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Canada: Ontario Legislates Pay Transparency through the Pay Transparency Act, 2018

Ontario has become the first province in Canada to legislate pay transparency through the Pay Transparency Act, 2018 (the “Act”), which received Royal Assent on May 7, 2018. The Act is expected to come into force on January 1, 2019. The Act will apply to the Crown as an employer, as well as to all employers and employees as defined in the Employment Standards Act, 2000.

The purpose of the Act is to promote gender equality and equal opportunity in employment in the workplace, and to eliminate gender and other biases in pay practices. In accordance with this goal, the Act will require employers’ compensation practices to be transparent.

As of January 1, 2019, the Act will prohibit employers from seeking compensation history information from applicants. It will also require employers to include information about the expected compensation or range of compensation for any position being advertised in public job postings.

Larger employers (with 100 or more employees) and certain prescribed employers will be required to prepare pay transparency reports. These reports must include prescribed information about the employer, the employer’s workforce composition, and differences in compensation in the employer’s workforce with respect to gender and other prescribed characteristics. The Ministry will also be required to publish or make these pay transparency reports available to the public, using the Internet or other means.

The Minister may appoint compliance officers to enforce the Act. Such officers may conduct audits and issue notices of contravention. Penalties for contraventions are yet to be defined; these would eventually be determined in accordance with regulations established under the Act. The limitations period for the issuance of notices of contravention would be one (1) year after the occurrence of the last act or default upon which the contravention is based.

The Act includes an express anti-reprisal provision. Employees may file complaints regarding alleged contraventions of this provision. The forum for the complaint will vary depending on whether the employee is unionized, subject to the application of the Police Services Act, 2018, or non-unionized.

While the Act has already been enacted, it will only come into force on January 1, 2019. However, after 15 years of governance by the Ontario Liberal Party, the recent provincial election has resulted in the Progressive Conservative Party of Ontario becoming the new majority government in the province of Ontario. At this time, it is unclear whether any changes will be made to this legislation by the Progressive Conservative government. Employers operating in Ontario are encouraged to consult local labour and employment counsel and carefully monitor the implementation of this legislation.