Ontario is taking a significant step forward in promoting workplace fairness and accountability. With the passage of Bill 149 – the Working for Workers Four Act, 2023, the province has introduced a new pay transparency law that will require employers to disclose specific compensation details in job postings. Set to take effect on January 1, 2026, this legislation is designed to enhance equity, reduce help address systemic wage gaps, and create a more transparent hiring process.

More than a regulatory change, this law reflects evolving societal expectations around corporate responsibility, diversity, and fair compensation practices. Employers across Ontario should begin preparing now—not only to ensure legal compliance, but also to foster trust, attract talent, and promote internal wage equity.

Key Requirements Under Ontario’s Pay Transparency Law

When the new legislation comes into effect, employers will be required to include several key elements in all public job postings across job boards, company websites, social media, and any other platforms used for recruitment. These mandatory disclosures include:

• Salary ranges or the specific pay rate being offered for the position.
• An indication of whether the job opening is for a new role or if it’s replacing a previous employee.
• Disclosure of any artificial intelligence (AI) or automated technology used in the hiring or screening process.

These measures are intended to make the hiring process more open and informative for job seekers, while also encouraging organizations to audit and clarify their own internal compensation structures.

Why Ontario’s Pay Transparency Law Matters

This legislative move aligns Ontario with broader North American trends. Similar transparency laws are already in place in British Columbia, California, New York, and Colorado, each aimed at tackling wage inequities and fostering inclusive hiring practices.

Key objectives behind the law include: 

• Reducing gender- and race-based wage gaps by removing salary negotiation imbalances.
• Empowering job seekers with upfront compensation information.
• Promoting equitable and standardized pay practices across industries.
• Supporting a more transparent, trustworthy workplace culture.

By making salaries public, the law aims to reduce guesswork and help address power imbalances in job negotiations—particularly for women, racialized individuals, and underrepresented job seekers who may have historically been offered less pay for equal work.

Legal and Operational Implications for Employers

For Ontario businesses, this law is not just an HR update—it represents a new compliance obligation under the Ontario Employment Standards Act. Failing to meet the disclosure requirements could lead to reputational risks and potential legal exposure, depending on future enforcement measures.

Potential risks may include:

• Investigations or enforcement actions by the Ministry of Labour, subject to forthcoming regulations.
• Employee complaints related to internal pay discrepancies.
•  Reputational harm if advertised pay does not align with internal practices.
• Greater scrutiny of hiring practices where inconsistencies arise.

To stay compliant, employers will need to ensure that internal compensation structures align with what’s publicly advertised. This may require businesses to reevaluate existing pay frameworks and correct any unjustifiable disparities.

Proactive Steps Employers Should Take Before 2026

To meet the upcoming deadline and avoid compliance pitfalls, employers should begin preparing well in advance. The following six steps will help organizations ensure readiness and demonstrate a commitment to transparency:

1. Conduct a Comprehensive Compensation Audit
   Evaluate existing salary ranges, wage gaps, and compensation policies. Look for patterns that could raise concerns when disclosed publicly. Pay particular attention to differences between departments, roles, or demographic groups.
2. Create Standardized Job Posting Templates
   Build uniform posting templates that include consistent formatting for salary disclosures, job classifications, and required legal disclaimers. This reduces the risk of errors and ensures all postings are compliant.
3. Review and Document AI Usage in Recruitment
   If your hiring process involves AI tools—such as resume screeners or automated interview scoring—document their use and establish guidelines to detect and prevent bias. Transparency in tech usage is increasingly under scrutiny.
4. Train HR and Hiring Managers
   HR teams and recruiters should be thoroughly trained on the new requirements. They should understand both what needs to be disclosed and how to handle internal conversations about pay equity.
5. Update Employment Policies and Hiring Procedures
   Amend internal HR and recruitment policies to reflect the new transparency standards. This includes how salaries are set, how they’re justified, and how changes are communicated to existing staff.
6. Seek Legal Guidance
   Legal counsel can help you interpret the new rules and ensure your hiring practices are fully aligned with the Employment Standards Act. Getting ahead of potential legal risks now can prevent costly issues later.

Cultural and Strategic Benefits Beyond Compliance

Beyond regulatory compliance, pay transparency can positively influence corporate culture, employee satisfaction, and brand reputation. Organizations that embrace openness and fair compensation are likely to see a range of benefits, including:

• Improved talent acquisition by appealing to job seekers who value transparency.
• Increased employee retention, especially when staff feel confident they are paid fairly.
• A stronger employer brand, showcasing your organization as a progressive and equitable workplace.

In fact, Millennials and Gen Z workers—who now make up the majority of the workforce—are particularly motivated by values such as fairness, inclusion, and trust. Companies that proactively adopt transparent practices may find themselves better positioned to attract and retain top talent.

Aligning with Future Employment Standards

Ontario’s pay transparency legislation is part of a broader evolution in workplace law and employee rights. This law may soon be followed by similar requirements in other areas, such as:

• Disclosure of internal pay equity practices.
• Stronger regulation of AI and algorithms in employment decisions.
• Broader access to employee compensation data for staff.

By preparing for these shifts today, businesses can stay ahead of the curve and demonstrate a long-term commitment to fair and responsible employment practices.

As of 2026, employees and candidates will expect:

• That compensation decisions are both defensible and data-backed.
• That job ads reflect real, competitive pay and authentic hiring practices.
• That employers are transparent about the use of technology in recruitment.

The Time to Prepare is Now

Ontario’s upcoming salary transparency requirements will reshape how employers communicate pay and conduct recruitment. Although the new rules take effect on January 1, 2026, businesses should start implementing internal changes as soon as possible.

Early preparation means fewer surprises, smoother compliance, and a stronger employer brand built on trust, equity, and accountability.

Need help preparing your organization for Ontario’s new pay transparency rules? Our Employment Law team can guide you through the changes, helping you align your internal policies with legal requirements and best practices.