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04.09.2018 : News
Ontario is about to regulate pay transparency in the hiring process
The Ontario government passed Bill 3, the Pay Transparency Act 2018, on April 26, 2018. This Act will come into force on January 1, 2019, making Ontario the first province in Canada passing legislation regarding the regulation of pay transparency in the hiring process. This legislation is a part of the Ontario government agenda to promote gender equality and equal compensation.
What is the purpose of the Act?
Even though making distinction relative to an employee’s pay based on their gender is already prohibited by federal and some provincial laws, according to the Canadian Women’s Foundation, Canadian women workers earn an average of 26% less than men for every dollar, and that number increase substantially for racialized, indigenous, immigrant, elderly, LGBTQ women and women with disabilities. As reported by the Ontario Equal Pay Coalition, women with the same experience earn $7,200 less than their male peers per year.
The Pay Transparency Act, in concert with the Pay Equity Act will act as an effort to fight women poverty, as well as poverty in general. Indeed, candidates are often asked about their previous salary or salary history during the hiring process, and it has been determined that this information can influence negatively salary proposals, impacting women the most. This Act will make those practices discriminatory.
What is the content of the Act?
The Pay Transparency Act focuses on four key areas:
1. Compensation History
It will be prohibited for employers to request salary history information from a candidate, whether directly or by means of a third party. However, job applicants won’t be prohibited from voluntarily sharing their compensation history and employers who will have obtained such information legally won’t be prohibited from using it in determining compensation for the candidate.
2. Compensation range Information
Employers will be required to indicate the expected salary or the expected salary range in publicly advertised job posting.
3. Pay Transparency Reports
This section is meant to monitor medium or large corporations as only employers with at least 100 employees will have to provide those reports. Employers will be required to provide a pay transparency report to the Ontario Ministry of Labour containing its workforce demographic composition as well as differences in salary relatively to gender and other characteristics that have yet to be determined. Employers with 250 or more employees will have to submit their first pay transparency report by May 15, 2020, when employers with a range of 100–249 employees have to provide their first report by May 2021.
Candidates and employees will be protected against retaliation if they make an inquiry about their compensation, disclose their compensation to other employees, make inquiries about a pay transparency report or request from an employer to comply with the Pay Transparency Act. If an employee believes they have been discriminated or retaliated against in violation of this Act, they will be able to file a complaint with the Ontario Labour relation Board or settle by arbitration under a collective agreement. Should the Ontario Labour relation Board investigate a complaint, the employer will have the responsibility to bring proof that they have not breached the law.
Some regulations have yet to be decided with regards to some details of the Act, such as which social-economic categories to track differences in salary, besides gender; as well as the range of penalties applicable to companies that will infringe the Pay Transparency Act.
Mintz Global Screening encourage companies to keep themselves up to date with laws and regulations affecting Human Ressources management as well as background screening processes. It is part of our mission to help you stay compliant with provincial and federal laws, don’t hesitate to communicate with us for any question or concern relative to your background screening process.
This publication is provided for educational and information purposes only and is not intended to provide legal advice. Mintz Global Screening does not provide legal advice nor do we assume any responsibility for any liability or damages resulting from this information. We encourage you to contact your own legal counsel for guidance. Mintz Global Screening reserves the right to update and modify the information provided.
Pay Transparency Act, 2018
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