May 9, 2018

Pay Transparency Legislation Passed

 

The Ontario Government’s Bill 3, Pay Transparency Act, 2018 has passed third reading. The legislation will require that compensation be based on a job’s requirements and a candidate’s qualifications, and that certain employers track and publish information about compensation in their organizations. The new rules are scheduled to come into effect on January 1, 2019.

The changes are summarized in detail below. In short, the Act will:

  • Require that all publicly advertised job postings include a salary rate or range;
  • Prevent employers from asking job candidates about their past compensation;
  • Prohibit reprisals against employees who discuss or disclose compensation; and
  • Establish a framework to require larger employers (see below) to track and report compensation gaps based on gender and other diversity characteristics.

The Government has announced that the proposed reporting measures will begin with the Ontario Public Service (OPS). Following consultation, the proposed reporting measures will then apply to employers with more than 250 employees in 2020 and, in 2021, to employers with more than 100 employees.

Pay Transparency Act, 2018

  1. Employers will be prohibited from seeking compensation history information from job candidates (s. 4).
  2. Employers will be required to include information about expected compensation or range of compensation in any publicly advertised job posting (s. 5).
  3. Employers will be required to prepare pay transparency reports, no later than May 15 each year, that include information about the employer, the employer’s workforce composition, and differences in compensation in the employer’s workforce with respect to gender and other prescribed characteristics (s. 6).
    • Employers with 250 or more employees must submit the first pay transparency report no later than May 15, 2020.
    • Employers with 100 or more employees but fewer than 250 employees must submit the first pay transparency report no later than May 15, 2021.
    • Employers who are required to prepare a pay transparency report must post it online or in at least one conspicuous place in the workplace.
    • The Ministry will publish, or otherwise make available to the public, the pay transparency reports submitted to it.
  1. Employers will be prohibited from intimidating, dismissing, or otherwise penalizing employees for, among other things, making inquiries about the employee’s compensation, disclosing their compensation or asking the employer to comply with the Act or the regulations (s. 7).
  2. Compliance officers will be appointed to enforce the Act (s. 8).
    • Compliance officers will be permitted, without a warrant, to conduct a compliance audit of an employer (s. 11).
    • If the Act is contravened, compliance officers will be permitted to issue a notice and specify a penalty for the contravention (s. 12).
    • A notice of contravention of the Act can be disputed within 30 days after the date of service of the notice (s. 13).
  3. The limitation period for a notice of contravention will be one year after the occurrence of the last act or default upon which the contravention is based (s. 16).

LEGAL DISCLAIMER: This article is for informational purposes only and is not intended to provide legal advice, which in all circumstances must be tailored to the specific facts of any problem. You should obtain a proper legal consultation in order to determine how this article applies to your specific situation.
Please feel free to contact Israel Foulon LLP to learn more at 416-640-1550.

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