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Ontario Government Announces Plan for Pay Transparency

Whitten and Lublin | May 09, 2018

In addition to the Fair Workplaces Better Jobs Act, the Ontario government has just announced its plans to implement further changes. The government is seeking to improve pay transparency, most notably in attempts to close the gap between males and females. This will be done through separate legislation.

According to the Ontario website, the new legislation will likely require the following:

  • Require all publicly advertised job postings to include a salary rate or range
  • Bar employers from asking a job candidate about their past compensation
  • Prohibit reprisals against employees who discuss or disclose compensation
  • Establish a framework to require larger employers to track and report compensation gaps based on gender and other diversity characteristics, to be determined through consultation. Once fully implemented, these measures would require employers to publicly post that data within their own workplaces, in addition to reporting them to the province.

These are basic details that leave a lot of unknowns for employers and employees. For instance, how detailed will the disclosure of compensation structures need to be in job postings? As a businesses strategy, iincentive-drivencompensation schemes are key elements to a businesses’ strategy for increasing labour productivity. This includes components that go beyond base pay, such as commissions and bonuses, which may be required to be disclosed under these proposed mandates whether or not a business feels it is in its best interest. Conversely, there is also an issue of privacy on the employees’ end. In essence, every employee and member of the public will be able to gather a rough idea of an individual’s compensation whether or not this individual wishes their compensation to remain private.

In addition, under the proposed changes, employers will no longer be permitted to enquire about an employee’s or candidate’s past compensation, nor will employers be able to punish employees for disclosing their pay within the workplace. The theory being that these measures will limit the effect gender has when negotiating pay as it pertains to current gender-wage-gaps.

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