Lawyer Maria Constantine warns employers that the greatest challenge of Ontario's new pay transparency rules may come from their own workforce
Employers preparing for Ontario’s new pay transparency rules may be focused on complying with the new requirements but need to also be aware of the impact of the changes on existing teams.
Effective January 1, 2026, employers in Ontario with 25 or more staff will be required to include expected compensation—or a range capped at $50,000—in all publicly advertised job postings.
For employers, one issue will be managing the internal response from employees who suddenly realize they’re earning less than new hires for the same job, says Maria Constantine, partner at Cassels Brock & Blackwell.
“There may be employees who are earning compensation at the lowest end of the range for their role, and they may not learn of that until they see a job posting for their same position that their employer has posted,” she says. “That's, I think, going to be the more challenging aspect for employers.”
This change, introduced under the Working for Workers Four Act and modifies the Employment Standards Act and reflects a growing push for wage transparency across Canadian jurisdictions. Exceptions exist for roles exceeding $200,000 in annual compensation and for jobs performed outside Ontario or posted only to internal candidates.
Preparing for employee reactions to newly visible pay disparities
But as Constantine points out, while the regulatory requirements are clear enough on paper, the broader implications are murkier.
“I think certainly, at the very least, there may be informal grumbling about the perceived unfairness,” she says. “And I think that's something that by January 2026, employers can easily put themselves in a position where they're prepared to avoid those sorts of disputes.”
The solution, Constantine suggests, is a pre-emptive one. Employers should begin conducting internal pay audits now—not after employees start comparing their compensation to newly public salary ranges. This includes evaluating whether existing staff are underpaid relative to advertised ranges, especially if those staff have years of tenure.
“If you don't want to lose those valuable employees who've been with you for however long, there's certainly no downside to saying: ‘in anticipation of our new pay transparency obligations, we've been reviewing our internal pay structures, and as a result of that review, we've decided to give you a raise of X amount,’” she says. “No one is going to be unhappy about that.”
That doesn’t mean those conversations will be easy. Constantine cautions that employers may face difficult questions from long-serving staff: Why has my salary lagged this long? Why did I only learn about it from a job ad?
But avoiding the issue altogether is riskier. While the ESA changes don’t mandate internal salary adjustments based on posted ranges, Constantine points out that other legal avenues—such as pay equity legislation or discrimination claims—may still be on the table.
“I think that's probably more where you would see potential litigation,” she says. “Is this based on sex? Is it based on gender identity? Is it based on age, family status? You could see there being a number of ways that an employee could frame a claim in that respect.”
Navigating grey areas and redefining what fair pay looks like
The rules themselves, Constantine notes, are relatively straightforward. The real difficulty lies in application. Employers must navigate scenarios like variable compensation—where commissions or incentive pay make it tough to pin down expected ranges—or remote roles open to candidates in multiple provinces.
“I think arguably those types of postings would be captured,” she says, referencing guidance from British Columbia, which has already rolled out similar legislation. “We don't have any formal guidance yet from the Ministry of Labor here on that particular issue, but I think the best approach for most employers is going to be err on the side of compliance.”
While there is no current requirement to adjust existing employees’ salaries to match advertised figures, that doesn’t mean employers should ignore the optics or HR fallout. Constantine urges organizations to be strategic and intentional—training HR teams, updating job templates and reviewing pay structures in advance.
Beyond compliance, Constantine recommends that employers use this as an opportunity to clarify their compensation philosophy. Are you aiming to offer top-of-market base salaries, or are you competing on other benefits like flexibility and professional development?
“As we know, especially for younger generations now, compensation is not the be all, end all,” she says. “A lot of employees who are newer to the workforce prioritize things like flexibility and not having to work 60 hours a week over salary alone.”
Ultimately, Constantine views transparency as a net positive. But it’s one that requires forethought, planning, and a willingness to confront internal inequities before they lead to resentment—or worse, attrition.
“There’s value in knowing that you’re being compensated fairly for the work that you’re doing and that your employer is not being cagey about it,” she says. “Although there will be some growing pains, it’s going to be beneficial for both sides—employees and employers.”
