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Employment & Labour

Pay Transparency Act delayed indefinitely

By Laura Williams

On the heels of the major set of employment law changes introduced by Bill 47, the Ontario government recently passed Bill 57, the Restoring Trust, Transparency and Accountability Act, 2018, which stalls implementation of the Pay Transparency Act (the PTA) on an indefinite basis, among various other legislative changes.

The PTA was passed into law by Ontario’s former Liberal government in May 2018 and was slated to come into force on Jan. 1, 2019. However, Bill 57 has amended the PTA to stipulate that it will come into force on a date proclaimed by the Lieutenant Governor. It is currently unclear when or even whether it will come into force.

If Bill 57 had not been passed, the following new obligations would have begun to come into effect beginning Jan. 1, 2019, among others:

  • a prohibition on employers intimidating, dismissing or otherwise penalizing employees for disclosing their compensation rates to colleagues or inquiring with their employers about compensation;
  • a requirement for employers to include salary rates or ranges in public job postings;
  • a prohibition on employers asking job applicants about their compensation from previous employment; and
  • a requirement for larger employers to track and report on compensation gaps based on gender in pay transparency reports, and to publicly post the reports.

The PTA was, like the much-discussed Bill 148, quickly passed by the former Liberal government in its last months in office. It was widely anticipated that the new Conservative government may not implement the PTA, particularly after it introduced Bill 47, the Making Ontario Open for Business Act, 2018, which was passed in November 2018 and repealed many of Bill 148’s legislative amendments. The delay of the PTA, therefore, does not come as a surprise but will be welcome to employers after the flood of new legal obligations that have been imposed on employers by legislative amendments in the past few years.

Due to the PTA’s postponement, employers will continue to be legally permitted to determine compensation rates based in part on candidate experience, qualifications and expectations, rather than having to determine the compensation range before posting the job. Employers will also be spared the administrative burden of creating pay transparency reports. Finally, employers will again be free to limit employees’ ability to disclose compensation information.

Like the PTA, the equal pay provisions of the Employment Standards Act, 2000 (the ESA) introduced by Bill 148 contain a prohibition on reprisal for disclosing compensation rates. However, Bill 47 repealed those equal pay provisions of the ESA effective Jan. 1, 2019. As such, due to the combined delay of the PTA and passage of Bill 47, employees will no longer be protected from reprisal (such as intimidation or dismissal) for discussing, disclosing or inquiring about their compensation rates. Employers will therefore again be legally permitted to implement policies limiting disclosure of compensation rates, should they deem it appropriate.

As always, we will update you with any major developments, such as if the government proclaims a date that the PTA will come into force and/or announces any amendments to the PTA before doing so.

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