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Employment Equity Act: Understanding and Compliance

If you operate a small business in Canada, you may be responsible for compliance with the Employment Equity Act. If so, the Canadian government requires that you ensure you have a well-balanced workforce made up of different demographics. This act doesn’t apply to all Canadian private businesses. According to the Canadian government, it limits its scope to federally regulated employers, whose enterprises only account for roughly 18,000 businesses with 900,000 employees. Likewise, some provinces also enforce employment equity, including British Columbia and Ontario. So even if you aren’t a federally regulated employer, you may still have responsibilities to meet demographic targets in hiring.

What Are Some Employment Equity Act Basics?

Like the Canadian Human Rights Act before it, the Employment Equity Act aims to ensure all Canadians have equal opportunities for success. With this in mind, it forbids Canadian businesses from discriminating against four specific designated groups: visible minorities, women, the disabled, and aboriginal peoples. The legislative requirements don’t end there—the act also requires you to create and implement an employment equity compliance plan by collaborating with employee representatives; keep records that document plan results, and undergo regular assessments and audits.

How Does the Employment Equity Act Affect Small Businesses?

Employment equity has a different definition from nondiscrimination, per the Employment Equity Act. This means it creates a duty to accommodate members of affected groups. The legislation states that “employment equity means more than treating persons in the same way” because it “requires special measures and the accommodation of differences.” In other words, it requires businesses to provide preferential treatment to designated workers, which means giving them a leg up on qualified candidates of other races or ethnic groups.

What Are Some Employment Equity Act Compliance Requirements?

Creating an employment equity plan is usually the first thing businesses typically do to get up to speed with the act. With this plan, you specify the policies and practices you put in place to comply with the act, especially in the areas of hiring, training, promotion, and retention. Another way to comply is by encouraging applicants and employees to self-identify when they belong to a disadvantaged group. Keep in mind that the act authorizes the Canadian Human Rights Commission to send its compliance officers to covered businesses. While there, those officers take note of any potential violations of the employment equity standard.

How Do Small Businesses Prepare for Employment Equity Act Assessments?

In terms of full audits, the Canadian Human Rights Commission typically focuses on companies with more than 500 employees. Even though you might not fit into that category, you can still take steps to protect your assets and employees. This means keeping your compliance plan up to date, collecting documentation for each affected worker, and staying up-to-date on new rules that might affect your business. Fortunately, an official written notice precedes all compliance reviews. If you get one, you have two weeks to provide the Commission with your small business’ workforce analysis.

The Economic Equity Act puts applicants and workers on even footing, and it helps you create a diverse workforce that’s ready to face the future. This makes it a good policy to put into place, regardless of whether the Canadian government requires your small business compliance.

While monitoring your compliance adds to your small business, to-do list, accounting software can simplify the other aspects of your business, so you have the time to devote to your workforce. To keep financial data accessible and well organized, 4.3 million customers use QuickBooks. Join them today to help your business thrive for free.

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