As you may already know, the Government of Quebec revised the Pay Equity Act on April 10, 2019, making changes that will have a substantial impact on employers’ obligations.
Retroactive Pay Adjustments During a Maintenance Evaluation
The most significant change is the obligation to correct a wage gap observed during the Pay Equity Maintenance evaluation, with pay adjustments now being calculated retroactively to the date of the event that generated the wage gap. Also, while companies are still only required to complete a Pay Equity Maintenance evaluation every 5 years, during this evaluation, companies will have to identify any moments during the past 5 years where wage gaps occurred, and pay related adjustments to employees.
In concrete terms, this means that, at the time of the next pay equity audit for your company, if any adjustments are necessary, they must be retroactive to the date of the event that generated the adjustment. In addition, although firms are still required to conduct a pay equity audit every five years only, during this evaluation, they will need to identify when wage gaps have occurred in the past five years, as well as the salary adjustments required for the employees to whom this applies.
For example, if your next pay equity maintenance evaluation is due December 31, 2020 and your prior one was done at December 31, 2015, you would have to make retroactive pay adjustments to correct any pay gaps dating back to January 1, 2016. Needless to say, this can represent a significant amount for organizations.
Monitoring Changes That Impact Pay Equity
Concretely, this means that companies will need to monitor changes which could impact pay equity on an ongoing basis.
Changes that impact pay equity:
• Abolishment of a position;
• Creation of a new position;
• Changes in the gender predominance of a position;
• Salary changes;
• Changes to the salary structure;
Considering this, it will be important for companies to keep a register of events that have occurred in the organization. In order to be proactive in ensuring that the company meets their obligations, it is recommended to analyse the impacts on pay equity prior to making a change, for example before finalizing annual salary reviews, making employment offers, etc.
Having a Salary Structure: The Best Way to Ensure Compliance
The simplest way for companies to ensure they are compliant is to have a salary structure in place which respects pay equity. This way, if salaries are within the appropriate range for a position, you are sure to be compliant. While this may not be common practice for smaller companies, it is feasible, and strongly recommended for mid-sized companies *.
Other Changes to the Pay Equity Act
Another important change is the modification to the pay equity anniversary date for certain companies. This change could slightly modify a company’s deadline to complete their next evaluation. Other notable changes include the modification of the rules of the employee participation process, as well as changes to pay equity postings.
On October 24, 2019, amendments were made to the Regulation respecting the report on pay equity. As a result, employers are no longer required to submit a report on pay equity annually. In fact, after conducting an initial pay equity audit, the report on pay equity must only be submitted when a pay equity audit is carried out, that is, every 5 years.
For full details on the changes, the CNESST has published a summary document on their website (in French only) here.
* Note that for companies requiring assistance in putting in place a salary structure, subsidies are available with Emploi-Quebec. Please contact us or your Emploi-Quebec Representative for more information and to find out if your company could be eligible.