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Pay Transparency and Holiday Pay: Will Recent Changes Have an Impact on You?

The Ontario Government recently passed the Pay Transparency Act, 2018, which comes into force on January 1, 2019 and forms part of the Province’s initiative to increase gender equity for women in the workplace. The rules for employers calculating public holiday pay are also set to change again, thanks to a reversal of recent amendments to the Employment Standards Act, 2000 (ESA). 

Next year, the Pay Transparency Act, 2018 brings new requirements related to compensation history, along with pay transparency reports. For example, employers cannot ask job applicants about their current/previous compensation, either directly or through a third party. However, employers can still ask for information regarding ranges of compensation comparable to the position for which the applicant is applying, and an applicant can still voluntarily disclose compensation information as long as it is unprompted. In those cases, employers can rely on information shared in determining the applicant’s compensation. 

At the same time, employers publicly advertising job openings must include information about expected compensation (or its range). Employers with more than 100 employees must provide a pay transparency report to the Ministry of Labour, which it will publish or make available to the public. The reports will include information relating to the employer, its workforce composition and differences in compensation in its workforce with respect to gender and other prescribed characteristics. Employers will have to post their pay transparency reports online or in a conspicuous place in the workplace. This requirement comes into force later than January 1, 2019. The first report for an employer with 250+ employees must be submitted by May 15, 2020, while the first report for an employer with between 100 and 250 employees must be submitted by May 15, 2021. 

Under the Pay Transparency Act, 2018 employers are prohibited from intimidating, dismissing or otherwise penalizing employees who:

  • make compensation inquiries;
  • disclose compensation information to other employees;
  • inquire about an employer’s pay transparency report;
  • provide the Ministry of Labour with information regarding an employer’s compliance or non-compliance; or
  • ask their employer to comply with the legislation.

The rule against reprisals for people sharing their compensation information within an organization was already mandated through recent Employment Standards Act, 2000 amendments. 

As part of those recent changes to the ESA, the rules around calculating public holiday pay also changed, but those changes have been put on hold pending a more fulsome review. Initially, the amendments meant public holiday pay would be determined by dividing the regular wages earned in the pay period before the public holiday by the number of days worked in that pay period. These changes increased the amount of public holiday pay for part-time/casual employees, and had been the source of confusion and a high volume of complaints at the Ministry of Labour.

The Ontario Government announced the rules around public holiday pay would revert to the old calculation that were in place prior to the recent ESA amendments. As of July 1, 2018, an employee’s public-holiday pay should be calculated by adding up the employee’s regular wages and vacation pay payable for the four weeks prior to holiday and dividing by 20. This total is the amount owed for the public holiday. (For employers paying their full-time salaried employees a regular day of wages for a public holiday, this reversal will not have much of an effect.)

This information comes from a general synopsis of the legislative changes Steinecke Maciura LeBlanc shared with the OAA. Contact your lawyer for advice specific to you.