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Pay Equity Evaluation

All jobs evaluated by the pay equity Act must be compared to each other based on 4 different factors. The values ​​thus obtained are used to recognize the equivalence of a range of jobs within the same company. It is important to note that the generated values ​​are unique to each company. Similarly, the methodology and assessment need to be adapted to the unique characteristics of the company.

Factors that impact Pay Equity

•  Qualifications
•  The assumed responsibilities
•  The required effort (mental and physical)
•  The conditions under which work is performed.


Determining the number of employees in your company under the pay equity act

To determine the number of employees that are to be considered in the pay equity exercise, an employer must average the number of employees from the payroll register during the entire year of the companies reference period. The full-time employees, part-time, casual, seasonal, temporary or long-term absentees for various reasons must be included in the exercise. 

Owners, upper management, students working during their holidays, interns through a recognized professional internship program, some self-employed workers and staff working outside of Quebecshould be excluded from the exercise . For upper management be excluded, they must meet certain conditions, such as, being an owner, an important decision-maker within the company, or actively participate in the policy and direction of the business.


Establishing the Reference Period related to Pay Equity

The reference period of a company is based on when it officially began its activities (hiring of the first employee) and/or when it reaches 10 or more employees. The pay equity obligations of the company are then established based on the maximum number of employees reached during this period. Once the requirements of pay equity for the company are established, they remain constant throughout the life of the company, regardless of changes in the number of subsequent employees.


Beginning of company Activities           

Business Reference Period  (reaching 10 or more employees)

Operating on November 21 1996  

From  November 21 1996 to November 20 1997

Between  November 21 1996 and March 12 2004

12 months from the date of hiring the first employee

Between March 13 2004 and March 12 2008

12 months from the date of hiring the first employee

Between March 13 2008 and today   

From January 1 to December 31 of the calendar year.


Pay Equity Obligations versus Number of Employee

Companies who, during a calendar year, reaching an average of 6 or more employees must meet certain requirements in order to comply with the Pay Equity Act as of January 1st of next year. These requirements vary depending on the number of employees employed in the company.


Less than 6 employees

The employer must comply with Pay Equity as required by Article 19 of the Charter of Rights and Freedoms.


More than 6 employees

The employer must complete annually a Declaration of the employer in terms of Pay Equity (DEMES).


Between 10 and 49 employees

The employer must produce a DEMES, complete a Pay Equity Exercise as well as a Maintenance Exercise.


Between 50 and 99 employees

The employer must produce a DEMES, complete a Pay Equity Exercise, complete a Maintenance Exercise (every 5 years) and implement a Pay Equity program.


For 100 or more employees

The employer must produce a DEMES, complete a Pay Equity Exercise, complete a Maintenance Exercise (every 5 years), Implement a Pay Equity Program and set up a Pay Equity Committee.


Wage Adjustments necessary to achieve Pay Equity

To establish pay equity, a comparison of all predominantly female or male categories must be performed within a single company. If the exercise demonstrates inferior wages for a female category with comparable value, a wage adjustment (increase) must be made for the feminine category. Although, should the predominantly female category have a higher wage there will not be a reduction in their remuneration to redress differences.

Generally, the wage correction can be made in one (1) payment or five (5) instalments over a period of four (4) years


When should the annual declaration for pay equity (DEMES) be made?

For all registered companies:         within 6 months after the end of the fiscal year.        

For public companies and the Treasury Board:       September 1 of each year.      

 When should a company complete a pay equity exercise? 

The deadline is based on the start of operations of the company (fiscal year).


The employer’s pay equity declaration (DEMES)

The completion of a pay equity declaration by the employer (DEMES) demonstrates to the commission the pay equity progression in the company. The DEMES must be produced annually, regardless if the company is subject to produce a pay equity exercise, creating a plan or by following up with a pay equity audit. Since the regulation amendment adopted on  March 1st, 2011 to the Pay Equity Act, the DEMES is mandatory for:

•  All companies listed in the Quebec Enterprise Register reporting a minimum of six salaried employees.

•  All employers registered in the register of public authorities, regardless of their size.

•  The Treasury Board.

Failure to produce DEMES is considered an offense that could lead to penalties or fines of $ 1,000 to $ 45,000.


The information required to produce a DEMES

The DEMES can be generated online and requires the following information :

•  NEQ (Québec Enterprise Register Number).

•  The business established by NAICS code ( North American Industry Classification System 2007 ).

•  The operations start-up date.

•  The number of employees according to the calculation method required by the commission.

•  The posting date of the pay equity results, if applicable.

•  The posting date for the pay equity exercise, plan or audit results, if applicable. 


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