The government of Ontario announced today that it will introduce new legislation to require certain employers to track and publish their compensation information. The proposed legislation is part of the province’s initiative to advance women’s economic status and create more equitable workplaces (the initiative is titled “Then Now Next: Ontario’s Strategy for Women’s Economic Empowerment”). Today’s announcement comes on the heels of last week’s budget plan in which the federal government outlined proposed proactive pay equity legislation that would apply to federally regulated employers – see here for our article on the proposed federal legislation.

Key Takeaways

All employers except private sector employers with fewer than 10 employees are presently subject to pay equity legislation in Ontario. This legislation imposes an obligation on the employer to take specific steps to ensure gender pay equity and to prepare a Pay Equity Plan describing the steps taken, the outcome and any pay equity adjustments to be made. Employers who are not in compliance with the existing legislation should undertake a pay equity review in order to identify wage gaps and seek to remedy these gaps in advance of the new reporting requirements being implemented. Employers who are currently in compliance should anticipate that they will need to provide their compensation information directly to the province and also post this information in their workplace.

Proposed Legislation

According to the government’s news release, if passed, the new legislation would require certain employers to track and report compensation gaps based on gender and other diversity characteristics. Impacted employers would need to report the data to the province and post it publicly in their workplace. The reporting requirements would first apply to Ontario public service employers. They would later expand to employers with more than 500 workers, and then to employers with more than 250 workers. The diversity characteristics, beyond gender, that will fall within the scope of the legislation will be determined through consultation.

In addition, all employers will be subject to the following new requirements if the legislation is passed:

  • a salary rate or range must be stated in all publicly advertised job postings;
  • job candidates may not be asked about their past compensation; and
  • no reprisals may be made against employees who discuss or disclose compensation.

Current Legislation

At present, Ontario has pay equity legislation in place that applies to all employers except private sector employers with fewer than 10 employees. Pay equity is currently a self-managed process. The Pay Equity Act imposes an obligation on the employer to take specific steps to ensure that pay equity exists in the workplace and to prepare a Pay Equity Plan describing the steps taken, the outcome and any pay equity adjustments to be made. While there is no reporting requirement per se, the Pay Equity Office (“PEO”) has a monitoring program pursuant to which it audits individual workplaces to ensure compliance with the Act and an employer is required to submit key information in response if a request is made by the PEO. Monitoring activities are reported in the Pay Equity Commission’s Annual Report.

The government indicated that it looked to other jurisdictions to develop the proposed legislation, including the United Kingdom, Australia and Germany. In addition, California recently introduced a new law barring employers (and their agents) from inquiring about applicants’ previous salaries and benefits.

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