ONTARIO’S NEW 2026 PAY TRANSPARENCY LAW AIMS TO REDUCE WAGE GAPS, BUT EXPERTS WARN IT MAY ALSO LIMIT BARGAINING POWER FOR SOME STUDENTS ENTERING THE WORKFORCE
When students scroll through job postings on LinkedIn this year, they may notice something new: more pay transparency.
Effective January 1, 2026, provincial pay transparency rules instruct various employers to disclose salary ranges in their job postings. Ontario’s new legislation requires employers with 25 or more employees to include salary ranges in publicly advertised job postings. Salary ranges must not exceed $50,000 unless the role pays over $200,000. Employers must disclose the use of artificial intelligence in hiring processes, and interviewed candidates must be notified of outcomes within 45 days.
The recruitment applies only to publicly advertised job postings, meaning employers are not required to disclose salary ranges for internal hires, promotions, or positions filled through private recruitment.
The Ontario government says this legislation aims to reduce wage gaps and improve the fairness quality of hiring processes. Similar pay transparency measures have already been implemented in jurisdictions such as British Columbia, Prince Edward Island, and several U.S. states, where early research suggests disclosure requirements can influence hiring norms even when wages themselves don’t immediately change.
“More information is always better than less information,” said Professor Gilles Grenier, an economics professor emeritus at the University of Ottawa, who studies labour markets. “There’s a lot of reasons to have more transparency in the labour market…one thing that the research has found is that there will be more pay equity if we have more transparency.”
Closing wage gaps for new entrants
Research has shown that salary disclosure can reduce pay gaps, particularly between men and women, by limiting employers’ ability to quietly offer different wages for the same work. A 2023 study by the United States’ National Bureau of Economic Research found that pay transparency laws reduced gender wage gaps by narrowing salary differences within firms, particularly newly hired workers.
For students and new graduates, who often lack industry knowledge or negotiating experience, posted salary ranges can offer a clear baseline when applying for jobs. A 2024 analysis by job site Indeed found that job postings with salary ranges received more applicants and reduced the likelihood of candidates dropping out later in the hiring process due to mismatched expectations.
Why wages might not rise
Despite the equity benefits, Grenier says pay transparency can also limit wage growth in certain areas,
“There has been some evidence that because transparency forces employers to reveal the wages of all their workers, there’ll be a tendency to have lower wages than there would be otherwise,” he said.
Some research suggests that pay transparency can weaken individuals bargaining power and lead employers to compress wages or rely more on standardized pay bands instead of negotiating individually.
Grenier explains how public salary ranges can make individual negotiation more difficult.
“You cannot negotiate your wage, because if you negotiate a higher wage, then employers will have to give it to others too,” Grenier said. “So, employers would be more reluctant to give higher wages to some workers.”
That dynamic could affect students differently depending on their field. While transparency may protect those vulnerable to underpayment, it could also limit opportunities for standout candidates to negotiate above-average pay.
“If you were a superstar and you’re the only person who can fill a particular job and you could negotiate a higher salary, salary disclosure will limit you in your possibility to negotiate,” Grenier said.
Privacy and Canadian values
However, Grenier added that the new law also brings new concerns about how far pay transparency could go in a country that traditionally treats income as a private matter.
“In Canada, a lot of things are confidential,” Grenier said. “Your medical record, your banking record, and also your income, is something that people don’t want everybody to know.”
The Ontario government also released a consultation paper in 2024 seeking public input on aspects of the job posting rules that form part of the pay transparency framework. Public-sector salaries in Ontario are already disclosed but expanding similar practices to the private sector raise broader questions about consent and social norms.
“People should be consulted before making laws that will make salaries transparent,” Grenier said. “Society has to have consensus among the population that this is what you want.”
What students should expect
In the short term, Grenier says pay transparency laws are unlikely to dramatically change wage levels on their own.
“The research seems to suggest that wages may be going down slightly, but there’s a lot of other factors that affect wages,” he said.
He added that even in industries where salaries are fully public, wages can still rise due to broader economic forces.
“I don’t think this factor will have an important impact on wages,” Grenier said. “But it will have some impact on how wages are communicated.”
For students applying to internships, co-op positions, and entry-level roles, the biggest change may be knowing what a job pays before applying, even if the number itself stays the same.
