Legislation covers AI use, Canadian experience requirements and pay transparency
“This is part of a broader theme to raise transparency — we're seeing transparency around pay, transparency around qualifications, but also now there's transparency around how the recruitment process works.”
So says Heather Cameron, partner at Norton Rose Fulbright Canada, in discussing Ontario’s new rules — as part of the Working for Workers Act, 2023 which recently received royal assent — that will have a major impact on hiring efforts by employers.
For one, an employer’s use of artificial intelligence (AI) must be disclosed to job candidates. In addition, employers will be prohibited from requiring Canadian experience in job postings or application forms; and thirdly, each job posting must include the expected range of wages or salary for the position.
A lot of these changes in this legislation, arguably, are things that would come up in an interview anyways, says Anthony Kwong, associate at Mathews Dinsdale & Clark, “in terms of how AI might be used, or what the expected or offered salary range is, or things like that. So, it's interesting that these are actually becoming legislated when it was open to employees to ask these sorts of questions anyways.”
How do you use AI in recruitment?
Through the Working for Workers Act, 2023, the Ontario government is mandating that employers reveal — in the job posting — if they are using artificial intelligence “to screen, assess or select applicants for the position.”
While more details are needed for how this will play out, this rule follows on the heels of transparency in previous legislation, such as electronic monitoring to equip workers in Ontario and job applicants with more information about how their data may be collected and used, says Cameron.
It’s good for employers to know as well, as it may raise the spectre of discrimination.
“For example, if your AI is programmed solely on the basis of resumes, and all the resumes are from male candidates, your AI may be inadvertently screening out people with non-stereotypically male names,” she says.
“HR professionals and companies and employers should think about the AI they're using, the data they're feeding into it, and what risks they may be exposing themselves to — and potentially what candidates they might be missing out on.”
This could be an opportunity for employers to take a deeper look into exactly how they are using AI, says Kwong, “and whether the requirement to disclose that fact could maybe lead to a higher risk of applications being tailored towards the AI, and to consider the impact that that might have on whether the best or the most qualified candidates are actually being identified and making it past the AI.”
This move by the Ontario government is recognition that the use of AI is becoming more widespread, he says.
“This could be seen as an example of the government actually being a little proactive, and looking towards the future and the increasing use, and increasing degree of use, of AI.”
And while it’s a small first step, says Kwong, “I would suggest that this is a sign that there's probably further scrutiny or regulation coming on the use of AI, not just in recruitment, but in the workplace generally.”
Privacy considerations with AI
Fundamentally, the transparency is to allow people to know how decisions are being made or who's making them — or not making them, as the case may be, says Cameron.
But there are also privacy pieces here.
“I think it's helpful for candidates to know whether or not AI is being used; I mean, AI is only as good as the information that goes into it,” she says.
“If your resumes that you're feeding into your AI aren't anonymized, then your current employees may come to know that their information is being used in that way. And the more that personal information is being used or shared, or what have you, there's different avenues for a potential privacy breach as well.”
But will it be enough for an employer to just say it uses AI?
“Are you using AI just to screen candidates, or are you using them to weigh an assessment, by using AI to determine who gets interviews?” says Cameron.
“I would expect to have that level of information, and not the blanket statement that ‘We sometimes use AI,’ to be in keeping with the purpose of the legislation, which is overall being to increase transparency for candidates.”
Restricted: ‘Canadian experience required’
As an expansion of some of the amendments enacted under the Working for Workers Act, 2021 — concerning internationally trained individuals in a regulated profession — Ontario employers will now be prohibited from requiring any requirements related to Canadian experience in a “publicly advertised job posting” or “any associated application form.”
This could be a significant change for employers, says Cameron.
“It may depend on which sectors that they will apply to; there may be certain sectors where the government thinks that this is more crucial in terms of the rollout… but the idea is that we don't want to be excluding people from the recruitment pipeline and discouraging people from [applying],” she says.
“My understanding is that the intention and the potential effect of these new Bill 149 prohibitions is to remove those hurdles, broadly, and to not have that barrier in place for certain people. So, if a candidate has relevant experience, and if they have that professional certification, not distinguishing between where that experience came from, it's still something that I would caution raising.”
And if you're looking only at Canadian experience, “you might discourage candidates who would be wonderfully suited to the job, but whose experience is international,” says Cameron.
This requirement is reflective of the fact that much of Canada's workforce is made up of immigrants, says Kwong.
“But what that means for employers is that they'll need to focus on how they're going to evaluate and compare that non-Canadian experience,” he says.
And it’s important to keep in mind that this isn't a prohibition on relevant experience.
“To the extent that certain industries or sectors or positions might be uniquely Canadian, I wouldn't be surprised if in those forthcoming regulations, that there might be carveouts included,” he says.
“To the extent that local experience or things like that might be relevant to a job, I think that there may be some room to maneuver there, depending on what those regulations might say.”
Risks of discrimination in hiring
But employers should also remember that a Canadian experience requirement in the past has been a considered a proxy ground for discrimination on the basis of place of origin, says Cameron.
“It's something that employers should always have been cautious about anyway... even if it was permitted in the interview stage, due to the limits on how, say, Bill 149 gets rolled out, it's not a risk-free question. And it really does defeat the purpose of the legislation where you're trying to find the best candidates and to remove those hurdles for recruitment.”
Many would say that this is a long time coming or was expected as a best practice for employers to begin with, says Kwong, “because of the risk of those sorts of claims anyways. So in a way, this is kind of a codification of those best practices.”
Pay transparency in spotlight
Another important element in the Working for Workers Act, 2023 that concerns hiring is pay transparency. With the new legislation, Ontario employers will have to disclose the “range of expected compensation” of a position in the job ad, though certain conditions, limitations, restrictions or requirements “may be prescribed.”
It’s not yet clear whether the requirements will apply to certain roles or certain compensation ranges, or whether, for example, it's only for jobs that are salaries under $100,000, says Cameron.
“The range may be commensurate with experience, the range may be commensurate with market conditions at the time, but I think the real question that we see going forward is how broad that range is allowed to be.”
While too broad a range would be considered inconsistent with the purpose or intent of the legislation, it’s also understandable that employers don’t necessarily want to reveal the exact salary paid for a position, she says, “because there usually is some exception, or some range, even if employers have structured their work as being part of a band or part of a salary grid.
“I think a lot of employers are probably going to be looking at their existing salary grids and saying, ‘Okay, where on the grid are we posting for this position?’”
At this point, it’s best to be somewhat proactive and to think about your strategy, especially if you're a national based employer, she says.
“If you're part of a national strategy, or if you're looking for remote workers across the country, there are provinces that have these requirements in place already and that will be the first piece to think about on that front.”
In Canada, applicable employment laws are determined by where the employee is located, not where the employer is located, says Cameron.
“So once this legislation comes into force in Ontario, the pay transparency requirement would apply to job postings for Ontario positions, or positions that are available to workers who are based in Ontario.”
The second piece of this is the labour market, she says.
“If you're competing for candidates in a job market where somebody has published the expected salary range, and yours is still a secret, you may not get the same uptick in interest among potential candidates as well who want this information, who want to essentially know what it is that they might be getting into.”
But it’s also important for employers to keep in mind the “natural consequence” of having to post compensation ranges in job ads, says Kwong.
“They'll probably need to review the competitiveness of the compensation that's provided — not just to fresh, external hires, but also to their current employees,” he says.
“This is probably serves as a reminder for employers to turn their minds towards potential pay equity considerations that might flow from the disclosure of the salary ranges.”
At this point, the Ontario government has not yet announced when these change will come into force, but that gives employers “some leeway in terms of preparing for actually implementing all of these obligations,” he says.
