What are the key things to know about Ontario’s Pay Transparency Act?
When Ontario’s Pay Transparency Act takes effect on January 1, 2026, employers with 25 or more employees will need to follow new rules for public job postings across job boards, company websites, social media, and other recruitment platforms. These new requirements include:
Pay Transparency: The posting must include information about the expected compensation for the position or the range of expected compensation.
The compensation range cannot exceed $50,000 annually.
This requirement does not apply to job postings where the expected compensation (or the high end of the range) is more than $200,000 annually.
AI Disclosure: A statement must be included in the publicly advertised job post if the employer uses Artificial Intelligence (AI), as defined in the regulations, to screen, assess, or select applicants.
Vacancy Disclosure: A statement disclosing whether the posting is for an existing vacancy or not.
No Canadian Experience Requirement: The posting and application form cannot include any requirements related to "Canadian work experience."
Interviewee Notification: Employers who “interview”, as defined in the regulations, a candidate for a publicly advertised job must inform the applicant of the hiring decision within 45 days of the last “interview”.
Record Keeping: The new rules also include a requirement for employers to retain records of publicly advertised job postings, associated application forms for three years, and interviewee notification.
These requirements are designed to make hiring more transparent and informative for job seekers, while encouraging organizations to review and clarify their internal compensation structures. Robert Half research from April 2025 reveals that 94 per cent of managers say hiring is taking them longer now than 2 years ago – knowing salary expectations upfront can help eliminate one of the barriers that lengthens the hiring cycle. For employers, this means updating recruitment practices and ensuring compliance well before the deadline.
How should employers across Ontario begin preparing?
With the Pay Transparency Act coming into effect on January 1, 2026, proactive preparation is key. Here are practical steps Ontario employers should take now:
Conduct a Comprehensive Compensation Audit: Review all existing pay scales, bonuses, and incentives. Identify and correct any internal pay inequities before pay ranges are made public.
Confirm your internal pay structures align with the ranges you plan to advertise. Establish clear salary ranges for every role. Document the criteria (e.g., skills, experience, market data) used to determine where an employee falls within the range.
Update Recruitment & Onboarding Materials: Create new, compliant job posting templates that include fields for the compensation range, AI disclosure, and vacancy status, as required.
Examine AI Usage: Review your recruiting technology to determine which components use “AI” for screening, assessing, or selecting applicants.
Develop New Communication Protocols: Establish a system for providing timely notification (within 45 days) to all covered interviewed candidates, regardless of whether they were hired.
Train HR staff and hiring managers on how to communicate the new compensation ranges and how to respond to questions from both candidates and current employees about pay.
Strengthen Record-Keeping: Implement a system to retain copies of all job postings, application forms, and covered communications for the required three-year minimum.
