Government introduces Bill 3, The Pay Transparency Act, 2018
On Mar. 20, 2018, the Ontario government introduced Bill 3, the Pay Transparency Act, 2018, which establishes requirements relating to the disclosure of information about the compensation of employees and prospective employees. Bill 3 was previously introduced on Mar. 6, 2018, as Bill 203, but it was lost along with all other bills pending before the legislature when, on Mar. 15, 2018, the Lieutenant Governor of Ontario, on the Premier’s advice, prorogued the legislature. Bill 3 was then reintroduced when the legislative session resumed this week.
If passed, Bill 3’s requirements would begin to come into effect on Jan. 1, 2019 and would, among other things:
- Prohibit employers from seeking compensation history information about an applicant for a position;
- Require employers to include information about the expected compensation or range of compensation for the position in any publicly advertised job posting;
- Require certain employers (expected to ultimately include all public sector employers and all private sector employers with at least 250 employees) to prepare pay transparency reports that include information about:
- the employer;
- the employer’s workforce composition; and
- differences in employees’ compensation with respect to gender and other prescribed characteristics (to be prescribed by regulation in the event Bill 3 becomes law);
- Prohibit employers from directly or indirectly intimidating, dismissing or otherwise penalizing employees for:
- making inquiries about their compensation;
- disclosing their compensation to another employee;
- making inquiries about a pay transparency report;
- giving information about the employer’s compliance or non-compliance with the Pay Transparency Act, 2018 (the Act) or its regulations; or
- asking the employer to comply with the Act or the regulations;
- Address the powers and duties of compliance officers who may be appointed to enforce the Act, such as conducting compliance audits and issuing notices of contravention; and
- Identify the procedure for disputing a notice of contravention before the Ontario Labour Relations Board and enforcing the notice in a court.
The government’s stated goal in introducing Bill 3 is to address biases in hiring and in pay-setting and thereby promote fairer compensation practices in the private and public sectors. The government believes that the requirements introduced by Bill 3 would help address the gender wage gap and would ensure that all Ontarians, including women and other disadvantaged groups in the workplace, have equal opportunity to get hired, negotiate fair wages, and progress in their career based on merit.
If Bill 3 is passed, employers will have to take steps to change their hiring practices to ensure compliance with the new legislation, and larger and public sector employers to which the pay transparency reporting obligations would apply would be put to the task of creating and posting those reports. Given that employees would become aware of compensation trends in their workplaces based on the content of the pay transparency reports, those larger and public sector employers would likely face an increase in demands for pay increases by their employees. Those employers that are not in full compliance with the existing Pay Equity Act may also face litigation related to that legislation after posting their pay transparency report.
We will monitor the bill’s progress and will post updates regarding major developments involving Bill 3 as it progresses through the legislature.