How Would Ontario’s Proposed “Pay Transparency” Bill Effect Employers and Employees?
Drawing from examples of laws implemented in Iceland, Germany, the United Kingdom, and Australia, proposed legislation in Ontario—referred to as the “pay transparency” bill—aims to end wage inequality between men and women in the province. Laws prohibiting wage discrimination have been in place since the 1950s, yet a significant pay gap between men and women, with estimates as a high as 29 percent in some sectors, persists in Ontario.
The new bill would require large companies to track information regarding compensation gaps between genders, as well as other characteristics of diversity. The companies would then be required to disclose this information to the province.
Under the “pay transparency” bill, salary rate or range must be included on all publicly advertised job announcements. In addition, employers may not ask job applicants about their past compensation and employers are prohibited from taking any adverse action against employees for disclosing or discussing compensation.
If passed, the new law will first apply to public employers before extending to private employers with 500 or more employees, and eventually private employers with 250 or more employees.
Key Takeaways for Employers
With the introduction of any new employment law, it is important to take proactive steps to ensure full compliance across company policies, procedures, systems, and trainings. If the new “pay transparency” bill is passed, employers with 250 or more employees should:
- Revise policies and procedures within human resources department to ensure compliance with job announcement requirements.
- Implement a system for tracking employee compensation packages to reflect characteristics of gender and other diversity characteristics to ensure compliance with tracking and reporting requirements under the new law.
- Track forms of compensation other than wages, such as stock options and other perks, to ensure equality of compensation packages as a whole.
- Develop or revise internal ethics policies to prohibit any retaliatory or adverse employment action in response to employee disclosure or discussion of compensation.
- Develop and implement company-wide training on the requirements of the new “pay transparency” bill, as well as the new policies and procedures implemented within the company to ensure compliance.
- Include training sessions for managers and human resources regarding their responsibilities under the new law, as well as employee-wide training to educate employees about their rights.
Key Takeaways for Employees
As an employee in the Province of Ontario, this new legislation—if passed—will expand your rights in the workplace and, hopefully, accomplish its goal of narrowing and eliminating the wage gap between men and women in the workplace. Under the “pay transparency” bill:
- You are entitled to information on salary rate or range as a job applicant.
- When interviewing for a new job, your prospective employer is not allowed to ask you about your salary history with former employers.
- Although through the tracking and reporting requirement, the new law creates an enforcement mechanism for existing anti-discrimination laws, you are still able to report wage discrimination in your workplace.
- Your employer may not prohibit you from discussing compensation with your co-workers or disclosing your salary and compensation package to anyone.
Contact an experienced employment lawyer: Rahul Soni for the right representation.