Pay transparency – show me the money!

The newest installment of pay transparency became law in Ontario on Jan. 1 this year and, insofar as government meddling in business goes, it’s a biggie. Most government interventions into the corporate world happen under the radar and usually take the form of quiet updates to the labour code. But pay transparency has garnered a lot of mainstream attention and, based on where that attention surfaced (business news, main news and, personal blogs), companies would be well served to take heed lest they be the next target of a corporate activist’s public tirade on Glassdoor.

Pay transparency is one element of a series of policy changes introduced in the Working for Workers Four and Five Acts, made effective in Ontario on Jan. 1, 2026. British Colombia is ahead of the curve and introduced their pay transparency rules in 2025 and their journey provides us with many valuable lessons.

What is pay transparency?

In general terms, pay transparency discloses information about wages, salary ranges, and compensation structures. The goal is to reduce information vagueness between employers and employees, empower workers to negotiate fairly, and help reveal systemic pay gaps—particularly gender-based gaps. Pay transparency focuses on job postings, compensation disclosure, and pay gap reporting. The big changes to note are:

Compensation: Employers must list the compensation range for the advertised role in the posting. The range cannot exceed $50,000. The sole exception is whether the expected compensation is $200,000 or more.

Canadian experience requirement ban: Employers are prohibited from requiring previous Canadian work-experience in job postings as a requirement.

Job type: Postings must indicate if they are for a new role or an existing role.

Artificial intelligence: Employers must disclose if they are using artificial intelligence in the recruitment process.

Salary history: Employers are prohibited from asking about a candidate’s prior compensation history (pay history).

Interview responses within 45 days: Employers with 25 or more employees must advise interviewed candidates of the outcome of their application within 45 days of their last interview.

The public support for these changes has been near unanimous online and in the news, and why not — at the heart of this initiative is a movement to bring dignity and respect to job-seekers who have had to navigate a mostly lawless hiring process for decades that put 100 per cent of the power dynamic in the hands of employers.

Almost everyone we have spoken to on this topic (HR and non-HR) agrees we are moving in the right direction but, as with everything, the devil is in the details. While on the surface these measures may seem noble, there is skepticism on whether they will drive the grass-roots changes its authors are hoping for. Let’s look at just two of these changes, since looking at all would require more print than this article is being allotted.

What is your current salary?

If interviewing skills were taught in school, one of the first sections would undoubtedly include “making the candidate reveal what they are earning.” Indeed, in some HR circles it can be seen as a weakness if a recruiter cannot extract this information from a candidate.

From a company’s standpoint, the reason this question is asked is to reveal a few things:

• The market value for your role
• The level of competency you bring to the table
• How much your current company values you
• What they should offer you

But there is only one reason most people think the question is asked: They want to hire you for the lowest salary they can.

There is likely a bit of all-of-the-above involved when it comes to this part of the interview process, but by making the question of salary history illegal, it suddenly puts the employer on the back foot and will force them to truly consider market value for professions and allow for much more upward salary mobility for job-changers than in the past.

For companies, the key to managing this change from a high-level standpoint will be to ensure they maintain a good foothold on the external market and what it is paying for key roles. From an operational standpoint, and to avoid being the target of a Glassdoor warrior, companies must ensure their hiring managers are well-educated on these changes and continue that education throughout the year by embedding it into the onboarding of new employees.    

Do you have Canadian work experience?

We have all seen it before: a newcomer to Canada is over-qualified for the job they are performing because their international credentials are not being recognized by the local market. This is a real issue for many western countries and has been an impediment for Canada’s overall immigration-integration programs for decades — which is why the new ban on requiring Canadian experience is a great first step in tackling this issue and, quite frankly, about time. However, this legislation alone won’t be enough, as it will require a mindset change on the part of companies to fully adopt these principles behind closed doors. You can window-dress this issue all you want, but if the core reasons why hiring managers don’t recognize foreign experience persist, nothing will change.

It would be lazy and incorrect to say that Canadian employers don’t recognize foreign experience because they are inherently racist — the fact that the Canadian workforce is amongst the most diverse across western markets should immediately put that to rest. The more accurate assertion to make is that Canadian employers are risk-averse when it comes to business, and that also applies to hiring. To know that Canadian business is risk-averse, one doesn’t need to look any further than our banking system, which is notoriously conservative but benefits from that conservatism by being one of the most stable in the world.

When it comes to hiring, companies do everything they can to avoid making bad decisions and, if they do not have confidence in the legitimacy of a candidate’s foreign experience, it is automatically seen as a risk to their overall candidacy. The US workforce seems to do a better job of integrating foreign experience for a number of reasons — the main one being scarcity of talent in their market — leaving employers no other choice but to hire the internationally-trained candidate, which in turn has helped to break down preconceived barriers. Once they see these folks in action, they become converts. Hopefully the ban on requiring Canadian experience will do the same for the Ontario market and slowly shift some deep-seated notions that continue to persist.

BC’s pay transparency act: How’s it going so far?

As mentioned at the onset, British Columbia rolled out their pay transparency legislation over a year ago and their experience provides us with some valuable insights to consider.

Increased disclosure: By the end of 2025, 85 per cent of job postings in BC included salary information — far higher than the Canadian average elsewhere (about 52 per cent) — suggesting stronger access to pay data for job seekers.

Reduction in pay gaps: Preliminary government reports suggest modest improvements in the gender pay gap in some sectors (like agriculture and wholesale trade), though gaps remain large and multi-dimensional.

Compliance challenges: The province received hundreds of reports from employers failing to disclose pay ranges initially; many added this information only after outreach from authorities. This underscores the importance of education and enforcement support.

Ontario’s new pay transparency legislation is being applauded across the province as it introduces fairness and dignity to the job search process. And it couldn’t have come at a better time with unemployment figures slowly rising. At the same time, we shouldn’t recreate the wheel, losing sight of the path BC has gone down in rolling out their own legislation. Let’s hope that these new rules will result in the positive change we are all hoping for, by really changing deep-seated attitudes. Because until that happens, nothing much will really change.

Katie Martel is the Regional HR Director, WCA at Hatch Canada. Thomas Byun is the Global Director, Talent Acquisition at Hatch.