Is Rewarding Long Service a Thing of the Past?
Whether you joined an organization years ago or have been hired more recently, in the province of Quebec, the length of your service will no longer be a valid reason for compensation differentiation. Bill 176—which passed into law on June 12th, 2018—legislates labour standards and other provisions relating to family-work balance. It disallows provisions in benefits and pension plans which differentiate benefits based on date of hire for employees who perform the same task in the same establishment.
Examples include the following, when they are based on years of service or employment:
- tiered contributions formulas in pension plans,
- differences in reimbursement or co-insurance levels in benefits plans, or
- waiting periods for plan participation eligibility
The Bill also addresses changes and clarifications related to vacation, leave, hours of work, placement or recruitment agencies, and the definition of psychological harassment.
The Act is not retroactive, therefore existing plans that differentiate based on date of hire should remain unaffected. Once Bill 176 comes into force, it will only apply to new provisions, which means costs for employees in the province of Quebec may increase or, if an organization’s philosophy is to provide all members with the same benefits, regardless of jurisdiction, overall plan costs may spike.
Although this Act only applies to the province of Quebec, it is important to acknowledge the bigger question—will revoking long service reward be a trend we see other jurisdiction adopt, or will this remain an act exclusive to Quebec employees.
For support on long service rewards or more information related to Bill 176, please contact your benefits / pension consultant.