CNESST pay equity audit: what to expect and how to prepare

A letter from the CNESST announcing that a pay equity audit file has been opened often worries employers. Yet an audit is not an accusation: it is a structured process whose first goal is to bring the company into compliance with its obligations under Quebec's Pay Equity Act.

Employers still need to know what the CNESST examines, how the file unfolds and which documents they must be able to provide. This guide explains the CNESST's pay equity audit program and how to prepare for it, ideally before the letter ever arrives.

What is the CNESST pay equity audit program?

The CNESST runs an audit program to make sure companies meet their pay equity obligations. According to the CNESST, any company can be selected for an audit under this program, regardless of its size or industry.

The Act allows the CNESST to investigate on its own initiative, in a non-adversarial manner. The information provided in the Employer's Pay Equity Statement (DEMES) helps it target its support and audit activities.

An audit can also follow a complaint. An employee, or a person representing employees, can file a complaint with the CNESST when the employer has not completed its pay equity work or has not done it in compliance with the Act. That recourse, however, is a separate process with its own deadlines and rules.

What does the CNESST audit?

During an audit, the CNESST examines several elements, including:

• whether the company completed its initial pay equity exercise or its pay equity maintenance evaluation;
• whether that work meets the requirements of the Act;
• whether the company filed its DEMES;
• whether the information reported in the DEMES is accurate.

In other words, declaring that the work is complete is not enough. The employer must be able to show that the work was done, and done correctly.

How does an audit unfold?

The CNESST describes the path of an audit file in four stages.

1. Opening of the file

The CNESST first notifies the employer that an audit file has been opened. This is the time to appoint an internal person responsible for the file and to gather the documentation.

2. Review of obligations

The CNESST asks questions to determine whether the employer has met its obligations and may ask for documents. Two outcomes are then possible:

• the obligations are met: the file is closed and the employer is notified;
• corrective measures are required: the employer is notified and given time to comply.

3. Decision

If the employer does not take the necessary steps to comply, the file is referred to the vice-presidency for pay equity and the commissioners, who render a decision.

4. Follow-up

The CNESST then ensures that the employer applies the measures set out in the decision.

Which documents should you be able to provide?

Employers must keep all documents used for their pay equity work for at least six years. The CNESST specifies that these documents may be requested during an audit under its program or when a complaint is processed.

Depending on the work completed, the file usually includes:

• the employee count that determines the company's obligations;
• the list of job classes and how their female or male predominance was determined;
• the job evaluation method and tools, along with the results;
• the estimate of pay gaps and the terms for paying adjustments;
• the content and dates of the postings, including the second posting;
• for a maintenance evaluation, the record of events that occurred since the last exercise;
• copies or confirmations of the DEMES filed.

In practice, rebuilding these documents is often the real challenge: an exercise completed years ago, a person in charge who has left the organization, postings whose content can no longer be found.

Have you received an audit letter from the CNESST? Our specialists review your file, rebuild missing documentation and complete the work that needs correcting, from the initial exercise to the maintenance evaluation. We support you throughout your exchanges with the CNESST. Discover our pay equity services

What are the consequences of non-compliance?

When an audit shows that a company is not meeting its obligations, the CNESST lists several consequences:

• the employer must comply with the decision rendered by the CNESST;
• the company's name is published on the CNESST website, in the list of offending employers;
• the company is liable to penal proceedings that can lead to a fine of $1,000 to $45,000.

On top of these consequences comes the financial impact of pay adjustments. When gaps are found, adjustments are generally owed from the date of the event that created them, and interest may be added for late payment. The longer the work is postponed, the larger the amount owed is likely to be.

How to prepare, even before being selected

The best preparation for an audit is to keep your obligations up to date. A few habits reduce both the risk and the stress of a potential file:

• Check the status of your work. Confirm the posting date of your initial exercise and the date by which your next maintenance evaluation must be completed.
• Compare your DEMES with reality. The dates and status you reported must match the documents you keep.
• Centralize your documentation. Keep the data, evaluations, postings and DEMES in a single file, in case the people who led the work leave.
• Keep a log of events. Recording, as they happen, the changes that can affect pay equity (new positions, restructurings, compensation changes) makes the maintenance evaluation much easier.
• Correct without delay. A late initial exercise or maintenance evaluation is simpler to resolve voluntarily than during an audit.

Frequently asked questions

Can a small business be audited?

Yes. According to the CNESST, any company can be selected. Obligations vary with the number of employees, however: the audit focuses on the obligations that actually apply to the company.

Does an audit mean a complaint was filed?

Not necessarily. The CNESST can open a file under its audit program on its own initiative. Handling a complaint is a separate process.

What happens if our pay equity work was never done?

The CNESST notifies the employer of the corrective measures to apply and gives it time to comply. The missing work must then be completed according to the requirements of the Act, and any pay adjustments owed must be paid.

Can we get support during an audit?

Yes. The employer remains responsible for the work, but specialized support helps prepare the file, answer the CNESST's requests and complete the corrections within the time allowed.

In summary

A CNESST pay equity audit comes down to three simple questions: was the work done, does it comply with the Act, and does the DEMES reflect reality? An employer who keeps its documentation and its work up to date can go through an audit with confidence.

If your work is behind or your documentation is incomplete, it is better to act before a file is opened. Talk to an expert about your pay equity needs.

This article is provided for information purposes only and does not constitute legal advice or professional advice. The rules surrounding the Pay Equity Act and the CNESST audit program may change: for any specific situation, consult the CNESST or a qualified professional.

Sources: CNESST, Pay equity audit program; CNESST, Évaluation du maintien de l'équité salariale; Éducaloi.