Closing the gender pay gap through the Pay Transparency Act ​

If enacted, this act is expected to come into force on Jan. 1, 2019

Closing the gender pay gap through the Pay Transparency Act  ​
Stuart Rudner

By Stuart Rudner and Nadia Zaman

You have probably seen in the news that Ontario Minister of Labour Kevin Flynn introduced Bill 203, the Pay Transparency Act, 2018, on March 6. Although the bill has only passed first reading and is not yet “law,” if passed, it would attempt to reduce the gender pay gap by introducing various measures such as prohibiting employers, during the interview process, from asking candidates about their compensation history and providing expected compensation in publicly advertised job postings. If enacted, this act is expected to come into force on Jan. 1, 2019.

The proposed changes include:

Compensation history - All employers would be prohibited from seeking compensation history information about an applicant by any means, whether personally or through an agent. However, certain exceptions would allow employers to learn such information from other sources. For example, employers would still be able to access information that is publicly available. There would also be no prohibition against prospective employees voluntarily disclosing such information without any prompting on the employer’s part. In other words, while employers would be prohibited from asking candidates about their compensation history, the act would still allow employers to learn that information and address their organizational needs accordingly.

Job postings - All employers, in their publicly advertised job postings, would be required to include the expected compensation or a range of expected compensation for the position.

Pay transparency reports - All prescribed employers (initially those with more than 500 employees, and in the future those with more than 250 employees) would be required to prepare pay transparency reports. The report must include information such as the employer’s workforce composition and differences in compensation based on gender and other prescribed characteristics. The pay transparency report must be submitted to the ministry and posted online or in a conspicuous place in the workplace.  

Reprisals - All employers would be prohibited from engaging in reprisals (i.e. intimidate, dismiss, penalize or threaten to do so) against employees who have:

    • made inquiries to the employer about compensation
    • disclosed compensation to another employee
    • made inquiries about a pay transparency report
    • provided information about the employer’s compliance or non-compliance with the act or regulations to the ministry
    • asked the employer to comply with the act or regulations.

Enforcement - The act includes measures to ensure effective implementation, such as by allowing compliance officers to conduct audits of the workplace and by imposing monetary penalties on employers who violate the act.

While it is still in its infancy, this act is a positive step. The status quo, with systemic differences in pay based on gender, is no longer acceptable. In addition, the act strives to achieve a balance between the rights of employees and the obligations of employers. However, it is important for employers to also be mindful of legislation that is currently in place to address similar concerns, including the following:

  • The Equal Pay for Equal Work requirement under the Ontario Employment Standards Act, 2000 states that all employees, whether male or female, who perform substantially the same job (i.e. work that is substantially the same, requiring the same skill, effort and responsibility and performed under similar working conditions in the same establishment), must be paid equally. As of April 1, 2018, the Equal Pay for Equal Work requirement will also apply regardless of an individual’s employment status. The only exceptions to this requirement are seniority, merit, quality or quantity of work produced, or any other factor that is not related to the sex of the employee or their employment status.
  • The Pay Equity Act in Ontario has measures to ensure that female workers receive equitable pay as male workers for performing different jobs of equal value.
  • The Ontario Human Rights Code provides that job advertisements must not include any statements, qualifications or references that relate either directly or indirectly to any of the prohibited grounds of discrimination, such as sex or gender. Otherwise, the right to equal treatment in employment is infringed. Some requirements, although discriminatory, may not violate the code, if the employer can show that it is a reasonable and bona fide occupational requirement (e.g. a health club’s requirement that staff in a men’s locker room must be men).

If your hiring processes are not in compliance with the existing legislation, or if you are not sure whether they are compliant, it is best to seek legal advice and to implement changes as soon as possible.

Nadia Zaman is an associate at Rudner Law in Toronto.

Latest stories