Employment Equity Act: Understanding and Compliance

by Thom Tracy

2 min read

If you run a business in Canada, you may be responsible for ensuring the composition of your workforce meets a certain predefined threshold for demographic equality. Part of this responsibility includes compliance with the Employment Equity Act.

The Act does not apply to all Canadian private businesses. In fact, only federally regulated employers are covered. Only a small minority of businesses are considered federally regulated, some 12,000 enterprises with 820,000 employees, according to the Government of Canada.

If your business is covered, or if you live in certain jurisdictional zones where the concept of “employment equity” is enforced such as in British Colombia or Ontario, here are some important notes and tips to help you out.

The Basics of the Employment Equity Act

Canada’s Employment Equity Act is designed to prevent discriminatory hiring practices via nonmeritorious criteria. That is, Canadian businesses are forbidden from discriminating against four specific designated groups: women, visible minorities, the disabled, and aboriginal persons.

The legislative requirements of the Act don’t end there. In fact, most of these anti-discrimination provisions have long been active through the Canadian Human Rights Act.

What you should be concerned with as a small business owner is that your business needs to proactively cater to workers in the above-mentioned groups. You do this by satisfying the legal standard known as “employment equity.”

In 2014, the government introduced 26 new amendments to the Act. These amendments potentially affect the way your business may pay your employees, train staff, recruit new workers, and more.

What “Employment Equity” Means for Small Business Owners

Employment equity is different than nondiscrimination. The legislation directly states that “employment equity means more than treating persons in the same way” because it “requires special measures and the accommodation of differences.”

As a covered employer, this means you must discriminate in favor of aboriginals, visible minorities, the disabled, and women. These four major groups are considered systemically underrepresented in the Canadian workforce.

In practice, individuals from these groups must be hired before equally qualified candidates of other races or ethnic groups. This is sometimes known as the Duty to Accommodate.


Your first compliance responsibility is to create an employment equity plan. This plan specifies the policies and practices you have instituted to adhere to the Act, especially in the areas of hiring, training, promotion, and retention.

Your business must also take steps to encourage self-identification among applicants and employees. In other words, your business must encourage staff to point out whether they are considered disadvantaged.

To ensure compliance, the Act authorizes compliance officers from the Canadian Human Rights Commission to examine any covered business and take note of any potential violations of the standard of employment equity.

Even though the Commission officially focuses primarily on companies with more than 500 employees for full audits, you should still take steps to protect your assets and employees. Fortunately, all compliance reviews are preceded by an official written notice. If you receive one, you have two weeks to provide a workforce analysis.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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