Deadlines pass for Que. pay equity compliance

Many firms required to implement plan, publicly post compliance efforts
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 03/28/2011

The deadlines around Quebec’s pay equity legislation have been keeping Michael Hiles very busy.

“I’ve got a lot of clients running around with their hair on fire,” says Hiles, owner of human capital management firm A. Michael Hiles & Associates in Beaconsfield, Que.

As of Dec. 31, 2010, employers in Quebec subject to the amended Pay Equity Act of 2009 were required to have implemented a pay equity plan. Those that fail to comply could face a complaint filed with the pay equity commission and have to pay salary adjustments, with interest, along with potential fines. Employers at different stages of the pay equity process have different obligations and, as of March 1, 2011, affected employers were required to publicly post compliance efforts.

Many smaller employers felt daunted by the original Pay Equity Act of 1996 or felt their practices were sound, so they basically ignored it, said Hiles. But with the recent changes, “all of a sudden everybody’s minds were concentrated wonderfully and a whole lot of people began to ask questions,” he said.

At the end of 2010, many employers in Quebec had not complied with the latest regulations around pay equity programs. Just days before the deadline, despite months of publicity, the pay equity commission was receiving many calls with questions and concerns, said Louise Marchand, former president of the pay equity commission in Quebec.

Compliance was an issue in 2006 when a survey found one-half of employers in the province had not completed pay equity plans. So the act was amended in 2009 to better enforce equitable pay structures in the workplace and employers with 10 or more employees were required to implement or update pay equity plans.

If a business grows to 10 or more employees, it is subject to the Pay Equity Act as of Jan. 1 of the following year and has four years to complete a pay equity exercise. And if an employer sees its staff count drop below 10, it is still subject to the Act.

It’s thought about 40 per cent of small- and medium-sized companies are not complying with the law, which can be a huge problem in terms of costs, along with being unfair for those that do comply, said Florent Francoeur, president and CEO of the Ordre des conseillers en ressources humaines agréés (CRHA), Quebec’s HR association.

“It is, I would say, a complicated law that’s not easy to implement in companies,” he said. “Sometimes, they didn’t understand what they mean by ‘equity’ — they think that because they pay employees well that they comply with the law, which is not the case.”

Some of the smaller employers don’t realize the legislation applies to them and they can be blindsided by a pay equity complaint or audit, said Claudine Kapel, a principal at Kapel and Associates in Toronto.

“While a lot of organizations have a general understanding of pay equity and what it’s all about, sometimes they don’t necessarily know how best to proceed in ensuring that they’re compliant,” she said. “Sometimes, they can be quite surprised by the level of detail that is needed to complete the analysis.”

However, the commission has been very active in advising employers of the new requirements and the deadlines, said Marie Rinfret, president of the Quebec pay equity commission. A total of 6,000 employers have participated in free half-day information sessions, 43,863 people have used an online pay equity guide, 1,767 have done online training and there have been 21 downloads of the commission’s software to complete the pay equity exercise.

Everything has been in place to allow employers to comply with the law, said Rinfret.

And since Jan. 1, 2011, about 200 complaints concerning pay equity have been received by the commission, she said. But complaints must be filed by May 30 to receive salary adjustments, five-per-cent interest and compensation retroactive to 2001. After this date, retroactive payments will only go back five years.

Thousands of employees at eight Montreal universities will receive hourly rate increases up to $6, with an average increase of about $2 per hour, after the schools conducted pay equity exercises to comply with the new legislation. Employees who held one of the targeted female-dominated jobs will be granted salary adjustments retroactive to November 2001, whether they are still working, retired or have since changed jobs.

“After years of hard work, we can now close the chapter knowing that our efforts have paid off for our members. We have managed to put an end to historic iniquities thanks to the determination and persistence of our union activists,” said Dominique Delorme, a representative of the Canadian Union of Public Employees responsible for pay equity in the university sector.

There’s clearly a misunderstanding of what the law is all about, said Hiles. The law is trying to identify circumstances where there is systemic and, usually, inadvertent discrimination based on gender. It’s all about doing analysis to make sure male and female jobs of equal value have access to equal pay.

“The law is not set up to make sure that people get hit over the head,” he said. “I’ve never in my whole career run into any organization that intentionally discriminates.”

One of the challenges for employers is most of the documentation is in French, said Tina Aswad, an associate at Stikeman Elliot law firm in Montreal. It’s also a time-consuming process.

“It’s quite a long procedure because there’s a lot of steps to finalize all the exercises, which includes identifying the job classes, identifying if you’re predominately female, showing the methods and the tools to evaluate the job classes and, after that, posting the results,” she said.

Pay equity is also taxing for employers that operate in multiple jurisdictions across Canada, said Kapel.

But the tools required for pay equity compliance support effective compensation management, said Kapel.

“We’re sort of proponents of job evaluations as being a good best practice process for compensation management, regardless of whether or not you’re in a jurisdiction covered by pay equity,” she said.

The Quebec program is complaint-based so while there will be some audits and the occasional letter, the commission will mainly get involved if an employee calls, said Hiles. Then the commission usually encourages the employee to discuss the situation with the employer and try to work it out. If there is still stonewalling, they’re encouraged to call the commission back.

“This is not a situation where there’s a policeman sitting behind a billboard waiting to get you,” he said. “The government wants their law respected but there’s a fair amount of leeway.”

However, the Quebec pay equity commission has rendered almost 7,000 decisions since 2001, according to Marchand, and with the latest deadline, there will be absolutely no leniency.

“They were really clear that this is the last chance,” said Francoeur. “(Employers) will pay the amount due but will pay some kind of additional fees and it can be expensive so they should complete the thing as soon as they can.”

Generally, there’s been more government activity in pay equity in recent years, said Kapel, citing an increased focus on the auditing process in Ontario.

“Certainly, we’re seeing in both provinces the intention from the governments to keep this front and centre and to remind employers to take actions to ensure compliance is maintained,” she said.

However, Quebec recently introduced Bill 130, which would abolish the pay equity commission and transfer its power to the employment standards commission. That is making a lot of people unhappy in Quebec because they believe the pay equity commission is useful and necessary to apply the law, said Aswad.

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