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- Ontario Bill 149: How to Create a Pay Transparency Policy for Your Business
Ontario Bill 149: How to Create a Pay Transparency Policy for Your Business
- Legislative updates
Charlie Herrera Vacaflor, Employment Law & HR Content Senior Consultant
(Last updated )
Charlie Herrera Vacaflor, Employment Law & HR Content Senior Consultant
(Last updated )
Ontario's Bill 149 introduces new rules for pay transparency in job postings. These changes will affect how many employers share salary information with job seekers. Understanding whether your business is covered by these new requirements is the first step in preparing for compliance.
Bill 149's pay transparency requirements come into effect on
January 1, 2026
. Not every small business in Ontario is included under these rules. The law sets out clear guidelines to determine which employers fall under its scope.
Does Bill 149 apply to your small business?
Employee count thresholds and compliance deadlines
Employers in Ontario with 25 or more employees are required to follow Bill 149's pay transparency rules starting January 1, 2026. The employee count includes both full-time and part-time staff, regardless of whether they work seasonally or throughout the year.
The number of employees is typically determined by counting all individuals employed by the business in Ontario as of January 1 each year. Small businesses with fewer than 25 employees are currently exempt from these provisions, but staying informed about potential future changes is wise.
Industries with unique considerations
Most Ontario industries fall under Bill 149, but federally regulated sectors like banking, telecommunications, or interprovincial transportation follow federal employment standards instead. If your business operates in these sectors, verify whether provincial or federal rules apply to ensure compliance with the correct regulations.
Key pay transparency requirements under Bill 149
The legislation outlines four core obligations for employers to ensure transparency and fairness in hiring processes.
Include compensation ranges in job postings
Employers must include the expected compensation or salary range in every public job posting, such as those on job boards, company websites, social media, or print ads. Compensation ranges can include:
Hourly wages (e.g., "$18–$22 per hour")
Annual salaries (e.g., "$45,000–$55,000 per year")
Commission structures with expected earnings
Other role-specific pay types
Clear salary disclosure helps job seekers make informed decisions and aligns with Ontario’s push for equitable hiring.
Disclose AI use in hiring
If artificial intelligence (AI) is used for screening, assessing, or selecting candidates, employers must disclose this in the job posting. This transparency ensures applicants understand the role of AI technology in the recruitment process.
Specify existing or new vacancies
Job postings must indicate whether the role is an existing vacancy or a newly created position. This clarity helps applicants understand the context of the role, whether it’s a replacement or an expansion within the organization.
Prohibit Canadian work experience requirements
Bill 149 bans requiring "Canadian work experience" in job postings to promote inclusive hiring. Instead, use terms like "relevant work experience" or "experience in a similar role" to focus on skills and qualifications, supporting diversity and equity in recruitment.
Understanding pay transparency vs. pay equity
Pay transparency involves openly sharing salary ranges and compensation details in job postings to enhance visibility and trust. In contrast, pay equity ensures equal pay for similar work, addressing disparities based on gender or other protected characteristics. Bill 149’s transparency measures support diversity, equity, and inclusion by making salary information accessible and prohibiting discriminatory experience requirements.
Step-by-step guide to building a pay transparency policy
Creating a compliant pay transparency policy requires reviewing existing practices, setting clear guidelines, and embedding new procedures across your organization.
1. Audit current compensation data
Start by analyzing pay data across your business to identify inconsistencies or gaps. Key steps include:
Collecting pay rates, bonuses, and incentives for all roles
Comparing compensation for similar positions across departments
Identifying disparities based on qualifications or experience
Updating outdated pay structures to reflect current market rates
This audit ensures your compensation practices align with industry standards and legal requirements.
2. Establish salary bands and rationale
Define clear salary ranges for each role based on consistent criteria, such as:
Job responsibilities and required skills
Experience or education levels
Market pay rates for similar roles
Internal pay comparisons to maintain fairness
Well-defined salary bands promote consistency and support equitable compensation decisions.
3. Draft a written pay transparency policy
Create a formal policy document outlining your approach to compensation. Essential components include:
Purpose: Explain the commitment to pay transparency
Salary band methodology: Detail how ranges are set and updated
Disclosure procedures: Outline how pay information is shared in job postings
Employee inquiry process: Provide steps for staff to ask compensation-related questions
Compliance measures: Describe actions to ensure adherence to Bill 149
This policy serves as a guide for managers and employees, ensuring clarity and consistency.
4. Train hiring managers and supervisors
Equip hiring teams to implement the policy effectively. Training should cover explaining salary ranges, answering pay-related questions during interviews, and documenting AI use in recruitment to ensure compliance and transparency.
5. Communicate policy changes to employees
Inform current staff about the new pay transparency policy, explaining its purpose, impact, and where to find more details. Transparent communication fosters trust and reduces uncertainty among employees.
6. Conduct annual pay audits
Schedule regular reviews of compensation structures to maintain compliance and address emerging pay gaps. Annual audits, informed by industry salary surveys and market data, keep your pay ranges competitive and aligned with Bill 149.
Updating job postings and recruitment workflows
Use clear salary range language
Incorporate specific salary ranges in job postings to avoid ambiguity. Examples include:
"Hourly wage: $20.00–$24.00, based on experience"
"Annual salary: $50,000–$60,000, depending on qualifications"
"Compensation: $25.00–$30.00 per hour"
Avoid vague phrases like "competitive salary.
Remove Canadian experience requirements
Replace any mention of "Canadian work experience" with inclusive terms like "relevant professional experience" to comply with the law and attract diverse talent.
Notify interviewed applicants within 45 days
For publicly posted jobs, contact all interviewed candidates within 45 days of their interview or final round to provide updates, regardless of the hiring decision. This ensures compliance and maintains a positive candidate experience.
Record-keeping for compliance
Employers must retain hiring-related records for at least three years to demonstrate compliance with Bill 149. Required records include:
Copies of public job postings
Job applications received
Interview notes and communications
Posted compensation ranges
AI disclosure statements
Candidate notification records
Craft a clear AI disclosure statement
When AI is used in hiring, include a concise statement in the job posting, such as: “This position uses AI tools to assist with application screening and candidate assessment.” This informs applicants clearly and meets legal requirements.
Avoiding common pitfalls for small businesses
Balance pay range flexibility
Overly wide pay ranges can confuse applicants, while overly narrow ranges limit flexibility for varying experience levels. Aim for ranges that reflect market rates and provide clarity while allowing negotiation room.
Align internal and external pay
Ensure posted salary ranges match what current employees earn in similar roles to prevent dissatisfaction and maintain fairness across your workforce.
Stay updated with market trends
Regularly review industry salary surveys, government wage reports, and competitor job postings to keep your pay ranges competitive and compliant with market standards.
Benefits of pay transparency for recruitment and retention
Build candidate trust
Transparent salary ranges allow job seekers to assess whether a role meets their financial expectations, reducing uncertainty and building trust in your hiring process.
Strengthen your employer brand
In competitive Ontario job markets, clear pay information differentiates your business, attracting qualified candidates who value fairness and transparency. This enhances your reputation as an equitable employer.
Need expert support for Bill 149 compliance?
Peninsula can help. Our experts can provide tailored HR solutions to help your business implement Bill 149’s pay transparency requirements. Whether you need support creating contracts, handbooks, or company policies or guidance on any HR, Health & Safety, or employee matter, Peninsula’s certified HR experts are here for you 24/7. Call us today at
(1) 833-247-3652
.
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