Ontario Municipal Human Resources Association

In today’s evolving regulatory landscape, competitive compensation isn’t just a tool for attracting and retaining talent; it’s also a matter of compliance. With new pay transparency laws coming into effect in Ontario, salary benchmarking and benefit reviews have become critical tasks for municipalities.

Here’s what your municipality needs to know about staying competitive, equitable, and compliant.

The Rise of Pay Transparency in Canada

Canada is following in the footsteps of jurisdictions like California and the European Union by introducing legislation aimed at reducing wage gaps and promoting fairness in the workplace.

• British Columbia became the first province in Canada to pass pay transparency legislation in 2023. As of November 2023, employers are required to include salary or wage ranges in all public job postings. Additional requirements, such as annual pay transparency reports, are being phased in for larger employers through 2026.
• Ontario introduced Bill 149, which proposes similar rules, including mandatory salary ranges on public job postings and a ban on asking for a candidate’s pay history. This law requires employers to re-evaluate how they advertise roles and structure offers.

These changes are part of a broader effort to promote equity, transparency, and accountability, particularly in addressing gender pay gaps and systemic bias in hiring and promotions.

Why Salary Benchmarking Matters Now More Than Ever

Salary benchmarking is the process of comparing internal compensation and benefits to market data to ensure your organization remains competitive, fair, and compliant. Here’s why it’s vital in this new era:

1. Compliance with New Laws: As salary disclosure becomes mandatory, outdated or inconsistent compensation structures may expose employers to legal risk or public scrutiny.
2. Talent Attraction & Retention: Today’s candidates, especially Millennials and Gen Z, are drawn to transparency and fairness. Benchmarking ensures your pay is competitive and positions your municipality as a trustworthy employer.
3. Closing Pay Gaps: Accurate benchmarking helps identify disparities and creates targeted strategies to address wage inequality, a key focus of current and future legislation.
4. Supporting Internal Equity & Morale: When employees understand how and why compensation decisions are made, trust improves and so does retention.

What Should Municipalities Be Doing?

Now is the time to proactively assess and update your compensation policies. Here’s a recommended approach:

• Conduct a Compensation Audit

Compare current salaries to industry standards using third-party data. Identify any anomalies across gender, role, seniority, or protected grounds.

• Review Job Descriptions

Ensure roles are clearly defined and reflect the value and scope of work. This improves benchmarking accuracy and supports equitable pay structures.

• Update Job Postings

Include clear and consistent salary ranges in job advertisements.

• Educate Managers

Train leadership on how to have constructive pay conversations and how new laws impact hiring, promotions, and performance reviews.

• Review Benefits Packages

Salary is just one piece of the puzzle. Benchmark benefits like vacation time, health coverage, parental leave, and retirement plans.

Written by: Ronald S. Minken, LL.B. and Tanya Sambi, JD