Working for Workers Four Act: Evolving Litigation Risks in the Hiring Process

As of January 1, 2026, Ontario’s new job posting and hiring process rules are in force under the Employment Standards Act, 2000. The rules impose requirements concerning compensation disclosure, artificial intelligence disclosure, notice to interviewed candidates, and record retention. These measures aim to increase procedural transparency for job candidates. Lerners partners George Hamzo and Sarah McGuire recently provided an overview of the multiple changes aimed at transparency.  

This article focuses on how the newly added transparency of the hiring process may present legal challenges that employers and employees should be mindful of.  

Hiring Process Litigation May Become a Two-Way Street 

In Ontario, lawsuits about dishonesty in the hiring process are possible, but not the norm. One way this arises is when an employee misleads an employer about material information during an interview, which could be grounds for dismissal under the right circumstances, as seen in cases such as McGregor v. Atlantic Packaging Products Ltd. and Aboagye v Atomic Energy. Similarly, there are examples of cases where an employer has been dishonest with an employee about the employer’s financial performance or the compensation to be provided to the employee. If an employee has been misled in such a manner and then wrongfully terminated, they may be entitled to more reasonable notice on the basis of bad-faith misrepresentations, as the courts recognized in Antunes v Limen Structures Ltd. 

Employers, in particular, face heightened legal risk arising from expanded disclosure and record‑keeping requirements, which create a more extensive evidentiary record. Put simply, there are likely to be more opportunities for an employee to claim that a misrepresentation was made during the hiring process. For example, an employer’s failure to comply with its disclosed salary range requirement could give rise to claims of negligent or fraudulent misrepresentation, or to larger wrongful dismissal claims—especially if an employee is induced to leave their current position for a better announced salary that the employer cannot actually provide. Employers should be careful to abide by their job postings, while employees should be vigilant about employers who try to depart from them.  

Record-Keeping Will Facilitate Litigation 

Part of the heightened legal risk will now come from employer obligations to preserve records. In particular, preserving job postings and their associated application forms will make it easier for employees to take action if any misrepresentation in the postings is discovered and the job does not turn out as expected. Employers should ensure the accuracy of their postings and application forms, as they may one day end up in court. 

The 25-Employee Threshold 

Most of the job posting requirements (posting the salary range, disclosing the use of AI, or informing unsuccessful applicants) do not apply to companies with fewer than 25 employees on the day the job advertisement is posted. This may reduce the administrative burden on smaller companies when ensuring compliance. However, employers should confirm whether they meet the employee‑count threshold before initiating a hiring process, as misclassifying their status could result in inadvertent non‑compliance and associated enforcement or litigation risk. 

While smaller employers may be exempt from certain obligations, job postings by larger companies are likely to contain heightened disclosure under the new regime, making those postings more attractive to applicants. Jobseekers are already wary of “dead-end” postings on popular job platforms and may be enticed by increased information on terms such as salary. Even where compliance is not required, smaller employers may want to mimic the disclosure of larger employers to stay competitive with top applicants.  

AI Disclosure is a First Step 

The new legislation only requires that employers disclose the use of artificial intelligence. This is a first step toward regulating AI use and disclosure, but it is not clear what it will really require in practice. A simple statement that AI will be used in the process could possibly meet the literal wording of the requirement. However, job applicants are increasingly wary of opaque hiring processes, including AI-assisted ones. More precise disclosure of how AI will be used to assist the company could make job postings more attractive to applicants. 

In any event, employers should remain attentive to evolving legal standards governing AI use in hiring, including obligations under personal information protection, human rights, and employment law frameworks. As regulatory guidance and case law develop, the adequacy of AI disclosures may be assessed.  

A Defined End to the Interview Process 

45 days after the final interview, prospective employers are now required to notify unsuccessful interviewees that a hiring decision has been made. For employees, this may offer a welcome end to seemingly indefinite hiring processes, allowing them to focus on other applications. For employers, this sets a time limit to firm up their relationship with the selected employee. Employers will want to ensure that, by the time they send notices to unsuccessful candidates, they have already finalized negotiations with their chosen new hire.  

From a legal risk perspective, to avoid inadvertent non‑compliance and/or litigation, employers should ensure that internal hiring systems and workflows include tracking and reminder mechanisms tied to final interview dates. 

Synergy with Other Recent Changes 

These new changes reflect Ontario’s current focus on disclosure in employment law. For example, as of July 1, 2025, employers are required to provide the following information in writing to employees before their first day of work (or soon after, when that is not possible):  

• The name of the employer 

• The contact information of the employer 

• A description of where the employee will be working 

• The employee’s “starting hourly or other wage rate, or commission, as applicable” 

• The employee’s pay period and pay day 

• A description of the employee’s initial anticipated hours of work 

While this information may seem uncontroversial, it could give rise to further disputes. Employees may be able to claim they were “constructively dismissed” if their working hours change significantly after this disclosure. Additionally, the identification of the employer could cause legal issues in “common employer” cases, where different related companies can be held jointly liable to one employee. Employers and employees should both make sure that this disclosure reflects their mutual understanding of the employment relationship.

Looking Ahead: The Future of Recruitment 

As a result of these legislative changes, there will be far more legally significant documentation regarding the hiring process. Job postings, application forms, and preliminary employment information will serve as records as a basis for future litigation, even in jobs that ordinarily do not have written employment agreements. In anticipation of future scrutiny, employers would do well to tread carefully, regard these documents as quasi-legal, and seek advice from employment lawyers on their contents. Conversely, employees should be aware of the maintenance of these records in the event that their employer has made a misrepresentation.  

If you require legal assistance with an employment dispute, the employment law team at Lerners would be happy to help.