If you are an employer in Quebec and your payroll is greater than $ 2 million, you have obligations to train your employees. The Working Skills Act governs these, more often referred to as the 1% Training Law. The aim of this law is “to improve the qualification and skills of the workforce and promote employment, adaptation and professional integration, as well as the mobility of workers.”
It is the employer’s responsibility to ensure compliance with regulations and demonstrate them to Quebec’s Government. It is also important to clarify one point: To be eligible, the expenses must directly benefit employees’ skills development and not the company’s performance. Here’s how to do it while avoiding missteps.
Concretely, what are your obligations under the Skills Act?
- You must invest the equivalent of 1% of your payroll in training activities aimed at developing skills;
- You must declare these amounts to the Agence du Revenu du Québec.
Simple? Pretty much, yes. It would be best if you did the math. For example, if your payroll is exactly $ 2,000,000, you will need to invest the equivalent of $ 20,000 in training. But that’s not all…
There is an exception that allows you to be exempted from the Act for 3 consecutive years. If you can prove that you structure your training activities in consultation with your employees, you could obtain a training initiatives quality certificate, which gives the right to a 3-year exemption. You must submit this request to the Commission des Partenaires du marché du travail.
Which expenses are eligible?
A wide variety of training activities are eligible and considered to contribute to skills development. You are free to choose what suits you best, as long as the activity is about developing the skills, qualifying or recognizing the skills required for a given objective. Among the training activities generally eligible are the following:
- External training
- Reimbursement of tuition fees
- Internal training
- Mentoring/coaching fees
- E-learning
- Conferences or other similar events
- Prior learning assessment or recognition activities
- Travel expenses
- Equipment rental costs
- The purchase of educational material
- Costs related to a training platform
Note that several elements will be taken into account in addition to the type of training offered. The certification of the trainer, the direct link between the training and the position held by the employee, and the inclusion in the company’s training plan are examples of criteria to be taken into account as well.
Document your activities well
It is important to properly document your training expenses because this step is more complex than carrying out your usual expense accounts. First, you need to write a clear internal training plan for each job title in your company. To do this, it is recommended to set up an internal training committee. You can also include the time spent on developing this documentation in the expenses associated with the training.
Several details must absolutely appear on the training plan, such as the detail of the training activity, the duration of said activity, the trainers or speakers, the price, how this activity corresponds to the overall training plan set up by managers of the organization, etc.
You will then have to produce a comprehensive report in the first months of the following year to justify your compliance with the Act. Once the entire process has been completed, you must keep all documentation for a period of 6 years following the end of the calendar year.
What you need to remember is to archive as much documentation as possible in order to avoid having to pay these duplicate amounts, because it does indeed happen!
What happens if the 1% is not invested in training?
If you do not comply with the amounts dictated by law, you will have to pay that amount in the form of tax to the government without receiving anything in return. The government will then use it to subsidize the training of other eligible businesses.
In Short, Prepare Yourself Well
You’ll surely agree with us; it’s better to invest this amount in your business development than to pay it to the government. The training possibilities are varied and range from conferences to joining an online training platform like Tuto’s. In addition, it’s a great way to benefit from the full potential of your employees and ensure better retention of already recruited talent.
Should you have any questions, several experts specialize in this field, and some websites make it easier to record and calculate expenses related to the Working Skills Act. When searching online, refer to the Commission des Partenaires du marché du travail, responsible for receiving and processing all official documents related to this Act.
Contact us without hesitation if you want to know how a platform like Tuto can be part of the 1% and help you achieve your goals.
