Pay Transparency Legislation Introduced

On March 6, 2018, the Ontario government tabled Bill 203, Pay Transparency Act, 2018 to close the wage gap between women and men in the province by imposing significant obligations and restrictions on employers relating to the disclosure of information about the compensation of employees and prospective employees. The government says it will spend up to $50 million over the next three years on the initiative.

If enacted, Bill 203 would come into force on January 1, 2019, and:

• prohibit employers from seeking the compensation history regarding a potential employee. Nothing prohibits an employer from seeking information about the ranges of compensation or aggregate compensation provided for positions comparable to the position for which the applicant is applying (although that person may voluntarily and without prompting make such a disclosure). Where an applicant has made a disclosure of compensation history information or the employer has obtained pay range or aggregate compensation information, nothing prohibits the employer from considering or relying on such information in determining compensation for the applicant. These requirements do not apply to compensation history information that is publicly available;
• require job postings to include information about expected compensation or the range of expected compensation for the position;
• require prescribed employers to prepare a pay transparency report that complies with the regulations, is for a prescribed reporting period and contains prescribed information relating to:

• the employer
• the composition of the workforce
• the differences in workplace compensation regarding gender and other characteristics;

• require employers to submit the pay transparency report to the Minister and post it online or in a conspicuous location in the workplace; and
• permit the Minister to publish the pay transparency report on the Internet or other platforms.

Anti-reprisal measures

Bill 203 prohibits anti-reprisal measures taken by the employer regarding inquiries or disclosures made by employees under the legislation. Moreover, no employer or person acting on behalf of an employer will intimidate, dismiss or otherwise penalize an employee or threaten to do so because the employee has:

• made inquiries to the employer about the employee’s compensation;
• disclosed the employee’s compensation to another employee;
• made inquiries about a pay transparency report made under section 6, or about information contained in such a report;
• given information about the employer’s compliance or non-compliance with the requirements of this Act or the regulations to the Ministry; or
• asked the employer to comply with this Act or the regulations.

Bill 203 allows an affected employee who believes reprisal has taken place to have the matter dealt with by arbitration or through filing a complaint with the Ontario Labour Relations Board.

Where an employee complains that an employer or person acting on behalf of an employer has contravened the Act by taking reprisal measures against them, the employee may either,

• have the matter dealt with by final and binding settlement by arbitration under a collective agreement, where one is in place; or
• file a complaint with the Board, in which case any rules governing the practice and procedure of the Board apply, with all necessary modifications, to the complaint.

The onus is on the employer to prove that it did not take reprisal measures against the employee.

Enforcement measures

The Bill also allows the government to appoint compliance officers with the requisite powers and duties, among other things, to conduct compliance audits and investigations in the course of those audits. For example, a compliance officer may, without a warrant, conduct a compliance audit of an employer and, for that purpose, may enter and inspect any place in order to investigate a possible contravention of this Act or to perform an inspection to ensure that this Act is being complied with.

A compliance officer conducting an investigation or inspection as part of a compliance audit may:

• examine a record or other thing that the officer thinks may be relevant to the investigation or inspection;
• require the production of a record or other thing that the officer thinks may be relevant to the investigation or inspection;
• remove for review and copying a record or other thing that the officer thinks may be relevant to the investigation or inspection;
• in order to produce a record in readable form, use data storage, information processing or retrieval devices or systems that are normally used in carrying on business in the place; and
• question any person on matters the officer thinks may be relevant to the investigation or inspection.

If a compliance officer believes that a person has contravened a provision of this Act or the regulations, the officer may issue a notice to the person setting out the officer’s belief and specifying the amount of the penalty for the contravention. The Minister may also publish or otherwise make available to the general public the name of the person, a description of the deemed contravention, the date of the deemed contravention and the penalty for the deemed contravention.

Penalties will be set in regulations once filed.

Employers may ask the board to review within 30 days after the date of service of the notice.

Some important definitions

“Employee” has the same meaning as in the Employment Standards Act.

“Employer” has the same meaning as in the Employment Standards Act.

“Applicant” means an individual who applies for employment with an employer, other than an individual who is an employee of the employer at the time of applying.

“Compensation” means all payments and benefits paid or provided to or for the benefit of a person who performs functions that entitle the person to be paid a fixed or ascertainable amount.

“Publicly advertised job posting” means an external job posting for a specific job that an employer advertises to the general public in any manner, but for greater certainty does not include recruitment campaigns, general help wanted signs or positions that are only advertised to existing employees of the employer.

Transition period

The pay transparency measures will begin with the Ontario public service before applying to employers in the private sector. Regulation will define what a prescribed employer is and this will include the number of employees in the employer’s employ in a prescribed period.

This proposed law will eventually apply to employers with 250 or more employees. Small- to medium-size employers are for now exempted from the application to publish the salary on each job posting as well as report pay differentials to the government.

Worker coalitions and advocacy groups are calling for Bill 203 to be beefed up. In a CBC News article, Fay Faraday of the Equal Pay Coalition, says “This law must apply to smaller companies with as little as ten employees, since 98% of Ontario employers have 49 employees or less. It is up to our decent work movement to build pressure and momentum so that we can improve the lives of women workers, who are making 31% to 57% less than men depending on whether they are immigrant, racialized, disabled or Indigenous women.”

The Ontario Ministry of Labour Minister of Labour Kevin Flynn on Twitter indicated that there was push back on the passing of the Bill. He stated that the Progressive Conservative Party of Ontario has filed a delay motion on the Act. Minister of Labour Kevin Flynn further stated that the delay “unacceptable.”