ESA Changes effective January 20026

If you run a small business in Ontario with 25 or more employees, your job postings changed on January 1, 2026 — whether you were ready or not. A series of amendments to the Employment Standards Act (ESA), introduced through the Working for Workers Four Act and related legislation, now impose significant new disclosure obligations on employers who publicly advertise positions. The rules affect pay transparency, the use of artificial intelligence in hiring, and how you communicate with candidates after an interview. Non-compliance can lead to Ministry of Labour scrutiny and potential fines.

Here’s what you need to understand and what to do about it.

Pay Transparency: Show Your Cards

Ontario now requires employers to include expected compensation — or a range of expected compensation — directly in publicly advertised job postings. If you post a range, the gap between the low and high ends cannot exceed $50,000 per year. This requirement applies to any position where the expected annual compensation (or the top of the range) is $200,000 or less.

“Compensation” follows the ESA’s definition of “wages,” which broadly covers base salary, variable pay, and most other forms of monetary remuneration. It does not include tips, discretionary bonuses unrelated to performance, or employer benefit plan contributions.

For many small businesses, this is a meaningful shift. You can no longer use vague language like “competitive salary” or “commensurate with experience.” You need a number, or a clearly defined range, before you post.

The practical step: audit your pay structures now. If you haven’t formalized salary bands for each role, this is the time. Ensure your posted ranges are consistent with what you’re actually paying current employees — because they’ll see these postings too.

AI Disclosure: Transparency About Your Tools

If your business uses artificial intelligence at any stage to screen, assess, or select job applicants, you must now disclose that fact in the job posting itself. The ESA defines AI broadly as any machine-based system that generates outputs such as predictions, recommendations, or decisions that can influence hiring outcomes.

This captures more tools than you might think. Applicant tracking systems that auto-rank resumes, chatbots that conduct initial screening, and platforms that use algorithms to shortlist candidates all potentially fall within scope.

The law requires disclosure, not a detailed technical audit. A straightforward statement along the lines of “This employer uses artificial intelligence to assist in screening applicants for this position” will satisfy the obligation for most businesses. However, the Ministry of Labour has not yet issued detailed guidance on the level of specificity required, so some employers are choosing to provide more detail about which tools they use and at what stage.

The practical step: inventory every piece of recruiting technology your business uses. Determine whether any of it qualifies as AI under the legislation’s broad definition. If it does, add a clear disclosure statement to your job posting templates.

Other Key Requirements

Beyond pay and AI, the new rules introduce several additional obligations. Every public job posting must now state whether the position is for an existing vacancy. This is intended to discourage speculative postings designed to harvest resumes rather than fill real roles.

Employers are also now prohibited from requiring “Canadian experience” in job postings or application forms, a change aimed at removing barriers for internationally trained workers.

After interviewing a candidate, you must notify them within 45 days of whether a hiring decision has been made for that posting. And all job postings and associated application forms must be retained for three years after the posting is removed.

What This Means for Growing Businesses

These rules apply to employers with 25 or more employees on the day a job is posted. If your business is approaching that threshold, plan ahead. The transition from informal hiring practices to structured, compliant recruitment processes doesn’t happen overnight.

The good news is that much of this is simply good practice. Transparent pay ranges help attract serious candidates and reduce time spent on mismatched salary expectations. Clear communication timelines build your reputation as a respectful employer. And understanding how AI tools influence your hiring decisions is something every business should be doing regardless of legislation.

The risk of ignoring these changes is real. The Ministry of Labour can investigate complaints, and non-compliance under the ESA can result in orders and financial penalties. For a small business, the reputational cost of being flagged for non-compliance may matter even more than the fine.

Your Compliance Checklist

Start with these steps: review and update all active job posting templates to include compensation ranges, AI disclosure statements, and vacancy status. Remove any references to Canadian experience requirements. Establish a system for notifying interviewed candidates within the 45-day window. Set up a record retention process that preserves postings and applications for at least three years. And if you use any recruiting technology, confirm whether it triggers the AI disclosure obligation.

These are not optional best practices — they are legal requirements. The sooner you act, the less risk your business carries into a competitive hiring market.

This post is for informational purposes only and does not constitute legal advice. Consult with a qualified lawyer for guidance on your specific situation. Connect with Onley Law today.