ONTARIO PAY TRANSPARENCY ACT: NEW EMPLOYMENT STANDARDS RULES FOR 2026

Ontario continues to modernize its employment and labour framework in response to evolving workforce expectations, technological change, and increased regulatory oversight. Among the most significant recent and upcoming changes is the Ontario Pay Transparency Act, which introduces new disclosure, recordkeeping, and hiring obligations for employers operating in the province.

Once in force, the Act will impose mandatory pay transparency requirements on publicly advertised job postings, expand notice obligations during the hiring process, and regulate the use of artificial intelligence in recruitment. These reforms intersect closely with the Employment Standards Act, 2000, reshaping how Ontario employers approach hiring, compensation disclosure, and compliance.

What Is the Ontario Pay Transparency Act and Who Must Comply?

The Pay Transparency Act was passed following royal assent and is expected to be brought into force by regulation in stages beginning in 2026. The Act applies broadly to employers operating in Ontario, including corporations, partnerships, and any person acting as an employer.

The legislation applies to:

• Where an employer advertises a job posting to the general public.
• Employers using temporary help agencies.
• Businesses recruiting foreign nationals.
• Employers seeking candidates with Canadian experience.
• Organizations hiring assignment employees.

The Act captures external job postings and external job advertisements for any existing vacancy, whether posted online, in print, or through recruitment platforms. Certain limited exemptions may apply under certain conditions, but the scope is intentionally broad.

How the Pay Transparency Rules Fit Within Ontario Employment Standards

The new Act does not replace the Employment Standards Act; rather, it supplements existing employment standards obligations. The two statutes must be interpreted together, with many defined terms having the same meaning as under the Employment Standards Act 2000.

The following provisions of employment standards remain unaffected:

• Minimum wage requirements.
• Overtime and hours of work.
• Vacation pay and annual vacation.
• Unpaid leave, including personal illness.
• Protections for employees working in Ontario.
• Rules governing group terminations.

However, the Pay Transparency Act introduces new rules related to hiring and recruitment that operate alongside existing employment standards, particularly around wage disclosure and hiring notices.

New Salary Disclosure Requirements for Ontario Job Postings

One of the most impactful reforms is the requirement to disclose expected compensation in publicly advertised job postings.

Mandatory Compensation Disclosure

Ontario employers must ensure that every job posting includes:

• The expected compensation or compensation range.
• A general description of the position.
• Any variable pay tied to work performed.

The disclosure must reflect wages payable for the applicable pay period, inclusive of benefits paid where applicable. The goal of these provisions is to improve pay transparency, reduce wage disparities, and allow applicants to make informed decisions.

The requirement applies to:

• Each job posting for an existing vacancy.
• Any external job posting visible to the general public.
• Job advertisements issued by temporary help agencies.

AI Use in Hiring: New Disclosure Requirements for Employers

The Act introduces express obligations relating to artificial intelligence in hiring.

Statement Disclosing AI Use

Where artificial intelligence is used to:

• Screen resumes;
• Rank applicants;
• Filter application forms;
• Select or eliminate candidates;

Employers must include a statement disclosing that AI is used in the hiring process. This applies whether AI is used directly by the employer or by a third-party recruiter.

The obligation applies to associated application forms and must be presented in writing, in the same manner as the job posting itself.

45-Day Hiring Decision Notification Rule

A further significant reform is the introduction of a mandatory notice obligation following a hiring decision.

Notice to Applicants

Ontario employers must notify applicants of the outcome of the hiring decision within 45 days of the last interview or final assessment.

This requirement applies to:

• All publicly advertised job postings.
• All candidates who participated in an interview.
• All select applicants under consideration.

The notice may be delivered electronically or in writing, provided it includes general information about the decision. This rule enhances transparency and respect for candidates throughout the hiring process.

Recordkeeping and Retention Rules Under the New Ontario Law

The Act introduces new record retention and documentation requirements.

Employers must retain:

• Copies of each job posting.
• Associated application forms.
• Records of AI disclosures.
• Notices related to each hiring decision.

These records must be retained for a prescribed period and made available in the event of enforcement action. Failure to maintain proper documentation may constitute non-compliance with employment standards.

Why the Ontario Pay Transparency Act Matters for Employers

The Act reflects a broader shift in Canadian labour regulation toward openness, accountability, and fairness. Similar reforms have already been implemented in British Columbia, and Ontario is following suit, particularly in how compensation information is disclosed to individuals seeking to perform work in regulated and competitive labour markets.

For employers, the Act:

• Increases regulatory scrutiny of hiring practices, including how compensation is communicated to candidates and how hiring criteria relate to skills development and role requirements.
• Raises exposure to monetary penalty for non-compliance with pay transparency and notice obligations.
• Creates new litigation risk related to unpaid wages and misaligned compensation disclosures.
• Impacts how employers structure compensation frameworks and employment contracts, especially where wage ranges and incentives are tied to role progression.

Employers must also ensure that pay disclosures do not conflict with a collective agreement, where applicable, and that transparency obligations are implemented in a manner consistent with existing labour and employment arrangements.

How Ontario Employers Can Prepare

Practical Compliance Steps

Ontario employers should begin preparing now by:

• Reviewing all publicly advertised job postings.
• Updating internal recruitment policies.
• Auditing compensation structures and wage ranges.
• Training HR teams on pay transparency.
• Assessing the use of artificial intelligence tools.
• Updating application forms and notices.

Special attention should be paid to hiring involving assignment employee arrangements and temporary help agencies, as shared compliance obligations may arise.

Penalties and Enforcement Under Ontario Employment Standards

The Act grants the Ontario government expanded enforcement authority.

Non-compliance may result in:

• Enforcement action by inspectors.
• Administrative penalties.
• Monetary penalty assessments.
• Compliance orders requiring corrective action.

Offences may be enforced in a manner consistent with the Employment Standards Act, and repeat violations may attract escalating penalties.

How Our Ontario Lawyers Can Help Your Business

Our Toronto-based litigation and business advisory lawyers assist employers across Ontario with navigating complex employment and labour regulation. We provide general help and strategic legal advice to ensure compliance with evolving employment standards, including new pay transparency obligations that affect both hiring practices and workplace policies for existing employees. We also advise employers on how and when such information must be disclosed to applicants, employees, regulators, and other stakeholders under Ontario law.

Our services include:

• Reviewing and drafting compliant job postings to ensure proper disclosure of pay and compensation.
• Advising on pay disclosure obligations, wage ranges, and expected compensation under the Ontario Pay Transparency Act.
• Risk management for hiring and recruitment practices, including compliance with notice, recordkeeping, and AI disclosure requirements.
• Employment contract and workplace policy review to align compensation structures with statutory obligations.
• Defence of enforcement action commenced under the Employment Standards Act or related legislation.
• Representation before tribunals and courts in employment and labour disputes.

Whether your business is responding to regulatory change, expanding its workforce, or managing legal risk in a competitive labour market, our lawyers provide tailored, practical guidance that protects your organization while respecting employee rights and minimizing exposure to regulatory penalties.