Close to 30,000 Quebec SMEs exempt from the pay equity declaration

The government of Quebec will soon be revising the Pay Equity Act. The next amendment will mean the end of the pay equity declaration for companies with 6 to 9 employees.

Since March 2011, Quebec businesses with more than 6 employees have had to complete an annual declaration on pay equity. This declaration, among others, raises awareness among businesses about their duties on pay equity and how to apply the Quebec law. For the provincial government, it is an effort at administrative control to ensure that businesses are in compliance with their pay equity obligations. It is only produced once during the life of the company, while the assessment of maintaining pay equity must be done every five years.


SMEs not subject to the law

However, the Pay Equity Act only applies to companies with 10 employees or more. SMEs with 6, 7, 8 or 9 employees are obliged to submit their pay equity declaration despite not being subject to this law. This administrative burden for businesses with less than 10 employees is explained by the government’s obligation to depend on the Registraire des entreprises du Québec (REQ), which classifies businesses on the basis of the number of employees. To take account of businesses with 10 employees, it was necessary to include the entire category as defined by the Registraire, including businesses employing 6 to 10 employees.

For this reason the Quebec government needs to amend its Pay Equity Act and limit the reporting obligation to businesses with 11 employees and more. However, companies with 10 employees within the meaning of the law should also continue providing their declaration.


A recommendation of the Audet report

If this amendment is applied, it will simplify the work of thousands of SMEs. According to the Pay Equity Commission, between 25,000 and 30,000 businesses will no longer have to complete the declaration. This administrative relief was one of the recommendations made by the Working Group on regulatory and administrative simplification which published its Audet report in 2012.  


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