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What Staffing Firms Need to Know about the Pay Transparency Act

Posted by Chelsea Henry

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Sep 12, 2018 9:00:00 AM

What_Staffing_Firms_Need_to_Know_about_the_Pay_Transparency_ActThe former Ontario government made many changes to labour laws before being voted out of office in June. One of the most talked-about pieces of legislation was 2017’s Bill 148. This legislation introduced many changes, including revisions to holiday pay. It also raised the minimum wage.

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In March 2018, the provincial government enacted another controversial piece of legislation designed to change labour laws. This bill passed in the House and became known as the Pay Transparency Act.

What is the Pay Transparency Act?

This Act is designed to create more transparency about how employers compensate their staff. The goal of the legislation is to give people more clear information about wages, which will then allow them to challenge unfair practices and cases of discrimination.

Like the changes in Bill 148, the Pay Transparency Act will also affect staffing agencies and how they operate. Here’s what you need to know.

What Does the Pay Transparency Act Do?

This Act, which will come into effect in January 2019, requires a few changes to the way employers and staffing firms advertise jobs. The first change is a new requirement to post a salary range on any job advertisement. The reason for this is to create a public record, which job candidates can then refer to. Employers must offer candidates salaries within the stated range.

Under the Act, employers will also be prohibited from asking candidates about their past salary history. The reasoning is that what someone has been paid in the past should not affect what a current employer is willing to pay for the position.

Workers have new rights under the Act as well. Employers will no longer be able to take action against staff who discuss or disclose their salary. In the past, many employers had non-disclosure agreements built into their employment terms, and they could take disciplinary action against employees who discussed wages.

How Does It Affect Staffing Agencies?

There are a few very obvious effects the Pay Transparency Act will have on the way you operate your staffing agency. The first is that you’ll need to revise any and all job postings to include a salary range. You’ll need to get this information from your clients.

The next change may be to questions you ask during screening interviews. You’ll no longer be able to ask about previous compensation. If you ask about salary history as part of your screening or interviews conducted on behalf of your clients, you’ll want to remove these questions now.

Finally, staffing firms will need to review employment contracts and remove any language about reprimanding staff who disclose or discuss salaries. Non-disclosure agreements will need to be removed or made non-applicable to salary information. If your clients supply the contract, you’ll need to review it.

More Changes on the Way

There is another requirement employers will want to pay attention to, and that’s the reporting requirement of the Pay Transparency Act. Beginning in May 2020, organizations with more than 100 employees will need to monitor pay gaps and report on them.

The reporting requirement is probably the most daunting task, since it requires employers to keep track of yet another payroll factor. Staffing firms, which often employ more than 100 people, will almost certainly be affected by this requirement.

Is the Pay Transparency Act Necessary?

Many people are unhappy about the Act, feeling it adds undue burden to employers’ already heavy workloads. People also point to equal pay laws and non-discrimination legislation on the books in Ontario.

Others feel the Pay Transparency Act, which is the first law of its kind in Canada, is necessary if pay gaps are to be eliminated.

For now, employers and staffing firms alike should be prepared to implement the changes required by the Act. The provincial government may decide to review and amend the law, but for now, you may want to get a helping hand with reporting and other tasks.

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Topics: Compliance and Legislation

Chelsea Henry

Chelsea Henry is the team leader of risk management at The Staffing Edge. Chelsea’s passion for working closely with others in a challenging but rewarding environment is what makes her an important asset to our members. Chelsea has over 10 years of customer service experience—five years specifically dealing with risk management in the staffing industry—and is JHSC certified. Through research, Chelsea helps keep members up to date on current legislation involving employer’s rights, and deals with their day-to-day challenges with labour laws. Outside of work, she enjoys spending time with her family, DIY projects, and photography.
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