Law to promote the development and recognition of workforce skills

What Is the 1% Training Law ?

Also known as the "Skills Law," this legislation mandates that businesses operating in Quebec with a payroll exceeding $2 million invest at least 1% of it in employee training and skills development(Bill 90).

Who Does It Apply To?        

• Applies To: Any business in Quebec across all industries with a payroll above $2 million.
• Objective: To enhance the skills and qualifications of the workforce, facilitating better job retention, employability, and professional mobility.

Why Was It Implemented?        

• Economic Shifts: Supporting the transition from traditional manufacturing to knowledge-based industries and stimulate economic growth and competitiveness within the province .
• Global Competitiveness: Ensuring Quebec businesses remain competitive globally through enhanced workforce skills.
• Labor Market Needs: Addressing challenges such as an aging workforce, integration of immigrants, and youth unemployment.
• Continuous Improvement: Promoting lifelong learning and professional development.
• Enhance productivity: Improved skills lead to more efficient work processes, better problem-solving capabilities, and increased innovation. As employees become more adept and knowledgeable, they can perform their tasks more effectively, contributing to the overall productivity of their organizations.

When was this implemented ?        

In 1998, the Government of Quebec enacted the Loi sur les compétences, commonly referred to as the 1% Training Law. This legislation mandated that companies invest in the development of their workforce to foster the acquisition of new competencies and abilities.

The Working Skills Act         

This act is a provincial law in Quebec that outlines the guidelines for developing, recognizing, and certifying job skills. Its goal is to make sure that Quebec workers have the skills required by the job market. The law also details the responsibilities of employers, workers, and educational institutions in enhancing and acknowledging these skills. The Act is managed by the Ministère de l’Emploi et de la Solidarité sociale.

Key Goals of the Law        

• Continuous Improvement: Improve qualifications and skills throughout an employee's professional life.
• Inclusive Growth: Support the integration, retention, and mobility of workers.
• Collaborative Efforts: Encourage investments in training by employers and government, and foster collaboration among employers, unions, community groups, and educational institutions.

Obligation to Invest in Skills Development        

• Mandatory Investment: Dedicate at least 1% of payroll to training.
• Declaration Required: Annually declare training expenses to Revenu Québec and provide information to the Labor Market Partners Commission.

Eligible Training Activities and expenses         

• Versatile Formats: Includes classroom training, on-the-job training, conferences, and online courses.
• Recognized Providers: Training must be delivered by accredited educational bodies or recognized trainers.
• Company Training Plan: Must be part of an organized training plan with specific learning objectives.

Eligible Expenses:

• Comprehensive Coverage: Expenses can include costs related to staff or interns’ training without needing prior approval.
• Documentation: Keep thorough records of all training expenses for declaration purposes.

Exemption Opportunity        

Quality Certificate: Businesses with exemplary training practices can apply for a quality certificate, exempting them from the standard requirements for three years.

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Action Steps for Employers        

1. Assess Your Payroll: Determine if your payroll exceeds $2 million CAD.
2. Plan Your Training: Strategically plan training activities that align with business needs and comply with the law.
3. Report Annually: File a declaration of participation with Quebec's revenue agency.

Consequences of Non-Compliance         

If a company's eligible training expenses are less than 1% of its total payroll, or if there are no eligible expenses, the company must pay the difference into the Workforce Skills Development and Recognition Fund (WSDRF). This payment represents the difference between 1% of the total payroll and the actual training expenditures . Click here for more details.

Example of Effective Implementation: TechCentral Inc.        

Company Background: TechCentral Inc., a mid-sized software development company based in Montreal, has a payroll of $3 million and specializes in creating innovative solutions for healthcare providers.

Implementation of the 1% Training Law:

• Annual Training Budget: TechCentral dedicates $30,000 annually (1% of its payroll) towards training.
• Training Programs: The company focuses on up-to-date technologies and leadership development. Training sessions are conducted both in-house and through partnerships with tech conferences and local universities.
• Employee Development: Employees are encouraged to take courses that lead to certifications in programming languages, project management, and data security.
• Tracking and Reporting: TechCentral uses a sophisticated LMS (Learning Management System) to track employee participation and progress. Annually, the company submits a detailed report of training expenses and activities to Revenu Québec and the Labor Market Partners Commission.

Results:

• Employee Retention and Satisfaction: Since implementing structured training programs, TechCentral has seen a 25% increase in employee retention and a significant boost in job satisfaction ratings.
• Innovation and Performance: Continuous training has enabled employees to stay ahead of industry trends, contributing to a 15% year-over-year growth in productivity and innovation.

Similar Laws Elsewhere?        

While specific "1% Training Laws" are unique to Quebec, several European countries have similar frameworks mandating investment in employee training. However, no other Canadian province or U.S. state currently has a law exactly like Quebec's, although many promote workforce development through various incentives and programs.

Let’s Discuss!        

• How does your organization approach mandatory training investments?
• Could similar laws benefit other regions in North America?

Interesting, isn't it?

??I hope this article sheds some light on Quebec's unique training law.

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Manju Boopathiraj

(HR Professional)