The Ontario government has initiated a public consultation for the proposed Pay Transparency Act (the Act). The Act was initially due to come into force on January 1, 2019, but is currently on hold.
The most recent statistics regarding the gender wage gap show that, on average, in Ontario, women earn about $0.89 for every $1.00 that men earn. To address the issue, the Ontario government proposed the Act last year.
The Act is a legislative measure that is intended to address the gender wage gap by imposing reporting requirements on employers and enabling more informed discussions between employers and employees regarding compensation, gender pay differences, and workplace practices.
The Act does not change existing requirements to pay equal wages for equal work regardless of gender under the Employment Standards Act. The purpose of the Act is to increase transparency of pay and workforce composition and eliminate gender and other biases in hiring, promotion, and pay practices through increased disclosure and dialogue about inequities.
Pay Transparency
The proposed legislation contains provisions that require employers to include a range of expected compensation in all publicly advertised job postings and prohibit employers from seeking compensation history information of a job applicant. However, if a job applicant voluntarily discloses previous compensation, there is nothing in the Act to prohibit the employer from considering or relying on that information.
Employers would further be prohibited, under the Act, from reprimanding employees for making inquiries or disclosing compensation to other employees and/or inquiring about the employer’s compliance with the Act.
Reporting Requirements
Importantly, employers with 100 or more employees would be required to submit an annual pay transparency report to the Ministry (the Executive Council of Ontario) that contains information about the employer’s workforce and differences in compensation between men and women.
Employers would be required to calculate the average and median hourly wage gap of their workforce, as well as calculate the proportion of men and women in each pay gap to determine where women are represented in the organization. The exact nature of the information that will have to be tracked and reported by employers will be determined by regulations to be enacted under the Act.
The Ministry will publish the submitted reports and the employer must also post the report online, or in at least one conspicuous place in the workplace.
Employers Have the Opportunity to Provide Input
The public consultation is an opportunity for employers, that would be subject to the reporting requirement, to weigh in on wage gap calculations, the reporting period, and the costs associated with compliance with the Act.
Submissions can be made here until April 5, 2019.
Although the legislation will likely be amended pursuant to the consultations, it will have a significant impact on employer obligations and employee rights with respect to pay transparency once it does come into force.
If you require more information or have questions about the Pay Transparency Act or related issues, please contact the Toronto employment lawyers at Sultan Lawyers by telephone at 416-214-5111, by here, or by filling out the form below.