'These areas will be of concern for HR and employers coming forward'
Ontario continues to be busy when it comes to introducing new legislation, with another rollout of reforms for employment standards officially announced.
Bill 149 covers several areas of note for HR, such as recruitment — involving pay transparency, the use of artificial intelligence (AI) and work experience — along with compensation issues around vacation pay, tips and wage deductions.
Already past second reading as of Nov. 23, the new rules could take effect sooner than later, so HR will want to start preparing now, say employment law experts.
“There’s still a lot of uncertainty, but it looks like for sure these areas will be of concern for HR and employers coming forward,” says Samuel Keen, an associate at Norton Rose Fulbright in Toronto.
Pay transparency in job ads
One of the more notable changes concerns pay transparency when it comes to job ads.
“Every employer who advertises a publicly advertised job posting shall include in the posting information about the expected compensation for the position or the range of expected compensation for the position,” says the proposed legislation.
As for the “range,” that’s “subject to such conditions, limitations, restrictions or requirements as may be prescribed,” says the bill.
When you look at the legislation, a lot is left to still be hashed out in regulations, says Keen.
“In tackling this notion of the requirements of what a salary range looks like, that still remains to be seen, because they've left it open for regulations to be enacted that provide for substantive requirements,” he says.
“The devil is really going to be in the details in terms of any requirements that are imposed on this notion of providing a range in a job posting, as opposed to the precise compensation.”
Generally speaking, a range is going to provide an employer with greater flexibility, says Keen, “and the ability to consider idiosyncratic employee factors, like their level of experience, particular skills and trainings and things of that nature.”
Pay equity and pay transparency
But one of the bigger practical implications is this will mean a greater level of pay transparency within an organization, he says.
“I think employers really have to walk into negotiations with their employees and, even when they're not in the explicit negotiation stage, just come at it from a perspective of employees are probably going to be better armed with knowledge about market compensation for their positions.”
Will these changes be onerous for HR? That depends on the employer and whether or not they already have that pay information, says Giovanna Di Sauro, an associate at DLA Piper in Toronto.
“For example, unionized employers already have that information; non-unionized employers may or may not have that readily available.”
But it's not entirely clear whether the pay transparency requirements and regulations in Ontario are going to be as extensive as in other places, such as British Columbia, she says.
“And part of the reason for that may very well be that in Ontario, we already have pay equity legislation as well… it will be interesting to see what the interplay between the pay transparency requirements and the pay equity requirements are going to be.”
Focus on AI use in hiring
There’s been a lot of attention lately on the use of AI in the workplace, and the Ontario government is getting onboard, looking for greater oversight when it comes to hiring and the new tech, according to Bill 149:
“Every employer who advertises a publicly advertised job posting and who uses artificial intelligence to screen, assess or select applicants for the position shall include in the posting a statement disclosing the use of the artificial intelligence.
The bill is very broadly worded, says Di Sauro.
“We don't have guidance right now in terms of what that statement has to include, what it needs to look like, and whether any employers may be exempted from that requirement. This is another provision where the bill provides the provides for the possibility of an exception.”
“Artificial intelligence” is not defined in the bill, so its meaning will have to be set out in the regulations, she says.
When you're talking about the notion of AI, it's a very buzzwordy concept, says Keen.
“The exact dividing line between what is AI and what is not AI is somewhat of a debated topic. So I think there's going to have to be some meaningful guidance from the government in the regulations as to what exactly AI is and what that means for employers.”
And it's going to be important for HR professionals to understand exactly how their systems work to the extent that there is some level of automation in the processes, he says.
It’s possible that HR departments or employers may be using software with AI components that they’re not aware of, says Di Sauro.
“That's another potential problem that employers should keep in mind, they may need to review what kind of software, if any, they are using to screen, assess or select applicants, and determine whether the tools that they're using make use of artificial intelligence.”
AI and discrimination complaints
Another practical implication with the push for transparency around AI is the potential for claims of discrimination, says Keen, given the allegations we’ve seen around bias and historical prejudices with this tech.
“One of the allegations we see levelled at AI is that it replicates certain preferences and it's discriminatory in that way,” he says.
As a result, employers should be aware that if they are disclosing the use of AI in their job selection process, there might be a perception among potential applicants that there could be a greater risk of certain prejudices arising from that.
“It’s not unreasonable to expect an uptick in such claims if the front-end people are made aware that their application is being subjected to AI tools,” says Keen.
“It comes back to this idea that it's important if you're going to be using AI tools to understand how they work, the data sets they're trained on and whether the service provider of those tools has done anything to make sure that it's not discriminating against applicants who are applying to jobs.”
Canadian work experience
In the interest of combatting labour shortages, the Ontario government is also proposing a change around employer requirements in their recruitment efforts: “No employer who advertises a publicly advertised job posting shall include in the posting or in any associated application form any requirements related to Canadian experience.”
But the need for Canadian experience can vary by employer and by position, says Di Sauro.
“I strongly suspect that we will likely see exceptions in the regulations once they're issued,” she says. “There may be professions where having some sort of Canadian-based training may be required.”
Changes around tips, gratuities
Aside from recruitment, Ontario’s proposed new laws also cover various aspects of compensation. One of the more notable areas includes tips and gratuities, with the types of payments — such as cash, cheque or direct deposit — clearly outlined.
In addition, employers must post their policy “in at least one conspicuous place in the employer’s establishment where it is likely to come to the attention of the employer’s employees.
This is a notable advancement, says Keen, particularly in the posting of the policy.
“There's also record retention requirements in relation to the posting. So I think that is something [where] the legislation does do quite a meaningful build on top of what was already in place.”
The bill proposes to amend the employment standards by setting up the method of payment of tips of other gratuities, says Di Sauro, and while Ontario already has rules around these payments, the latest amendments “offer further clarification on what those rules are.”
Clarifying vacation pay
Also in the spotlight is vacation pay, with the Ontario government stating “The employer may pay the employee vacation pay that accrues during a pay period on the pay day for that period if the employee has made an agreement with the employer that it may be paid in that manner and… the employer may pay the employee vacation pay at a time set out in an agreement that the employee has made with the employer.”
The government is re-enacting a section of the Employment Standards Act, to clarify that some of the methods of paying vacation pay that are already set out can only be used if the employee has agreed to them, says Di Sauro.
“What it's doing is clarifying how vacation pay is to be paid and in what situations you may be paid differently,” she says.
“Once the bill is in force, [employers need to] find out whether the manner by which they're paying vacation pay actually requires employee consent, or whether they continue to pay vacation pay in the normal course.”
These provisions aren’t major changes, says Keen, and are more about language accessibility and cleanup.
“From a substantive perspective, I think it's more about making the legislation more friendly towards employees, if they're taking a look at it and reading it themselves. And also perhaps even employers who are just trying to disentangle the various requirements of the ESA, which can be quite technical and prescriptive at times.”
