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November 2018

Pause on Pay Transparency

Last week, the Ontario government introduced Bill 57, Restoring Trust, Transparency and Accountability Act, 2018 in the legislature. If passed, Bill 57 would amend a significant number of Ontario’s statutes, including the “Pay Transparency Act”. Under Schedule 32, “the date of commencement of the Pay Transparency Act, 2018 is changed from January 1, 2019 to a day to be named by proclamation of the Lieutenant Governor.”

On the heels of introducing Bill 47 (Making Ontario Open for Business Act, 2018) that repeals sections of Bill 148 (Fair Workplaces, Better Jobs Act, 2017), the Ontario government has effectively pressed the “pause” button on pay transparency legislation.

Ready or not...

The commonly held belief is that many employers were not ready to comply with the January 1, 2019 effective date and based on the numerous roundtables we held with 150 companies to discuss the requirements of Act, we tend to agree.

During the sessions, most employers raised questions regarding the Pay Transparency Act. Roundtable participants were wondering what exactly they should disclose in their public job postings. Should they disclose the full salary scale or just a portion? Should they include other components of total rewards, such as variable pay?

For some organizations, the above questions on including compensation externally were just the tip of the iceberg. From an internal point of view, there were a wide range of transparency-related issues to overcome. For instance, many organizations don’t publish pay ranges, or they publish pay ranges but don’t explain how the pay ranges were established.

MAKING THE MOST OF THE ‘PAUSE’

As the wave of support for pay transparency and closing the gender pay gap continues to grow, we recommend employers take full advantage of this “pause” by:

  • ensuring their compensation programs and practices are current
    • review the guidelines of their compensation strategy
    • ensure that their compensation practices are fair and aligned with their strategy
    • update their programs and practices that require a refresh
  • highlighting gender pay gaps and workforce composition concerns and making the necessary changes
  • developing a communication strategy and leading the conversations on pay in their organization
    • decide on what to communicate to managers and employees; this may include educating them on the components and value of total rewards and on the essentials of compensation, such as how pay structures are designed and administered

There is a saying that if you don’t tell people the whole story, they will make up their own, and this is particularly true when it comes to compensation.

Ontario’s Pay Transparency Act is intended to bring about change, and with all change comes questions and challenges to overcome. This pause will allow employers to make some strategic decisions and build their own story. Those organizations will be in a much better position when the Pay Transparency Act comes into effect.

Contact us should you wish to learn more about how Normandin Beaudry can help.