Canada: Closing The Gender Pay Gap: Ontario's Proposed Pay Transparency Act, 2018

On March 6, 2018, the Ontario government introduced Bill 203, Pay Transparency Act, 2018 ("Bill 203"). Bill 203 creates certain requirements for employers regarding compensation information and its disclosure to employees and potential employees. If passed, the legislation will come into force on January 1, 2019.1

It is worth noting that Bill 203 applies to private and public sector employers, and imposes wider obligations than does Ontario's Public Sector Salary Disclosure Act, 1996, which requires public sector employers to make public the names, positions, salaries and total taxable benefits of employees paid $100,000 or more in the previous calendar year.

Once in effect, Bill 203 will prohibit employers from seeking the compensation history regarding an applicant for a position, whether done by inquiring with the applicant personally or through an agent. Notably, Bill 203 does not prohibit an applicant from voluntarily disclosing this information. Where an applicant has disclosed the information regarding his or her compensation history, the employer may consider or rely on this information in determining the compensation for the applicant. "Compensation" is defined as 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.

Nonetheless, Bill 203 will allow employers to seek out information regarding the ranges of compensation or aggregate compensation provided for positions comparable to the position for which the applicant is applying. In addition, Bill 203 will require that job postings include information about expected compensation or the range of expected compensation for the position.

Transparency Reports

One of the most significant changes arising from Bill 203 is the requirement for employers to prepare a pay transparency report that complies with the regulations and contains information relating to:

  • the employer;
  • the composition of the workforce; and
  • the differences in workplace compensation with respect to gender and other characteristics.

In addition, employers will be required to submit the pay transparency report to the Minister and post it online or in at least one conspicuous location in the workplace. The Ministry may also publish, or otherwise make available to the public the pay transparency report.

No Reprisal

Bill 203 will also prohibit an employer from intimidating, dismissing, or otherwise penalizing an employee or threatening to do so because the employee has:

  1. made inquiries to the employer about the employee's compensation;
  2. disclosed the employee's compensation to another employee;
  3. made inquiries about a pay transparency report, or about information contained in such a report;
  4. given information about the employer's compliance or non-compliance with the requirements of the Act or the regulations to the Ministry; or
  5. asked the employer to comply with this Act or the regulations.

Where there is an employee complaint regarding an alleged contravention of the anti-reprisal provisions of Bill 203, the Bill will allow the matter to be dealt with by arbitration where a collective agreement is in place, or through the filing of a complaint with the Ontario Labour Relations Board (the "Board"). Where, on inquiry, the Board determines that an employee has been discharged or otherwise disciplined by an employer for cause and the contract of employment or the collective agreement, as the case may be, does not contain a specific penalty for the infraction, the Board may substitute such other penalty for the discharge or discipline as seems just and reasonable in all the circumstances.

Compliance Audits

Under Bill 203, compliance officers may conduct compliance audits and investigations, which may include entering and inspecting any place, document, or questioning any person, on matters the officer views as may be relevant to the investigation or inspection. Bill 203 also provides for penalties that will be applicable to any contravention of the Act. The nature of the penalties is expected to be set out in the regulations to the Act.

The European Experience

The European Union has been attempting to address the issue of reducing the gender pay gap in Europe for a number of years. In March 2014, the European Commission introduced Recommendation 2014/124/EU (the "Recommendation"), which suggests that every member state ought to adopt (or adapt) at least one out of four measures ensuring greater transparency of pay:

  1. the individual right to request pay information;
  2. compulsory company level gender pay reports for companies with more than 50 employees;
  3. more analytical gender pay audits for larger companies; and
  4. to 'encourage' social partners to take the matter into account in their collective bargaining.

A number of northern European countries, and the United Kingdom and Germany, have introduced pay transparency legislation in response to the Recommendation. In the United Kingdom, The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, came into force on April 6, 2017. The Regulations, which are expected to affect more than 15 million people, require that all companies in Great Britain with more than 250 employees report their gender pay gap to the Government Equalities Office ("GEO"). All public bodies are due to report by March 30, 2018 and all companies are due to report by April 4, 2018. Companies are also required to publish details of the proportion of men and women in the company who receive bonuses, along with the breakdown of men and women in different pay quartiles on their own website and on the website of the GEO. More than 1,000 employers have already reported these figures. Notably, under the Equality Act, it is up to the individual companies and public bodies to calculate their own gender pay gaps, and a number of companies have restated their figures to date, highlighting the importance of timing with respect to data collection and reporting.

Criticisms of the U.K. legislation include the fact that there are currently no plans to levy a penalty against companies that have a wide gender pay gap. However, the British government has stated that it will publish sector-specific league tables, highlighting companies that have failed to address pay differences between men and women. Notably, when the BBC published its 2017 figures, in January 2018 one of its key journalists, Carrie Gracie, resigned due to inequality of pay, highlighting the potential impact of public disclosure even in the absence of specific penalties.

In a similar vein, Germany recently introduced The Transparency of Remuneration Act which came into force in July 2017, and stipulates that men and women who do the same jobs must be paid the same amount. The Act creates a right for individual employees of employers with at least 200 employees to be informed about the remuneration of other employees within one comparison group. If an individual employee finds indications that the remuneration of at least six other colleagues of the opposite sex for the same or similar performance is higher, he or she can request to have his or her own salary compared to the average income of the named colleagues. Where the employer fails to provide the requested information within three months, the presumption of unequal treatment will arise, unless the employer puts forward a reasonable justification for the disparity in pay.

Another feature of the Act is the requirement that employers with more than 500 employees undertake operational audit procedures. The reports of these audits must include the measures that are taken to promote equality and produce equal payment, along with the number of full and part-time employees.

Significance

Based on the evolution of pay transparency in Europe, it is perhaps not surprising that the Ontario government has undertaken to put legislation with similar goals in place. Notably, Bill 203 goes further than does the European legislation, at least in part because it provides for penalties in the event of contravention. If enacted, Bill 203 will represent an expansion of employer obligations during hiring and compensation processes, and will likely result in culture shifts in some Ontario workplaces. Considering the European experience with pay transparency legislation, which in some cases has publicly highlighted companies who have failed to address pay equity, it is to be expected that pressure to address pay gaps will also come from companies' own employees. While monitoring the progress of Bill 203, employers should consider performing internal pay equity audits, consulting with legal advisors with respect to strategic considerations relating to audits and reporting, and ensuring that hiring and compensation policies are being applied objectively and in a non-discriminatory manner.

Footnote

1. On March 15, 2018, the Ontario legislature was prorogued and an announcement made that the new session of the legislature would open with a Throne Speech on March 19, 2018. As a result of the prorogation, any bills which were not passed died on the order paper, including Bill 203, the Pay Transparency Act, 2018. However, it is expected that Bill 203 will be reintroduced in substantially the same form as that discussed in this article following the reopening of the legislature.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions