Ontario Pay Transparency Requirements

Pay transparency has become a new feature in Canada, first seen in British Columbia and now provinces like Ontario are adopting these new features. Employers need to understand their obligations and begin to adapt to these new policies. This blog outlines the key requirements in Ontario, compares them to British Columbia’s regime, and highlights broader trends and compliance tips.

Ontario Law: New Pay Transparency Rules

Ontario has introduced pay transparency requirements through the Working for Workers Four Act, 2024 (Bill 149) and the Working for Workers Five Act (Bill 190).

Key Dates and Requirements:

• July 1, 2025, employers with 25 or more employees must provide specific pre-employment information.

• January 1, 2026, new rules for job postings and pay transparency, must include salary or wage ranges in all publicly advertised job postings (Ontario requires that a salary range be included unless the position pays more than $200,000 a year) and disclose the use of artificial intelligence in hiring processes (the January 1, 2026 changes apply to employers with 25 or more employees)

• Employers are prohibited from asking job applicants about their compensation history.

• Job postings must also disclose whether artificial intelligence is being used to screen, assess or select applicants (correct, but it’s part of a broader requirement to indicate the use of AI in any part of the hiring process, and applies ONLY to publicly advertised job postings)

• While specific penalties for non-compliance with pay transparency are not always detailed, general ESA violations can result in fines up to $50,000 for individuals and $100,000 for corporations on a first offence.

• Bill 149 does not specify separate penalties for pay transparency violations, meaning enforcement will fall under general ESA provisions unless regulations add specific fines later

Additional Job Posting Requirements, starting January 1, 2026:

• Indicating whether a position is an existing vacancy
• Prohibition on requiring Canadian work experience
• Requirement to inform applicants of hiring decisions within 45 days of interviews

What Employers Should Do:

Employers should begin by reviewing and updating job postings accordingly to ensure that they follow the new regulations. They can also hire an audit process to ensure they remain compliant. If employers have 100+ employees, they should begin preparing to collect and analyze pay data for annual reporting. Employers should also train HR and management on anti-reprisal rules and employee rights.

BC Law: Pay Transparency in British Columbia

British Columbia’s Pay Transparency Act, effective May 2023, serves as a model for other provinces, including Ontario.

The pay transparency laws include:

• Salary Ranges in Job Postings: Since November 1, 2023, all public job postings must include the expected salary or wage range
• Salary History Ban: Employers cannot ask about an applicant’s pay history unless it is publicly available.
• Anti-Reprisal Protections: Employers cannot discipline or retaliate against employees for discussing pay with colleagues.
• Pay transparency reports: Employers above a certain size must post annual pay transparency reports by November 1 each year.
• Online Reporting Tool: BC provides an online tool for submitting and publishing reports based on employer size.

Compliance Tips:

• Begin organizing pay and gender data early to meet reporting deadlines.
• Use BC’s Pay Transparency Reporting Tool to familiarize yourself with requirements.
• Review internal policies to ensure compliance with discussion and disclosure rights.

National and Broader Context

Pay transparency is not just a provincial issue. Federally regulated employers in Canada must also include salary ranges in job postings and disclose pay scales to employees upon request. Quebec and several Atlantic provinces have introduced similar rules, with varying penalties for non-compliance.

Why Pay Transparency?

Pay transparency aims to promote a fair and inclusive workspace. Workers and the public have supported this transparency, and employers will benefit from being transparent with their employees and promote trust in their professional relationships. This will assist with better recruitment and outcomes and reduce legal risk.

Compliance Checklist for Employers

• Audit Job Postings: Ensure all postings include salary/wage ranges.
• Update Hiring Policies: Remove questions about salary history.
• Prepare for Reporting: Collect demographic and pay data, and plan for annual transparency reports if required.
• Educate Staff: Train managers and HR on new requirements and employee rights.
• Monitor Legislative Updates: Stay informed about future changes and deadlines.

Conclusion

Ontario’s pay transparency legislation, effective in stages through 2025 and 2026, aligns the province with a national movement toward greater wage equity. Employers must act now to review their practices, update job postings, and prepare for new reporting obligations. By embracing transparency, organizations can build fairer workplaces and stay ahead of legal requirements.

If you have questions about pay transparency or your rights, we encourage you to contact employment lawyers Sultan Lawyers online or by telephone at 647-952-9353 today.