Employment Equity Act - Monetary Penalties – IPG-121
On this page
Overview
Employers subject to the Legislated Employment Equity Program (LEEP) under the Employment Equity Act (Act), must regularly report certain workplace information in accordance with the Act. Part III of the Act enables the use of monetary penalties to support compliance with specific requirements of the legislative regime. This policy sets out the national guidelines to apply monetary penalties as part of a consistent and transparent compliance and enforcement framework.
The monetary penalties system enables the Minister responsible for Labour (the Minister), through designated officials, to issue monetary penalties in response to violations set out in section 35(1) of the Act. Monetary penalties may be up to $10,000 for a single violation and up to $50,000 for a repeated or continued violation (subsection 36(2)).
One of the main pillars of the Labour Program's approach to compliance is to educate employers about the requirements and encourage proactive compliance. The Labour Program undertakes efforts to promote early and active involvement with employers to ensure they have the tools and knowledge they need to meet their legislated requirements. While monetary penalties represent one compliance tool that may be used alone, it is expected they will be issued after other efforts to achieve compliance, such as education and guidance, have been unsuccessful.
Objectives
The objectives of this document are to explain the nature of the application of monetary penalties in relation to designated violations of the Employment Equity Act, including:
Monetary penalties model
Compliance tool
Certain reporting requirements under the Act may be subject to monetary penalties for non-compliance. These requirements are set out in subsection 35(1) of the Act. Monetary penalties are issued through a Notice of Assessment (NoA).
While monetary penalties may be issued to deter non-compliance, they cannot be applied punitively. Designated violations under the Act are not offences, and the Criminal Code does not apply to them. Where proactive compliance measures have been taken and an employer remains non-compliant with the legislation, enforcement actions are applied in a fair, consistent and transparent manner.
Clear timelines are established at every stage of the compliance process to allow the employer to achieve compliance before escalation to the issuance of monetary penalties. Monetary penalties may not be issued more than 2 years after the Labour Program first became aware of the occurrence of the violation.
Designated violations
A monetary penalty may be issued to a private sector employer who fails to meet any one of the following reporting obligations that are designated as violations under the Act:
- without reasonable excuse, does not file an employment equity report on time
- without reasonable excuse, files an employment equity report but does not include all of the required information in their report, or
- knowingly includes false or misleading information in their report
Compliance process
Where an employer has not complied with the reporting provisions of the Act, the Labour Program will inform the employer in writing through a Notice of Non-Compliance and offer the employer support to achieve compliance. These compliance supports may include:
- education and awareness
- technical guidance
If the employer does not correct their non-compliance (within 60 days after the 1st notification is sent), the Labour Program will send a 2nd written Notice of Non-Compliance. The 2nd written notification will include:
- the provisions of the Act and Regulations for which the employer remains non-compliant
- the steps that the employer must take to correct the situation of non-compliance
- informational resources to support compliance
- the deadline for correcting the non-compliance after which a monetary penalty may be issued (within 30 days after the date of the second notification)
- the monetary penalty amount that will be applied if non-compliance continues, and how the amount has been determined
If the employer does not achieve compliance by the deadline set out in the 2nd written notification, a monetary penalty may be issued to the employer in accordance with the Act. The monetary penalty amount will be included in the NoA, along with applicable recourse mechanisms.
If an employer does not complete one of the following actions outlined in the NoA, and required by subsection 38(1) of the Act, then the violation is considered to have been committed:
- pay the stated penalty amount, or
- within 30 days, contest the assessment of the monetary penalty by making a written application to the Minister for a review, by the Canadian Human Rights Tribunal (Tribunal)
The employer will be liable for the penalty set out in the NoA and the violation will become part of the employer's compliance history for the purposes of assessing any subsequent monetary penalty for non-compliance that may be issued to the employer within the next 5 years.
Determining penalty amounts
The Act enables the issuance of a penalty of up to $10,000 for a single violation and up to $50,000 for a repeated or continued violation (subsection 36(2)). Penalty amounts are determined within the ranges provided, considering the following factors:
- the nature, circumstances, extent and gravity of the violation, and
- the willfulness or intent of the private sector employer and the employer's history of prior violations
Penalty amounts are determined on a case-by-case basis as follows:
Monetary Penalty Amount = Base penalty amount - Circumstantial reductions to base penalty amount (if applicable) + History of non-compliance amount (if appliableFootnote 1)
Base penalty amount - The penalty to be issued taking into account the nature, extent and gravity of the designated violation.
| 35(1) | Violation | Base Penalty Amount |
|---|---|---|
| 35(1)(a) | Without reasonable excuse, fails to file an employment equity report as required by section 18 of the Act | $2,000 |
| 35(1)(b) | Without reasonable excuse, fails to include in the employment equity report any information that is required, by section 18 and the regulations, to be included | $1,500 |
| 35(1)(c) | Provides any information in the employment equity report that the employer knows to be false or misleading | $3,000 |
Circumstantial reductions to base penalty amount - In limited circumstances, the base penalty amounts for violations set out in 35(1)(a) and (b) may be reduced by 50%. Reductions may be applied where the employer can demonstrate to the satisfaction of the Director of the Workplace Equity Division, that:
- fewer than 500 employees were working for the employer at the time of the violation, and that payment of the full base penalty amount would cause significant financial hardship to the employer, or
- the employer has remedied non-compliance by making the reporting requirements retroactively and has developed processes to prevent future non-compliance
History of non-compliance amount - Where an employer has been issued a monetary penalty in relation to any violation listed under subsection 35(1) of the Act within the preceding 5 years, an additional penalty amount is added to the base penalty amount. This ‘history of non-compliance amount' is equal to 2 times the base penalty for the violation. No circumstantial reductions can be applied to a history of non-compliance amount.
| 35(1) | Violation | History of non-compliance amount |
|---|---|---|
| 35(1)(a) | Without reasonable excuse, fails to file an employment equity report as required by section 18 of the Act | $4,000 |
| 35(1)(b) | Without reasonable excuse, fails to include in the employment equity report any information that is required, by section 18 and the regulations, to be included | $3,000 |
| 35(1)(c) | Provides any information in the employment equity report that the employer knows to be false or misleading | $6,000 |
Contents of the Notice of Assessment
Monetary penalties are issued through a Notice of Assessment (NoA), which is served on the employer by registered mail or courier. The NoA will specify:
- the alleged violation
- the amount of the monetary penalty
- where and how payment of the monetary penalty can be made
- that the employer may contest the assessment of the monetary penalty by making a written application to the minister within 30 days, for a review by the Tribunal
- the manner in which to contest the assessment of the monetary penalty to the Minister
The NoA will also include a statement that when the penalty is not paid and no application is made for review of the monetary penalty in accordance with the Act, then the violation is considered to have been committed and will be included in the compliance history used to assess any monetary penalties issued to the employer for the next 5 years.
Service of Documents
Notices of Non-Compliance may be sent to the employer by email, fax or by sending a paper copy by registered mail.
Notices of Assessment including a monetary penalty must be sent to the employer by sending a paper copy by registered mail or courier to the employer's place of business and by sending an electronic copy to the employer's last known email address or fax number.
Payment of a monetary penalty
Full payment is required:
- within 30 days after the Labour Program serves the NoA, unless an application to contest the assessment of the monetary penalty is received by the Minister within the 30 days after the NoA was served, or
- where the employer has applied to the Minister to contest the assessment of the monetary penalty, within 30 days following the day on which the Tribunal issues a certificate determining the amount of the penalty under section 39(4)(b)(ii) of the Act
Method of payment
Payment of a monetary penalty is made to the Receiver General for Canada. They may be paid by:
- certified cheque
- money order, or
- other means provided by the Labour Program
Recovery of a monetary penalty
All unpaid monetary penalties will be referred to the Canada Revenue Agency for collection.
Request for review of a monetary penalty
An employer that is served with a NoA containing a monetary penalty may apply to contest the issuance of the monetary penalty to the Minister responsible for Labour. Such an application must be made within 30 days after the day the notice is served.
An application must be made in writing and submitted to the Minister in the manner described in the NoA. The application should set out the reasons why the employer contests the monetary penalty. It should describe:
- the reasons why the employer disagrees with the issuance of a monetary penalty, for example, if the employer asserts that they did not commit the violation, or
- the reasons why the employer disagrees with the amount of the penalty, such as:
- the incorrect base penalty amount was applied, or
- circumstantial reductions should have been applied
Payment of the penalty is not required to request a review of the NoA.
Review of a monetary penalty by the Tribunal
When the Minister receives an application to contest a monetary penalty, it will be sent to the Chairperson of the Canadian Human Rights Tribunal. The Chairperson will establish a one-member Tribunal to review the NoA. The employer will be given the opportunity to appear before the Tribunal to present evidence and make representations to it with respect to the alleged violation and penalty amount.
The Tribunal will make determinations on whether the violation was committed, and if so, on whether the penalty amount was applied appropriately and was consistent with the Act.
A determination of a Tribunal is final and, except for judicial review under the Federal Courts Act, is not subject to appeal or review by any court.
Page details
- Date modified: