How will the Pay Transparency Act impact your organization?

Elements of this Act will impact all Ontario employers, so it’s essential that HR leaders sit up and take note

How will the Pay Transparency Act impact your organization?

The Pay Transparency Act has not yet been enforced in Ontario – however, it will be on Jan 1, 2019. And whilst that may seem far away in the minds of some employers, it’s important to realize that elements of this Act will impact all Ontario employers, so it’s essential that HR leaders sit up and take note.

We spoke to Jennifer Hodgins, senior associate at Norton Rose Fulbright Canada, and speaker at our upcoming Employment Law Masterclass, who went into more detail.

“The Pay Transparency Act has the propensity to impact all Ontario employers, as it will relay a prohibition on asking job candidates about their compensation history, and also mandate that publicly advertised job postings include a salary rate or range,” she told HRD Canada.

“In the past, an employer could ask a candidate what their pay rate was at a previous job – however, under the Act, as of next year, that will be illegal. The purpose behind this is to deal with the prevalent gender wage gap. It’s believed that addressing prior compensation or having employees un-linked to their past salary will help combat the problem, as female candidates historically have lower wages than their male counterparts.”

The second aspect of the Act will only affect larger employers, Jennifer told us, and the Ontario public service. It involves actively preparing Pay Transparency Reports, starting with employers with 250 or more employees, who will be required to submit their first pay transparency report no later than May 15, 2020, and followed by employers with 100 or more employees, who will be required to submit their first report by May 15, 2021.

“Details around these reports haven’t been released as of yet,” added Jennifer. “Generally speaking, it will involve revealing compensation rates of your staff base; including rates within the organization as they relate to gender.”

These reports will be made public, meaning there could be a huge potential fallout landing firmly at HR’s doorstep.

“Start looking at the compensation within your organization,” advised Jennifer. “Identify if there’s any issues that the company might want to address. Be proactive with this.”

Essentially, don’t leave it until you’re having to create a report that could be embarrassing and harmful to your brand.

To find out more about the illusive Pay Transparency Act, Jennifer will be hosting a session on the topic at our upcoming Employment Law Summit. Book your place here.

 

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