their past compensation (but employees could share this information unprompted)
• Employers will be prohibited from reprisals against employees who discuss or disclose compensation.
• Large employers would need to report compensation gaps based on gender and other diversity characteristics. This information would need to be publicly posted in the workplace and disclosed to the province. This reporting requirement would only apply to Ontario public service initially, followed by employers with more than 500 employees, and would eventually extend to employers with more than 250 employees.

What employers need to be aware of

On a micro level, this type of legislation could significantly impact recruiting and hiring practices for employers of all sizes. The added transparency could affect organizations that find a competitive advantage in avoiding disclosing pay. Furthermore, these changes could lead to disharmony amongst employees, especially those who perform the same job for less than their colleagues.

Lastly, while this change has been proposed in Ontario only, other provinces may be considering adopting the same or similar approaches. One only needs to look at Quebec’s recently announced proposed changes to their minimum employment standards legislation on the heels of Ontario’s Bill 148 as an example.

Ceridian will continue to monitor Bill 203, Pay Transparency Act, 2018 as it moves forward.