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Bill 3: Pay Transparency Act, 2018 for Employers in Ontario

Ontario is the First Canadian Province to Make Pay Transparency Official, with Bill 3

On April 26, 2018, the Ministry of Labour announced the passing of Bill 3: the Pay Transparency Act, 2018. Formerly introduced as Bill 203, the Act sets out certain requirements for the disclosure of information about compensation. This applies to both employees and prospective employees in providing greater transparency of pay in employment. The purpose of this new labour law is, in part, an effort to close the wage gap between men and women in the workplace. When it comes to hiring and payment practices, the Act increases an employer’s focus towards job requirements and applicants’ qualifications.

The “Then Now Next” Program

The Ontario Government has and continues to take several steps to build fairer, better workplaces, most of which have come from Bill 148. Part of these efforts also extend to the “Then Now Next” Program, referring to Ontario’s strategy for women’s economic empowerment. The three-year plan focuses on gender equity through labour law changes, such as:

  • The minimum wage increase to $15 in 2019;
  • New workplace leave regulations for domestic or sexual violence; and
  • The Pay Transparency Act, 2018

Where these changes to employment regulations bring about operational adjustments to businesses, the Pay Transparency Act will require employers to adjust their recruitment and hiring practices to avoid financial penalties and notices.

What do Bill 3 and pay transparency mean for employers?

As of January 1, 2019, measures around pay transparency will come into effect and will impact employers in a number of ways. The Pay Transparency Act, 2018 will:

  • Prohibit employers from asking about an applicants’ pay history when applying for a position;
  • Require employers to include the expected salary or range of compensation for the position they are advertising;
  • Establish a framework requiring employers to prepare pay transparency reports that include information about their workforce composition and differences in salary with respect to gender and other prescribed characteristics;
  • Enforce that it is unlawful for employers to intimidate, dismiss, or otherwise penalize employees for discussion or disclosing their compensation; and
  • Allow employees to ask their employer to comply with the Act.

Now is the time to make sure your workplace is prepared for Bill 3. Protect your business by making sure your policies and procedures are up to date. Review your employee management approach and take action to revise your hiring practices when it comes to pay transparency. For more information about the changing labour laws around pay equity, read about Equal Pay For Equal Work.