By Thomas Kent | Woolwich Observer
New legislation requiring employers to post salary information on job advertisements is intended to make hiring fairer and more transparent for workers, but University of Guelph professor Nita Chhinzer says the changes could also create unintended barriers for marginalized job seekers and challenges for small businesses.
Under Ontario’s Working for Workers Act, which came into effect January 1, employers must now disclose expected compensation on publicly advertised job postings.
The law also requires salaries to be listed within a $50,000 range and to include details on bonuses, commissions, or other allowances where applicable.
Dr. Nita Chhinzer, an Associate Professor of leadership and organizational management at the University of Guelph, says pay transparency can help job seekers better understand what roles are worth and avoid wasted time in hiring processes. At the same time, she warns that publishing salary ranges could unintentionally discourage some qualified candidates from applying at all.
“Marginalized people might hesitate to apply to jobs that are on the higher salary range and self-select out of the process, thereby creating a glass ceiling for themselves inadvertently,” Chhinzer said in a release. “They could’ve been the best-qualified candidate, but because they chose not to apply, they’ll never be assessed.”
Chhinzer told The Observer that this effect is rooted in well-documented behavioural research showing that people tend to underestimate or overestimate their own value differently depending on background and experience. Groups more likely to self-select out include new graduates, immigrants, women, and people from collectivist cultures, who research shows are less likely to negotiate aggressively during hiring.
By contrast, Chhinzer said those most likely to push for the top of a posted salary range are often candidates with long work histories in Canada, higher confidence levels, or more extroverted personalities – traits that have little to do with the actual value of the job.
One of the core goals of pay-transparency legislation is to address inequities created by negotiation-based compensation systems.
Chhinzer said research shows that when salaries are negotiated individually, people doing the same work can end up earning tens of thousands of dollars more than colleagues simply because they negotiated more effectively.
“You’d end up with 10 people working the same job that had the same value to the organization,” Chhinzer said. “One just negotiated better, and over time, they end up getting paid $30,000, $40,000, $50,000 more per year than the person who didn’t negotiate. That’s just a slimy way to be.”
At the same time, Chhinzer said posting salary ranges could create tension within organizations, particularly among existing employees.
When workers see a public posting advertising a higher salary range than what they currently earn, they may interpret the upper end of that range as a benchmark for their own pay.
“Nobody thinks they’re average,” Chhinzer explained. “Existing employees are likely to look at that range and say, ‘I should be at the 75th percentile or higher.’ That can retrigger salary negotiations or lead to perceptions of unfairness.”
In some cases, Chhinzer said, employees who feel underpaid may reduce their effort at work to rebalance what they perceive as an unequal exchange between their contributions and compensation.
Chhinzer also pointed to implementation challenges for small and medium-sized businesses, which account for the vast majority of employment in Canada. Many of these firms lack dedicated human-resources staff or sophisticated compensation systems.
“Small businesses don’t have the tools or the expertise to price out every job individually,” Chhinzer explained. “They’re often just trying to keep their heads above water.”
As a result, some employers may rely on other job postings to determine salary ranges, rather than assessing the value of a role within their own organization. While this market-based approach may work in some cases, Chhinzer said it can also lead to inconsistent or inaccurate pay structures.
Despite these concerns, she supports the principle behind pay transparency. Posting salary information can help both employers and job seekers avoid lengthy hiring processes that ultimately fail due to mismatched expectations.
“If a company says, ‘This is our ability to pay and this is what we think the job is worth,’ then candidates can decide whether it’s worth applying,” Chhinzer said. “If you’re going to reject the job based on pay, you might as well not waste your time, or the company’s time, applying.”
She added that enforcement of the new rules is likely to be complaint-based, and she does not believe employers who fail to comply should automatically be viewed as unethical.
“I wouldn’t think a company that didn’t post a pay range was being unethical,” Chhinzer said. “I would think they’re ill-informed.”
Overall, Chhinzer described the legislation as “good in principle, but hard to implement in practice,” particularly at a time when businesses and workers are already navigating economic uncertainty, technological change, and rising living costs.
“These issues might seem small compared to everything else going on,” she said, “but at the individual level, pay transparency is highly meaningful.”
