Horizontal Audits Explained
A horizontal audit examines a persistent representation gap for a particular designated group at a sectoral level. It assesses not only compliance with the Employment Equity Act (the Act), but also seeks to identify system challenges and best practices for overcoming those challenges. This is an additional focus compared to an Employer-specific audit, which only considers the compliance of a particular employer with respect to all four designated groups.
Horizontal audits do not replace the employer-specific approach to auditing that the Commission has engaged in for many years. Regular audits of particular employers will continue to be conducted, as needed.
Why the Commission introduced a new type of employment equity audit?
The Commission has conducted employer-specific audits of for many years, representing 90% of employees covered by the Act. The Commission learned that employers could be compliant with the law even if one or more groups were under-represented audit after audit. For example, the Commission observed slight overall progress for Indigenous people and no progress for persons with disabilities.
Assessing employers’ compliance with the nine requirements of the Act is an important part of the Commission’s mandate. However, over the years we realized that it did not adequately promote the elimination of persistent gaps in representation. As well, many employers said that the Commission should publish parts of the audits’ findings in order to share trends, barriers and potential best practices.
The purpose of a horizontal audit?
In addition to assessing compliance with the Act, the purpose of an Horizontal EE audit is to:
- To identify persistent representation gaps for a designated group in particular sectors;
- Ensure employers have adequate plans to correct under-representation;
- Identify specific barriers that impede progress; and
- Gather and share best practices and proven special measures that increase representation and help retention of employees.
How does the Commission decide what types of horizontal audits to conduct?
The Commission decides whether and which horizontal audits to conduct based on a number of factors, including:
- the representation gap within a sector
- the magnitude of the gap and whether it has existed for many years without progress
- the number and types of employment barriers identified during previous Employer-specific EE audits
- a review and analysis of the annual EE reports submitted by employers to the Labour Program of Employment and Social Development Canada (ESDC)
- legislative context
- government priorities
- Commission priorities
- Information about the labour force
What is the process?
A horizontal audit has two stages. In stage one a survey is sent to all employers in a sector. Survey questions are arranged into themes, such as:
- Knowing your workforce
- Understanding employment barriers
- Addressing employment barriers
- Encouraging representation of designated group members in leadership positions
- Positive practices to promote adequate representation and support your EE plan
- Accessibility and accommodation
- Accountability and monitoring
Employers must complete and return the survey and also provide numerical data about the representation levels of designated group members in their organization.
Using the information collected, the Commission then selects a smaller group of employers to proceed to a full compliance audit. The employers selected for stage two of the audit are sent a Document Submission Index (the Index). Using the Index, employers must provide information and documentary evidence related to lines of enquiry, such as:
- Supporting you employment equity program
- Understanding employment barriers for racialized people
- Improving representation of racialized persons
- Improving racial diversity in management
- Ensuring accountability for employment equity
Interviews are then conducted with employees to validate the Commission’s initial findings.
The Commission then prepares a confidential Audit Report for the employers who proceeded to stage two. The Report provides a summary of findings related to (1) the adequacy of representation of the particular designated group being assessed; and (2) whether the organization’s policies, operations and special initiatives are compliant with the Act. If they are not compliant, the Audit Report will include a Management Action Plan (MAP). A MAP is a list of items that require remedial action(s), with deadlines. Commission auditors will assist and advise employers on how to implement remedial actions. Employers are required to submit evidence to demonstrate that remedial actions have been completed
Horizontal Audit Final Report
At the completion of a horizontal audit, the Commission publishes a report that includes a summary of common barriers to equal employment, and best practices and proven special measures to increase representation. In this way, the Commission hopes to encourage systemic change for the benefit of all the four designated groups. We expect that many of the findings from these audits will be relevant not only to the particular industries audited, but more generally.
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