In 1997, Quebec passed the Pay Equity Act, legislation that has significantly reduced the wage gap between men and women, from 15.8% to 8.1% by 2020. Today, Quebec stands out from the rest of Canada as having one of the lowest gender pay gaps in North America. [1]
The Commission des normes, de l’équité, de la santé et de la sécurité du travail(CNESST) ensures that companies meet their legal obligations regarding equitable compensation.
How well do you know your pay equity obligations?
In this article, we explore the subject by answering 5 questions frequently raised by the employers we support during a total compensation and pay equity strategy, or a retention evaluation.
Please note that the definitions and concepts presented in this text are taken from the CNESST website.
1. What is pay equity?
Pay equity is the right of a person to receive a salary equal to that of another person occupying a job of equivalent value in the same company. Pay equity makes it possible to reduce wage gaps between typically female and typically male jobs. It is a right for all workers.
The wages of female-dominated jobs may have been undervalued due to gender discrimination. The purpose of the Pay Equity Act is therefore to correct wage discrepancies caused by this type of discrimination within the same company.
As an employer, it’s your responsibility to ensure that your team members receive fair, gender-neutral wages.
2. Is my company affected by the Pay Equity Act?
First, you need to assess the number of workers you employ, to determine whether your company has any legal obligations. If you have an average of 10 or more workers over the course of a year, your company will have to comply with the pay equity obligations.
Your obligations will then vary according to the number of workers in your company:
The only exception: companies with an average of fewer than 10 workers are not required to carry out pay equity work.
It should also be noted that the Pay Equity Act applies to all legal forms of enterprise (NPO, private, public and parapublic).
3. What are my company's pay equity obligations?
As soon as your company reaches 10 workers or more, you must carry out what is known as an initial pay equity exercise. initial pay equity exercise. As the name suggests, this is the very first step to be taken within your company.
As CNESST explains, “this exercise consists of identifying and comparing predominantly female and male job categories, and correcting any wage gaps.”
You have precisely 4 years to complete this exercise once you have reached the threshold of 10 or more workers.
The initial exercise involves several steps and can be laborious to complete. To make sure you comply with your obligations and avoid (rather hefty!) fines, call on our experts at Flexia Conseil.
Once the initial exercise has been carried out, you will be obliged to maintain pay equity in your company by carrying out a pay equity maintenance assessment every 5 years.
4. What are the main changes to the Act since April 2019?
Significant changes have been made to the Pay Equity Act in 2019. The major changes are as follows:
- Any salary adjustment must be applied retroactively to the date of the incident that caused the disparity, marking a change from previous methods that favored future adjustments.
- The exercise to ensure pay equity is maintained must take into account the 5 years preceding the deadline for carrying out this exercise (anniversary date).
- Companies with at least one union association are now obliged not only to inform, but also to consult workers and/or their union representatives during the pay equity maintenance process.
- The prior requirement to publish a notice has been removed. However, it is imperative to post the results and list the incidents that led to pay differences.
- Employers must keep pay equity analysis documents for a period of 6 years (previously 5 years).
For workers, these adjustments ensure that pay equity is a constant priority, not just every 5 years.
For employers, this means constant vigilance to ensure pay equity in all company decisions, positively influencing organizational culture and well-being at work.
5. How can artificial intelligence (AI) contribute to a pay equity exercise?
Over the next year, companies will have to adapt to an increased presence of AI in salary data analysis. New software can automate the identification of pay discrepancies and propose adjustments in real time.
However, it is essential that employers remain vigilant in interpreting and applying AI-generated recommendations, to avoid misinterpreting the data. Keep in mind that artificial intelligence can optimize a process, but does not replace the human being, who knows all the subtleties behind the results.
To facilitate compliance, Flexia recommends that employers :
- Appoint an internal committee dedicated to pay equity to monitor the progress of obligations and ensure rigorous follow-up.
- Use the digital tools made available by the CNESST to simplify the assessment and documentation of wage adjustments.
- Set up training programs to raise awareness among managers and employees of pay equity issues and their impact on organizational culture.
In Conclusion
I don’t need to remind you that it’s essential to take time to reflect on the situation within your company.
Flexia Conseil is here to make your job easier. We support you with the Flexia method: lightness in a heavy and rigorous process, humor (you have to find some fun in this kind of project!) and structure (so essential!).
Here’s how we can help you with total rewards and pay equity :
- Carrying out an initial pay equity exercise
- Evaluation of pay equity maintenance
- Establishing total compensation practices
- Development of a salary policy and structure
Listen to : CNESST’s new podcast, Fair valuewith a modern, entertaining approach to informing you about pay equity.
Anthony Langlois, CHRP
HR Consultant
[1] Le Québec, fier d’être à l’avant-garde de l’égalité entre hommes et femmes, Coalition Avenir Québec, March 10, 2023.
