Pay Transparency

On March 6 of this year, the Ontario government introduced Bill 203, the Pay Transparency Act. The bill is part of a growing push to narrow the persistent gender wage gap. The gap, which is as high as 30 per cent in some sectors, has barely budged in the last decade. If passed into law, the bill will hopefully help to create a more equitable employment landscape for all Ontario workers.

Pay Transparency for Ontario Workers

In its present form, the Act demands greater transparency from businesses and organizations about their employees’ compensation.

It’s often frustrating for job-seekers to come across a job posting without information about the position’s compensation. It can feel futile to go through all the effort and stress of a resume, cover letter and an interview only to learn that the hourly rate or salary for the position to which you are applying is well below your expectations. On the other hand, being asked to state your salary expectations can feel like rolling the dice. Balancing your desire for fair compensation for your time and talents and conversely not wanting to seem exorbitantly demanding and entitled is a tight rope to walk.

Bill 203 seeks to remedy this by requiring that public job postings state the position’s salary or salary range. Furthermore, Bill 203 would prevent employers from asking job candidates about their compensation at past jobs. This way, being underpaid or overpaid in the past, won’t influence your future compensation.

Another significant barrier to pay equity is not knowing how much your colleagues are making. In many workplaces, it is either forbidden or taboo to ask coworkers what they’re taking home at the end of the month. This makes it easy for employers to pay employees different amounts for the same job. The Pay Transparency Act would prohibit employers from punishing or in any way making a reprisal against employees for discussing or disclosing compensation between one another.

Tracking Pay Transparency

The Act would also require that some employers file ‘pay transparency reports’ tracking compensation gaps in gender and other diversity characteristics. It is not yet clear which employers would be required to submit these reports but it is reasonable to assume that such audits would only be required of larger companies and those in sectors where the wage gap is known to be the most egregious. Failure to comply with the act would lead to an investigation by, and penalties from, compliance officers.

The Act raises a lot of questions for employers, especially regarding the frequency of transparency reports, how compliance will be assessed and what penalties from compliance officers would look like. Much is and will remain up in the air as this Bill makes its way through the legislative process. If passed, the Act will come into effect on January 1 2019.

KCY at LAW Can Help

If you are concerned about how the Pay Transparency Act would affect your business or organization, or if you would like to develop workplace policies to improve gender and pay equity in your workplace, call the employment law experts at KCY at LAW to book your consultation today! 905-639-0999