Clarifications concerning the application of federal and Quebec pay equity legislation during insolvency or bankruptcy proceedings

The COVID-19 health crisis has created an economic situation in which the number of business insolvency or bankruptcy proceedings could increase in the months and years to come. The Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) and the Canadian Human Rights Commission (CHRC) recognize the importance of protecting the rights of workers whose companies are in financial difficulty.

One of those rights is pay equity, the right to equal pay for work of equal value. This means that if two different jobs are of equal value to an employer’s business, the people doing those jobs should be paid the same.

Various laws in Canada aim to achieve pay equity, including:

  • Quebec’s Pay Equity Act, which applies to employers that fall under Quebec provincial jurisdiction and have an average of 10 or more employees;
  • The new federal Pay Equity Act, which came into force on August 31, 2021, and applies to federally regulated employers with an average of 10 or more employees.

Employers to which these two acts apply are required to conduct a pay equity exercise periodically to determine whether there are any pay gaps between jobs commonly held by men and jobs commonly held by women.

During insolvency or bankruptcy proceedings

When a proceeding is initiated under the Bankruptcy and Insolvency Act (BIA) or the Companies’ Creditors Arrangement Act, amounts due may have been calculated but not paid to employees. In addition, the employer may be in default of its pay equity obligations, and/or employees may not yet know if they are entitled to pay equity amounts for services rendered.

In these circumstances, it is possible that they submit to the Licensed Insolvency Trustee a proof of claim which may qualify as a claim provable in bankruptcy if the amount is determined, or a contingent or unliquidated claim if the claim is indeterminate. As well, a claim based on a pay equity obligation may constitute a priority claim if it meets the requirements of sections 81.3, 81.4 or 136 of the BIA.

In this type of situation, we invite trustees to inform debtors and bankrupts of their obligations under the Quebec Pay Equity Act, as well as the federal Pay Equity Act, in order to help safeguard the rights of creditors.

About the Quebec legislation

To learn more about the implications under Quebec law, you can visit the CNESST website.

Questions about the Quebec legislation?

Send an email to or call the toll-free number, 1-844-838-0808 (press 4). CNESST pay equity tools and training are also available free of charge at (French only).

About the federal legislation

Under the federal legislation, employers will have three years to develop a pay equity plan. Employers subject to the Act when it came into force will have to post their plan by September 3, 2024.

Questions about the new federal legislation?

Complete a Request for Information Form, send an email to, or call the toll-free number, 1-888-214-1090 (TTY: 1-888-643-3304), between 8 a.m. and 8 p.m. (Eastern Time), Monday to Friday. CHRC pay equity tools and training are also available free of charge at