A recent notice in the Journal du Barreau advised that Quebec’s Pay Equity Commission is currently investigating employers who were required to complete their pay equity exercise by December 31, 2010 but have not done so yet.

Under Quebec’s Pay Equity Act (the “PEA”), employers with 10 or more employees are required to compare predominantly female job classes with predominantly male job classes to determine whether aspects of female jobs were disregarded, resulting in wage gaps. If such a gap exists, employers must determine and pay the compensation adjustments required to correct gender based wage discrimination and maintain pay equity within its enterprise thereafter.

Although the PEA has been in force since 1996, the Ministry of Labour reported approximately ten years after PEA came into effect that many employers were not in compliance with its provisions. In order to address this situation, the Act to amend the Pay Equity Act (“Bill 25”) was adopted. Among other things, Bill 25 established December 31, 2010 as the new deadline for accountable enterprises that had not completed a pay equity plan or determined compensation adjustments within the legal time limit to do so. Bill 25 also imposed pay equity audits at five-year intervals and set out how these were to be conducted.

How PEA Works and Penalties for Non-Compliance

Depending on the size of the enterprise during its applicable reference period, employers subject to the PEA must either:

  1. establish a pay equity plan; or
  2. determine the adjustments in compensation required to afford the same remuneration, for work of equal value, to employees holding positions in predominantly female job classes as to employees holding positions in predominantly male job classes.

More specifically, it needs to be determined whether an enterprise employed 10 to 49 employees, 50 to 99 employees, or over 100 employees during its reference period in order to clearly determine which pay equity obligations it is subject to (e.g. whether or not a pay equity committee is required, the types of postings that are required, etc.)

The PEA foresees various offences and fines for failure to meet many of the obligations that it creates.  For a second or subsequent offence, the fines are doubled. The PEA also provides that in determining the amount of a fine, the court must take particular account of the injury suffered and the benefits derived from the commission of the offence. The PEA also provides that penal proceedings for an offence against the PEA may be instituted by the Pay Equity Commission.

In addition to these fines, the PEA also foresees that various retroactive compensation adjustments can apply, and that interest and additional indemnities can be applied to late compensation adjustments.

Quebec Employers Should Review PEA Obligations and Watch the Mail

The recent notice in the Journal du Barreau states that employers concerned will receive a letter advising them of their obligations, of what they must do to fulfill such obligations and of the amount of time within which they must comply.  The notice does not mention whether or not fines or other penalties will be imposed upon employers identified as part of these investigations.  It is therefore important for all Quebec employers to ensure that they are compliant with their obligations under the PEA, and to take steps to be in compliance if that is not the case.