Pay Transparency in Ontario: Bill 149 Changes

Pay Transparency Act in Ontario

On March 21, 2024, the Working for Workers Four Act, 2024 received Royal Assent. That means that the legislation (formerly Bill 149) and its requirements, which include pay transparency in Ontario, are now officially a law. Some provisions are already in force. Others are in force three months following Royal Assent (June 21). Some others come into force on dates yet to be announced.

Getting Ahead of Bill 149’s Requirements

The Ontario government introduced the Working for Workers Four Act, 2024 to better protect, support, and attract workers in the province. The legislation expands on the measures put forth in similarly named acts in 2021, 2022, and 2023. Some pay transparency changes apply to the Employment Standards Act, 2000, but there are several changes to other employment-related legislation, including:

The Workplace Safety and Insurance Act, 1997;
The Fair Access to Regulated Professions and Compulsory Trades Act, 2006; and
The Digital Platform Workers’ Rights Act, 2022, which is not yet in force.

This blogpost covers the changes that apply to the Employment Standards Act, 2000 (ESA). Get started now by downloading our free Bill 149 Requirements Checklist which includes our Pay Transparency Policy. In this guide, we’ll cover the key components of the Ontario Pay Transparency Act, outlining the changes made to Working for Workers Four legislation and how they impact employers and employees in the province.

What are the requirements of the Working for Workers Four Act?

Changes to the ESA arising from Bill 149 include the requirement that employers disclose expected compensation (or the range of expected compensation) in job postings. One new requirement is that employers must now inform applicants whether artificial intelligence (AI) is used during the hiring process. New requirements also ban the use of Canadian work experience as a requirement in job postings or application forms. There are also additional wage protection provisions required for restaurant and hospitality employees.

Bill 149 also includes minor changes to other employment-related legislation in Ontario. These proposed changes will provide additional protection to internationally trained workers and digital platform workers who provide rides, make deliveries, or provide other services for companies like Uber and Instacart. The proposed changes also affect workers’ compensation benefits.

What are the requirements for new job postings under Bill 149?

Pay Transparency in Ontario

Ontario is joining other provinces across Canada by moving towards increased pay transparency in the workplace. One of the most significant changes arising from the Working for Workers Four Act is the requirement for employers to include information about the expected compensation for the position (or the range of expected compensation) on publicly advertised job postings. Employers must ensure that salary information is available to job applicants while they are searching for jobs.

While The Act does not provide details on what types of compensation are to be included in a job posting or how employers should calculate the range of compensation, best practice recommends keeping the compensation range as narrow as possible. Posting a wide salary range, such as “$50,000 to $75,000,” does not give as much information to a prospective applicant as a range of “$65,000 to $75,000” would. By keeping the compensation on your postings narrow, you’ll attract the right candidates. You’ll also save yourself time by deterring applicants with salary expectations above your range.

For some organizations in Ontario, pay transparency may involve providing insight into how compensation is determined and what factors are considered. For others, it may involve disclosing their complete compensation structure and where positions fall relative to others.

While this provision of the Working for Workers Four Act, 2024 is not currently in force, it is recommended that Ontario employers proactively adopt pay transparency and internal pay equity measures now, rather than wait for legislation to force action.

Read our latest blog on how to prepare for pay transparency in Ontario for more information.

Disclosure of AI

Artificial intelligence (AI) tools are becoming increasingly common in human resources, particularly in recruitment and hiring. Bill 149 enacts the first provision in Ontario that directly addresses AI and would require every employer who uses AI for screening, assessing, or selecting applicants to include a statement in publicly advertised job postings disclosing the use of AI. This requirement is expected to come into force on a future date to be determined. A significant concern when using AI in human resources processes is bias and discrimination. AI tools draw on training data and new inputs to learn and produce outputs. If those inputs contain biases, the output will replicate the bias, which could lead to discriminatory hiring practices. The intention of this measure is to ensure that workers’ privacy rights are protected. It ensures that individuals are not excluded from the job market because of AI biases.

Canadian Experience

To create a more inclusive workforce and reduce barriers faced by internationally trained workers to securing employment in their field, Bill 149 amends the ESA, prohibiting employers from including requirements relating to Canadian experience in publicly advertised job postings and application forms. Ontario will be the first in province in Canada to include provisions on banning Canadian work experience in legislation. This prohibition is expected to come into force on a future date to be determined.

This amendment supports new requirements that came into effect in December 2023. These amendments fall under the Fair Access to Regulated Professions and Compulsory Trades Act, 2006. It states that regulated professions are banned from requiring Canadian work experience requirements in the licensing of more than 30 regulated professions in Ontario, including accountants, lawyers, teachers, and various healthcare occupations.

Often, required work experience for a job in Canada can disadvantage internationally trained workers, despite having the necessary skills and qualifications for the position. However, this candidate pool may have the skills and qualifications required for the role. As with pay transparency issues, it may also be seen as discriminatory under Ontario’s Human Rights Code. Employers should review their job descriptions and hiring practices to ensure they are not creating barriers for internationally trained workers.

Bill 149’s employee wage protection provisions

Bill 149 aims to protect employees’ wages and address issues that are common in the restaurant and service industries. The Working for Workers Four Act, 2024, is proposing several amendments to the ESA relating to:

Prohibiting unauthorized payroll deductions;
Clarifying the methods of payment of tips and gratuities to employees; and
Banning the use of unpaid trial shifts.

Deductions

The ESA currently permits three types of deductions from an employee’s wages. These include statutory deductions (such as income tax, CPP, and EI), court-ordered wage garnishments, and deductions that are authorized in writing by the employee. While laws in Ontario prohibit unauthorized payroll deductions, these deductions are still common in the restaurant and service industries.

As with pay transparency, Ontario’s Bill 149 provides additional wage and rights protections to workers under the ESA, particularly those in the restaurant and hospitality industries. Specifically, employers are prohibited from withholding or deducting wages from an employee where a customer of a restaurant, gas station, or other establishment leaves without paying for their goods or services. This provision is currently in force.

Tips and Gratuities

Bill 149, Working for Workers Four Act also amends the ESA to specify the permitted methods for paying an employee their tips or other gratuities. Employers may pay an employee their tips or other gratuities by cash, cheque payable only to the employee, direct deposit into an account of a financial institution, or by any other prescribed method of payment.

Bill 149 also includes new requirements for tips and gratuity-sharing policies under the ESA. If an employer requires employees to share their tips with the employer, the employer must have a policy in place. This policy must be posted in the workplace where it would be visible and noticeable to employees. Lunchrooms or staffrooms are one popular example of these places.

These provisions come into force on June 21, 2024.

Trial Periods

Although the ESA outlines that employees must be paid for all permitted hours worked, unpaid trial periods continue to be common in the restaurant and service industries. Bill 149 amends the ESA to require any work performed during a trial period to be treated as “training.” As “training,” it falls within the definition of an “employee,” so any trial period is considered paid time. This requirement is currently in force.

Key Takeaways from Bill 149, Working for Workers Four Act, 2024

Bill 149 received Royal Assent on March 21, 2024. Some provisions are already in force, others are in force three months following Royal Assent (June 21), and others come into force on dates yet to be announced.
Bill 149 proposes significant changes to the Employment Standards Act, of 2000, including pay transparency in Ontario.
Employers will be required to disclose expected compensation and whether artificial intelligence (AI) is used during the hiring process in job postings. The use of Canadian work experience as a requirement in job postings or application forms will also be banned.
Bill 149 also aims to provide additional protection to workers in the restaurant, hospitality, and service industries and address persistent issues which are commonly found in these industries such as unpaid trial shifts and unauthorized deductions.
Lastly, Bill 149 introduces minor changes to other employment-related legislation in Ontario, providing additional protection and support to internationally trained workers and individuals engaged in digital platform-based work, as well as introducing positive changes to workers’ compensation benefits.

Need help with the new Ontario pay transparency obligations or other requirements of Bill 149?

We understand the importance of staying ahead of legislative changes and supporting HR professionals in meeting their obligations as employers. We offer a variety of resources and solutions that can assist with preparing for the requirements outlined in Bill 149. Our pay transparency resources help organizations develop a comprehensive compensation strategy and implement pay transparency measures quickly and easily. We also offer compliant hiring documents that ensure alignment with the new AI disclosure and Canadian work experience requirements.

With the increase in pay transparency, are you ready to ensure compliance with Ontario’s evolving regulations? Discover how our human resources information system (HRIS) can help streamline your processes. Our HR experts are there to provide guidance and help clients navigate these changes before they come into force. Start preparing now by downloading our free Bill 149 preparation checklist today.

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Get ahead of the legislative requirements in Ontario’s Working for Workers Four Act, 2024, and start preparing for the changes now. Download our free Bill 149 Requirements Checklist and as a bonus, you’ll receive our Pay Transparency Policy as well!

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