Are you ready for pay transparency?

The government of Ontario is ushering in a transformative shift for job seekers and HR professionals with new Employment Standard Act (ESA) regulations set to take effect on January 1, 2026. Introduced in 2024 as part of the Working for Workers Act suite of regulations, this legislation establishes new requirements for publicly advertise job postings in Ontario.

Pay transparency aims to create a more competitive job market by ensuring fair and open compensation practices. In Canada, the federal government and the provinces of British Columbia, Prince Edward Island, Newfoundland and Labrador, and Nova Scotia have passed some form of pay transparency legislation.

The legislation follows the increasing demand from employees to have an open and honest conversation in the context of base salary transparency. Organizations must be prepared to address any challenges or concerns that may arise and should also develop comprehensive compensation strategies to ensure compliance and foster an environment of trust within the workforce.

In this context, pay transparency, which is now mandatory in several provinces, should also be seen as a strategic asset. Even if your organization is not legally obliged to comply, adopting these practices will help you stand out in the market and be proactive in attracting and retaining talent in a rapidly changing environment.

Implementing pay transparency requires thoughtful planning and assessment of current compensation programs, plans and policies. Employers should take into account potential biases and perceived unfairness, including proactively managing risks related to pay gaps.

Appropriate change management and effective communication are crucial factors in preparing employees and managers for rollout of pay transparency requirements, but employers should first consider the desired degree of transparency, ensuring it aligns with their organization’s values and goals.

It is important for employers to reflect upon what employees really want to know—most often, it is not who is being paid what, but rather what criteria are considered to determine and justify salary levels. Employers must also recognize that increased transparency may expose inequities within their pay policies and structures and may increase perceptions of inequity, leading to dissatisfaction, turnover and decreased performance. They should therefore invest in effective communication and prepare, educate, engage and equip leaders for discussions with their direct reports. Organizations can also proactively encourage a more amenable workplace by providing a holistic overview of their total rewards, so employees better understand and appreciate all aspects of monetary and non-monetary rewards.

• Are our salary structures current? Do we have market data to support this?
• Are our pay practices and policies (i.e., merit, promotions) unconsciously gender biased?
• Are our job levels, job evaluation practices and job descriptions up to date? When did we last conduct a pay equity analysis?
• Do our managers and employees understand our total rewards philosophy?
• To what degree do our leaders and employees understand the value of their total rewards?
• How will we explain the inclusion of pay in our job postings to our employees?
• How will we manage inquiries pertaining to the inclusion of pay information in competitors’ job postings?

Pay transparency holds promise in the journey towards fair and equitable compensation and program design, but its implementation demands thoughtful consideration and strategic planning. Companies must carefully maneuver between candidness and discretion, providing pertinent information to employees while managing the potential associated risks.

By enhancing total rewards programs prior to introducing new pay transparency policies, organizations can help their employees recognize the spectrum of monetary and non-monetary rewards.

Adapting to and embracing pay transparency are critical elements in ensuring that all employees are fairly compensated and in helping foster a work environment built on trust, mutual respect and inclusivity.

Want to find out more about Ontario’s pay transparency requirements taking effect on January 1, 2026? Contact Normandin Beaudry’s compensation experts now.

Not directly impacted? Implementing pay transparency best practices can help you stand out in the market and stay ahead of trends. Contact us!

This article was written by

Darcy Clark
Senior Principal, Compensation

Before joining Normandin Beaudry, Darcy served as a rewards consulting advisor at a global HR consulting firm for almost 20 years. He advises clients across a broad range of industries on the market competitiveness and design of director, executive and broad-based employee compensation programs. He assists in the development of compensation philosophies and pay strategies/programs that link pay with performance and assesses compensation interests that support organization’s desired risk profile.

Darcy is a passionate and driven consultant with experience in advising clients across a broad range of industries. He has deep technical expertise in establishing strategies and developing compensation solutions, with specialization in benchmarking, salary structure development, job evaluation, job architecture and career frameworks and incentive plan design.