Ontario is about to embark on one of the greatest changes to come to its labor market. Beginning January 1, 2026, expansive new pay transparency requirements will be phased in. Employers with over 25 employees are required to comply with these regulations. They will need to include compensation ranges in every public-facing job listing. The goal of this local initiative is to promote more transparent and equitable hiring practices within public organizations across the province.
Employers are required to include a salary/range on all job postings and other communications with prospective job applicants. They need to tell them how they use AI in screening, assessment, or selection processes. The new nascent rules continue to require that annual salary ranges do not exceed a $50,000 difference. It’s much wider when the job has a salary greater than $200,000. When the top end of the range is above $200,000, there is no upper bound on the difference. Our current regulation actually provides pretty much unlimited flexibility in such cases.
Nora Jenkins Townson, founder of HR consultancy Bright + Early, emphasizes the need for employers to establish a philosophy regarding their compensation strategies.
“You can’t really just add a number to a job posting. You need accurate, researched market data. You need a philosophy as to where you pay within that data and why,” – Nora Jenkins Townson.
Jenkins Townson cautions that employers could attempt to avoid transparency by posting very wide pay ranges. He continues, being upfront about compensation is a win-win for employees and prospective employees.
“It just overall puts employees and workers in a better position to have that information coming in and to know what a position pays before they decide to apply for it,” – Nora Jenkins Townson.
These new regulations are intended to advance equity in hiring through transparency and pay equity so candidates of all backgrounds can have a clearer view of compensation structures. Jenkins Townson says that this clarity will help level the playing field. Second, it moves the needle from the “squeaky wheel gets the grease” case, usually rewarding more adversarial players in the negotiation.
Deb Bottineau, managing director at staffing agency Robert Half Canada, calls the upcoming pay transparency legislation a “really big step in the right direction.” She claims that these modifications will make a more level playing field for all job seekers.
“It’s going to equalize the playing field,” – Deb Bottineau.
According to a recent survey by Indeed, 83% of respondents from British Columbia, Ontario, and Quebec view these changes positively. Plus, 73% of respondents reported being more likely to apply for positions. They’re especially focused on ensuring a salary range is posted along with the job. These statistics represent an exciting move in the direction to make pay transparent across North America. Provinces such as British Columbia and Prince Edward Island, as well as many jurisdictions across the US, have already adopted similar regulations.
Many organizations are still figuring out what the new requirements mean. Bottineau echoes this, saying it’s important to look under the hood and figure out what drives the company’s compensation decisions.
“From an employee perspective, I think having a solid understanding of how compensation works at the organization, how those decisions are made, what the ranges are … it’s just a lot fairer,” – Nora Jenkins Townson.
In this episode, she underscores the emerging use of AI in hiring and recruitment practices. It’s important to strike that balance so it works for employers and candidates.
“I think we’re going to continue to hear a lot of conversation as we head into the new year about the role of AI in recruitment practices. How do we create the right balance so the employer brand (and) the candidate experience are all kept top of mind?” – Deb Bottineau.
