Ontario Employment Law 2026: The Shift to Radical Transparency

As of January 1, 2026, Ontario’s employment landscape undergoes a significant shift. The latest amendments to the Employment Standards Act (ESA) move beyond basic compliance and force a new standard of transparency in hiring.

For technology companies, particularly those in the AI and FinTech sectors, these changes are not merely HR administrative updates, they are data governance and operational challenges. The new rules effectively end the era of the "black box" hiring process, requiring clear disclosures on compensation, algorithmic sorting, and decision timelines.

Here is a strategic overview of the changes and the commercial realities for your business.

1. The New Standard for Job Postings

The most visible changes arrive immediately on January 1st, impacting how you attract talent.

• Salary Transparency: For employers with 25 or more employees, every public job posting must now include the expected compensation or a salary range.

  • The Constraints: The range cannot exceed a $50,000 spread (unless the role pays over $200,000 annually).

  • The Strategy: Avoid the temptation to use the maximum spread for every role. In a competitive tech market, precise banding signals organizational maturity. For senior roles where equity and bonuses complicate the "wage" definition, leverage the $200k+ exemption to maintain negotiation flexibility.

• "Canadian Experience" Ban: You can no longer require Canadian work experience in postings or application forms.

  • The Fix: Review your job descriptions immediately. Replace geographic requirements with specific competency requirements (e.g., "Demonstrated knowledge of ASPE/IFRS" or "Experience with Canadian banking regulations").

2. The Intersection of AI and Hiring

This is the critical update for my clients leveraging modern tech stacks.

Beginning January 1, employers (25+ staff) must disclose in job postings if Artificial Intelligence is used to screen, assess, or select applicants.

The Governance Risk: Many high-growth companies use Applicant Tracking Systems (ATS) with built-in "candidate scoring" or "resume parsing" features. Under the new rules, this likely constitutes AI use.

• Action: You must audit your hiring stack. If you use automated sorting, your posting requires a disclaimer.

• Caution: Transparency invites scrutiny. Ensure you understand how your vendor’s algorithm ranks candidates to avoid potential liability for automated bias under human rights legislation.

3. Operational Data & Process Changes

The amendments also introduce strict procedural requirements that demand better data hygiene.

• The 45-Day Rule: You must now inform interviewed candidates of hiring decisions within 45 days of their interview.

• Record Keeping: All job postings and applicant information must be retained for three years.

• Sick Leave Documentation: You can no longer require a medical note for the first three consecutive absence days (up to three times per year).

Commercial Implication: The "ghosting" ban is effectively a data retention mandate. Startups often lack rigor in processing rejected candidates. You need to configure your ATS to automate these notifications and archive the data, or you risk non-compliance fines purely due to administrative oversight.

Looking Ahead: Health & Safety

Looking further down the roadmap to October 2026, stricter Health & Safety obligations will come into force. Employers with 20+ staff will require comprehensive written policies on psychological harassment and safety. While less urgent than the January 1 deadlines, this signals a broader regulatory focus on the "psychological safety" of the workplace.

Summary

The theme for 2026 is accountability. The government is requiring you to be open about what you pay, how you use technology to sort people, and how you communicate with them.

For tech-forward companies, this is an opportunity to align your hiring practices with your brand values: transparent, efficient, and data-driven.

Next Step: These changes require updates to both your external text (Job Descriptions) and internal configurations (ATS settings).

Contact us to review your standard Job Posting template and drafted AI disclosure language to ensure you are compliant for the January 1st launch.