Addressing the Gender Wage Gap: The Pay Transparency Act

According to the Ontario government, women in this province earn around 30% less than men, and this has gone unchanged for the last decade.

In May of this year, the Pay Transparency Act, 2018 (Bill 3) received Royal Assent and will come into force on January 1, 2019.

When the Act was first introduced, premier at the time Kathleen Wynne said: “We’ve got to pay attention to the reality of women’s lives. They still are not paid the same as men are paid. They still, at a very young age, have their horizons limited. We have got to stop doing that to them.”

Objectives of the Act

The Pay Transparency Act aims to increase transparency in hiring processes and give women more information when negotiating compensation.

Ontario is the first province in Canada to pass legislation of this kind. It is part of the province’s Then Now Next: Ontario’s Strategy for Women’s Economic Empowerment, which was introduced in March 2018 and aims to create fairness and opportunity for women. The new act does not amend existing legislation, such as the Pay Equity Act.

The Pay Transparency Act outlines its purposes as follows:

1. To promote gender equality and equal opportunity in employment and in the workplace through increased transparency of pay and workforce composition;
2. To increase disclosure of inequities related to employment and compensation that women and other Ontarians may experience in the workplace, to encourage the removal of such inequities;
3. To promote, amongst employers, the elimination of gender and other biases in hiring, promotion, employment status and pay practices;
4. To support open dialogue and workplace consultation between employers and employees; and
5. To support economic growth through the advancement of equity in employment and in the workplace for women and other groups.

What does it mean for employers?

Employers should definitely turn their attention to this piece of legislation. As of January next year, employers will be, among other things:

• Required to include a salary rate or range in all publicly advertised job postings;
• Prohibited from asking a job candidate about their past compensation;
• Prohibited from enacting reprisals against employees who discuss or disclose compensation to another employee; and
• Required to track and report compensation gaps based on gender and other diversity characteristics.

The pay transparency measures will apply first to the Ontario Public Service, then to employers with more than 250 employees in May 2020, and to those with more than 100 employees in May 2021.

The rules require employers to submit pay transparency reports to the Ministry of Labour, with information about their workforce composition and the differences in compensation with respect to gender and other characteristics. The reports will also be made publicly available.

These are important changes to workplaces in Ontario, and employers need to be aware of how they will be affected and what they need to do to comply. Employers should review and update their workplace policies, and take steps towards correcting any compensation gaps based on gender.

If you have any questions or concerns about these changes, contact our Employment Law Group.