top of page
  • Writer's pictureAshley Gallant

Explained: Ontario's Pay Transparency Act

Updated: Mar 3




As the Ontario Legislative Assembly prepares for the crucial final vote on the passage of Bill 149: Working for Workers Act (2023) following weeks of intense debate, we find it timely to provide a primer on the essential details of this significant amendment to the Employment Standards Act. For scaling tech companies and their employees, we hope to offer insights into how this legislation might affect you. *Spoiler alert - We think this is a positive move towards transparency and equity in our workplaces, we think you'll agree.

Background


In November 2023, the Ontario government proposed significant updates to its labour laws under Bill 149 - the "Working for Workers Four Act", which seeks to amend the Employment Standards Act (ESA). Key proposals include mandatory disclosure of pay ranges in job postings, the disclosure of AI use in the hiring process, and a ban on unpaid trial shifts in the restaurant and hospitality sectors. 


This move aims to foster greater openness about compensation amidst a global trend towards workplace equity. The proposed law targets employers across Ontario, except those in federally regulated industries like banks and telecommunications, but we see that the move toward pay transparency reflects a broader shift. Compensation openness as a tool for equity.


Proposed Laws You Should Know About


Pay Transparency


The proposed Bill 149 mandates that employers disclose the pay range in all publicly advertised job postings. This includes job ads on platforms like LinkedIn or Indeed but excludes generic signs or internal postings. The Labour Minister has suggested this will only apply to positions paying below $100,000, signalling a targeted approach to enhancing job posting transparency - and a less immediate impact on the tech industry where many roles would be above the threshold. We expect that future iterations of the law may would expand thresholds for disclosure.


Canadian Work Experience


Bill 149 also aims to prevent employers in Ontario from specifying Canadian work experience requirements in job postings. We think this is great, as we know that the talents of immigrants are both needed in our economy and often undervalued. Companies will need to work a little harder to assess the relevance of international training and experience, but removing a barrier facing immigrants looking for Canadian employment will be a boost to individuals, companies and the economy. The Government intends to promote inclusivity and eliminate potential discrimination, aligning with longstanding recommendations from the Ontario Human Rights Commission.


Use of AI


Bill 149 introduces amendments requiring employers who use AI for screening, assessing, or selecting applicants in publicly available job postings to disclose this usage. The Government aims to prevent worker exclusion due to technological biases and protect privacy rights. We appreciate the intention in identifying that AI may come with a side of bias and insecurity, but with AI making its way rapidly into every business application, we're not sure that this will have the desired effect.


Paid Trial Periods


Bill 149 scrutinizes trial periods, expanding the ESA's "employee" definition to include "trial periods," ensuring compensation for such work. While this move targets unpaid trial shifts in industries outside of tech, we're interested to see how this will impact the on-site working interviews and take-home interview tasks that are common in the tech industry.


Retention of Job Postings


Employers must keep copies of every job posting they advertise to the public, along with any related application forms, for three years after making the posting inaccessible to the public. So a reminder to keep good records.


Coming soon? Sickness benefits and limited NDAs.


While not included in Bill 149, the Ontario Government has revealed plans to initiate consultations on two additional matters. First, they'll explore the introduction of a job-protected leave aligning with federal Employment Insurance sickness benefits, set at 26 weeks. Additionally, the government intends to hold consultations to examine limitations on the use of non-disclosure agreements in resolving cases related to workplace sexual harassment, misconduct, or violence. Without knowing all of the details, these both sounds like positive moves.


Penalties for Violation


If passed, Bill 149 will become an amendment to the existing Employment Standards Act in Ontario. Companies violating the Act could be subject to fines of $100,000 for first-time offences, $250,000 for second offences, and $500,000 for subsequent offences. Yikes! Certainly worth paying attention and getting ducks into rows.


Current Status & Next Steps


Bill 149 has just passed through a third and final reading and debate in the Legislative Assembly of Ontario (Before a bill can become a law, it must first go through several stages. These stages give MPPs a chance to study the bill and give their suggestions on how the bill can be improved before it becomes law). 


A heavily debated issue during the reading was the need for stronger provisions to remove barriers for newcomers and foreign-trained individuals during the licensing process. This aspect of Bill 149 may include measures aimed at streamlining the licensing process, facilitating the recognition of foreign credentials, and reducing barriers that prevent skilled immigrants from fully utilizing their expertise in the Ontario workforce. We love this move and are excited to get foreign trained workers into their professions and out from behind the wheels of an Uber.


Given the positive discussions and evident support voiced during the debate, prospects for the passage of Bill 149 into legislation seem promising. The outcome will be determined in the following weeks following a conclusive vote in the Legislative Assembly. 


A Closer Look


The Ontario government's labour law updates, including Bill 149's push for pay transparency, have ignited debate on its implications. Despite Canada's slow progress in closing the gender pay gap—ranked 52nd globally by the WEF—there's a noticeable shift towards voluntary salary range disclosure in job postings. This trend is supported by data that shows up to 80% of Canadian managers including salary ranges in postings in efforts to attract and streamline candidate selection.


However, the transition to pay transparency poses challenges, particularly for small businesses competing with larger firms and companies adjusting internal pay scales to match external postings. 

"It requires you to make sure that pay equity is happening, not just as people walk in the door but across the organization," says Kristina McDougall, President and Founder of Artemis Canada. "There are some organizations that I think will see that that's an uncomfortable thing to do." CBC News, Nov 2023

Despite these hurdles, Bill 149 is seen as a step towards narrowing the gender pay gap, enhancing negotiation power for employees, and forcing companies to adopt transparent pay policies or risk being perceived as outdated.


Our advice?


Pay attention as this passing of Bill 149 approaches, and get some expert advice on how to properly implement the required changes in your recruiting process. And in the meantime think through all of your recruiting and compensation tactics and policies through a lens of transparency and equity.



Subscribe to our monthly Artemis Update to receive more of our content directly to your inbox, including Salary Snapshots, industry insights, Leaders on the Move, Humans of Tech, funding news and more.


Artemis Canada is a boutique executive search firm partnering with Canada's fastest growing tech start-ups and scale-ups, helping them identify and hire the leaders who will help them grow and succeed. For more information on our services, please visit our website at https://www.artemiscanada.com/

Comments


bottom of page