TLDR: Ontario’s Pay Transparency Act (in force January 1, 2026) requires employers with 25 or more employees to include salary ranges in every publicly advertised job posting, disclose AI use in hiring, state whether a vacancy actually exists, follow up with interviewed candidates within 45 days, and retain recruitment records for three years. Non-compliance carries penalties up to $100,000 per individual and $500,000 for repeat offenders. This guide explains every obligation, the rules on range width, what counts as compensation, and how to build a compliant hiring process from scratch.
Table of Contents
- What Is Ontario’s Pay Transparency Legislation?
- Which Employers Must Comply?
- Salary Range Rules: What Must Be Posted
- What Counts as Compensation
- Canadian Experience Ban
- AI Disclosure Requirement
- Ghost Job and Vacancy Statement Rule
- 45-Day Candidate Follow-Up Obligation
- Record Retention: 3-Year Requirement
- Penalties and Enforcement
- 2026 Compliance Checklist
- 10 Common Mistakes
- Frequently Asked Questions
What Is Ontario’s Pay Transparency Legislation?
Ontario’s pay transparency requirements did not arrive through a single Act. They came through a series of amendments to the Employment Standards Act, 2000 (ESA) introduced under the Working for Workers legislative series — specifically Working for Workers Four (Bill 149, 2024) and subsequent Working for Workers legislation. The amendments added new sections to Part III of the ESA dealing with job postings.
The requirements took effect on January 1, 2026, for employers with 25 or more Ontario employees. They represent Ontario’s formal recognition that wage opacity harms workers — particularly women, racialized Canadians, and internationally trained professionals — by creating information asymmetry that disadvantages job seekers in salary negotiations.
For employers, the rules create a new layer of compliance sitting alongside the Ontario Human Rights Code, the OHSA harassment program, and the existing ESA minimum standards framework. Unlike the Disconnecting from Work or Electronic Monitoring policies (which require an internal document), pay transparency obligations are public-facing and externally observable — meaning your competitors, current employees, and the Ministry of Labour can all see your postings.
Which Employers Must Comply?
The obligations apply to employers with 25 or more Ontario employees at the time a publicly advertised job posting is made. “Publicly advertised” means the posting is visible to external candidates — whether through your website, a job board (Indeed, LinkedIn, Workopolis, ZipRecruiter), social media, or any other public channel.
| Employer Size | Pay Transparency Obligations | Notes |
|---|---|---|
| Under 25 Ontario employees | None (threshold not met) | Good practice to adopt voluntarily; threshold checked at posting date |
| 25–199 Ontario employees | All requirements apply | Count all Ontario employees including part-time, casual, term |
| 200+ Ontario employees | All requirements apply + heightened scrutiny | Director personal liability applies; Ministry more likely to investigate |
| Related employers under ESA s.4 | Aggregate count applies | If commonly controlled businesses share management, headcounts aggregate |
Key point on headcount: The threshold is checked at the date of posting. If you have 24 Ontario employees on January 15 and 26 on February 1, your January 15 posting is exempt but your February 1 posting is not. Part-time, casual, and fixed-term employees all count toward the threshold. Employees in other provinces do not count.
Internal-only postings: If a job posting is circulated exclusively to existing employees and is not visible to the general public, the posting requirements do not apply. However, if you post internally AND externally, the external posting must comply.
Salary Range Rules: What Must Be Posted
Every publicly advertised job posting must include either a specific expected compensation amount or a compensation range. The two key constraints are:
- Maximum range spread of $50,000 annually — if the role pays between $60,000 and $95,000, the spread is $35,000 and is compliant. A range of $60,000 to $115,000 has a $55,000 spread and is non-compliant.
- Exempt positions over $200,000 per year — positions where the top of the range or expected compensation exceeds $200,000 are exempt from the salary disclosure requirement. This is narrower than many expect: the role itself must exceed $200,000, not merely have that as a possible high end.
| Posting Scenario | Compliant? | Reason |
|---|---|---|
| “$65,000 to $90,000 per year” | Yes | Spread = $25,000 — within $50K cap |
| “$65,000 to $120,000 per year” | No | Spread = $55,000 — exceeds $50K cap |
| “$75,000 per year” | Yes | Specific amount, no range |
| “$22.00–$28.00 per hour” | Yes | Hourly range compliant; $6/hr spread reasonable |
| “Competitive compensation” | No | No compensation amount disclosed |
| “DOE / market rate” | No | No compensation amount disclosed |
| Role pays $210,000+ | Exempt | Exceeds $200K exemption threshold |
Must the range reflect reality? Yes. The compensation range must be genuine — it should reflect the actual compensation the employer anticipates paying for the role. Posting $60,000–$80,000 when you have no intention of paying less than $90,000, or when comparable new hires are currently earning $95,000, exposes you to enforcement risk. The range is a representation to both candidates and the Ministry of Labour.
What Counts as Compensation
The ESA requires disclosure of the “expected compensation” or “compensation range.” The Ministry’s guidance clarifies what is and is not included:
| Compensation Element | Must Be Included in Posting? | Notes |
|---|---|---|
| Base salary or hourly wage | Yes | Core disclosure; minimum requirement |
| Non-discretionary bonuses | Yes | If guaranteed or formula-based, include in range |
| Commission (guaranteed component) | Yes | If role has a guaranteed draw or guaranteed minimum commission, must be reflected |
| Discretionary bonuses | No | Performance bonuses at employer discretion need not be disclosed |
| Benefits (health, dental) | No | Not required; optional to mention |
| Pension contributions | No | Not required |
| Car allowances / expense reimbursements | No | Not required |
| RRSP matching | No | Not required |
| Equity / stock options | No | Not required, though recommended for tech roles |
Commission-only roles: If a role is purely commission-based with no guaranteed floor, the obligation becomes more nuanced. Employers should disclose the realistic expected earnings range or the commission structure in the posting. A posting for a “100% commission inside sales role” with no earnings context is a grey area that the Ministry is likely to examine going forward.
Canadian Experience Ban
Effective January 1, 2026, Ontario employers may no longer include requirements for Canadian work experience in publicly advertised job postings. This prohibition is absolute — there is no exemption for size, industry, or role.
The rationale is straightforward: requiring Canadian experience systematically screens out internationally trained professionals, new Canadians, and recent immigrants — groups that are disproportionately racialized and who are already underrepresented in skilled employment. The requirement created a circular barrier that prevented people from gaining Canadian experience while simultaneously demanding it.
What this means in practice:
- Remove all language like “must have Canadian work experience,” “Canadian experience required,” or “experience in a Canadian workplace”
- You may still specify experience requirements generally (e.g., “5 years of experience in [field]”) — the prohibition is on geographic specificity
- You may still require Canadian professional credentials where they are a legal prerequisite for the role (e.g., “licensed under the College of Nurses of Ontario”) — that is a credential requirement, not an experience requirement
- Review your ATS templates and job description library — Canadian experience requirements are often buried in boilerplate that was not reviewed when original postings were created
AI Disclosure Requirement
If artificial intelligence is used at any stage of screening, assessing, or selecting applicants, the publicly advertised job posting must disclose this. The disclosure must appear in the posting itself — not in a privacy policy, not in terms of service, and not in an email sent after submission.
What counts as AI in hiring? The obligation applies broadly. Common tools that trigger the disclosure requirement include:
- ATS systems that use machine learning to rank or score candidates (e.g., Workday, Greenhouse, Lever with AI ranking features enabled)
- Resume screening tools that use AI to filter applications (e.g., HireVue, Paradox/Olivia, Eightfold AI)
- Video interview analysis software that scores candidates on language, tone, or facial analysis
- Chatbot-based initial screening tools
- AI-generated job matching or recommendation systems
What does not require disclosure: Standard ATS workflow automation (routing applications to folders, sending confirmation emails) without AI scoring or decision-making does not trigger the requirement. If your ATS automatically sends a “we received your application” email, that is not AI screening.
Practical tip: Before your next posting, contact each HR technology vendor to ask whether their platform uses AI in any screening, scoring, or selection function. Request written confirmation. Document the answer. If the vendor cannot confirm whether AI is used, assume it is and disclose accordingly — the cost of an unnecessary disclosure is zero; the cost of an omitted one is potentially $100,000.
Ghost Job and Vacancy Statement Rule
Every publicly advertised job posting must indicate whether it is for an existing vacancy or for anticipated future hiring needs. This requirement directly addresses the “ghost job” problem — postings that remain live long after a role has been filled (or was never real to begin with), wasting candidates’ time and generating false impressions of market demand.
Compliant approaches:
- “This posting is for an existing vacancy” — if you are actively hiring now
- “This posting is for anticipated hiring needs in the next 6 months” — if you are building a pipeline
- Take down postings within a reasonable time after a vacancy is filled — leaving a filled role posting live creates the same ghost-job problem the rule is designed to prevent
Talent pool disclaimers: Some organizations maintain evergreen postings to collect candidate profiles on an ongoing basis. These are now required to clearly state that the posting is not for an immediate vacancy. Without this disclosure, an evergreen posting looks misleadingly like an active search.
45-Day Candidate Follow-Up Obligation
Employers must notify candidates who were interviewed within 45 days of a hiring decision being made. The notification must inform the candidate whether a decision has been made for the position.
What this means operationally:
- Every candidate who progresses to the interview stage (whether phone screen, video, or in-person) must receive follow-up communication once a hiring decision is made
- The 45-day clock runs from the date the hiring decision is made — not from the date of the interview
- The requirement does not mandate feedback or explanation — simply notification that a decision has been reached
- There is no requirement to notify candidates who applied but were not interviewed
Implementation approach: Add a step to your hiring workflow: when a candidate is selected and an offer is accepted, trigger a notification email to all interviewed candidates who did not receive an offer. Many ATS platforms have rejection email automation that can fulfill this requirement if configured correctly.
Record Retention: 3-Year Requirement
Employers must retain the following recruitment records for a minimum of three years after the posting is removed from public view:
- A copy of the job posting as it appeared publicly
- Documentation confirming the employer’s headcount at the date of the posting (to verify the 25+ threshold)
- Records of compensation decisions made prior to posting (e.g., approved hiring range, compensation band documentation)
- Application forms and candidate communications for interviewed applicants
- Records of 45-day notifications sent
- Documentation of any AI tools used in the process
These records will be required if the Ministry of Labour conducts an investigation. Employers who cannot produce posting records face a presumption that records were not maintained — which can itself be a contravention.
Penalties and Enforcement
The penalties under the ESA for pay transparency non-compliance are substantial:
| Contravention Type | Maximum Penalty | Notes |
|---|---|---|
| First contravention (individual/director) | $100,000 | Applies to directors and officers personally |
| Repeat contravention (individual/director) | $500,000 | Applies where prior contravention established |
| Corporation first contravention | $100,000 | Entity-level liability |
| Corporation repeat contravention | $500,000 | Entity-level liability for repeat |
| Failure to maintain records | Order to comply + potential fine | Records required for 3 years after posting removed |
Director personal liability: A key feature of the ESA pay transparency provisions is that individual directors and officers can be held personally liable for contraventions. This is not merely a corporate fine — a director who signs off on non-compliant job postings can personally face a $100,000 penalty on a first contravention.
How enforcement works: The Ministry of Labour can investigate following a complaint from any person (a job seeker, an employee, a competitor). Investigations can also result from Ministry proactive audits or spot-checks of job boards. A defective posting on Indeed or LinkedIn is publicly visible and straightforward to identify.
2026 Compliance Checklist
| Action Item | Owner | Status |
|---|---|---|
| Confirm Ontario employee count exceeds 25 (if so, all obligations apply) | HR / Finance | |
| Audit all job description templates and remove “Canadian experience” language | HR | |
| Establish approved compensation bands for all roles | HR / Finance | |
| Verify compensation range spread does not exceed $50,000 per role | HR | |
| Confirm all roles over $200,000 meet exemption criteria | HR / Finance | |
| Survey all ATS/recruitment vendors on AI use; obtain written confirmation | HR / IT | |
| Add AI disclosure language to all posting templates where applicable | HR | |
| Add vacancy status statement to all posting templates | HR | |
| Configure ATS to trigger 45-day candidate follow-up notifications | HR / IT | |
| Establish 3-year record retention system for job postings and recruitment records | HR / IT | |
| Train all hiring managers on new requirements | HR | |
| Designate a compliance review owner for new postings before publishing | HR Leadership |
10 Common Mistakes Ontario Employers Are Making
| # | Mistake | Consequence | Risk Level |
|---|---|---|---|
| 1 | Posting salary ranges wider than $50,000 (e.g., $60K–$120K) | Direct contravention of ESA job posting requirements | High |
| 2 | Using “competitive salary” or “DOE” language instead of a range | Non-disclosure = ESA violation | High |
| 3 | Not removing “Canadian experience required” from legacy templates | Direct ESA violation; Human Rights Code intersect risk | High |
| 4 | Failing to disclose AI screening tools used by ATS vendors | ESA violation; may also raise Human Rights Code algorithmic discrimination concerns | High |
| 5 | Leaving ghost job postings live after a role is filled without removing or updating the vacancy statement | ESA violation; reputational damage | Medium |
| 6 | No system to notify interviewed candidates within 45 days | ESA violation; candidate experience harm | Medium |
| 7 | Not retaining posting copies and recruitment records for 3 years | Records violation; adverse inference in Ministry investigation | Medium |
| 8 | Assuming the 25-employee threshold doesn’t apply because you’re “just under” | Threshold must be checked at date of every posting; headcount can change | Medium |
| 9 | Posting compliant ranges on the company website but non-compliant versions on job boards | All public channels must be compliant; each posting is a separate potential contravention | High |
| 10 | Not training hiring managers who create postings independently | Non-compliant manager-authored postings; employer still liable | High |
Frequently Asked Questions
Q: Do the requirements apply to a role posted on LinkedIn even if the vacancy doesn’t exist in Ontario?
A: Yes, if the employer has 25+ Ontario employees and the posting is publicly visible, the requirements apply regardless of where the role is located. A remote role accessible to Ontario applicants and posted by an Ontario-threshold employer must comply.
Q: What if our compensation varies based on experience? Can we post a wide range?
A: The range must still not exceed $50,000 annually. If your true compensation range for a role spans more than $50,000, you may need to either narrow the range to what you realistically expect to offer, post separate job postings for different seniority levels with different ranges, or post a specific amount. Posting an artificially compressed range that doesn’t reflect reality creates a different problem — misrepresentation to candidates.
Q: Does a referral bonus or sign-on bonus need to be in the posting?
A: No. Sign-on bonuses are not required to be disclosed (though you may choose to mention them). The obligation covers base compensation and non-discretionary recurring pay, not one-time signing incentives.
Q: What qualifies as “interviewed” for the 45-day notification requirement?
A: The ESA does not define “interview” narrowly. A phone screen, video call, or in-person meeting that involved substantive discussion of the candidate’s qualifications for the role likely qualifies. As a conservative practice, treat any candidate who had a live interaction with your team during the hiring process as an “interviewed” candidate for follow-up purposes.
Q: We’re at 23 employees now. Do we need to start complying?
A: Not yet — but you should prepare as if you will. The threshold is checked at each posting date. You may cross 25 employees between now and your next hire. Build compliant posting templates, establish compensation bands, and audit your ATS now so you are ready when the threshold is reached.
Q: Are the director personal liability penalties automatic?
A: No. Individual director liability under the ESA requires a separate finding that the individual directed, authorized, assented to, acquiesced in, or participated in a contravention. Directors who have established and implemented a compliance system and are not personally involved in defective postings have a stronger position. Willful non-compliance or deliberate avoidance creates the greatest personal risk.
Understanding Ontario’s pay transparency requirements is one piece of a broader HR compliance picture. For support building compliant job posting templates, compensation band structures, and ATS compliance reviews, see our HR consulting services or HR consulting for small business pages. For questions about how pay transparency intersects with employment contracts and offer letters, see Employment Contracts Ontario and Job Offer Letter Ontario. For information on onboarding new hires in a compliant way, see Onboarding Compliance Ontario.
External references: Employment Standards Act, 2000 | Ontario ESA Guide: Job Posting Requirements | Ontario Human Rights Code