We’ve talked before about how speak-up culture is on the rise; 6,000 more anonymous hotline reports were filed in 2023 than 2022, according to the respondent of Mitratech’s 2024 State of Ethics Reporting Hotlines.
But beyond a spike in activity, hotline reporting and resources look a bit different all across the world. Hotlines in Canada, for example, have distinct regulatory environments, scope, retaliation protections, and legal framework than those in the United States.
The Whistleblower Act is a legislative framework designed to protect individuals who report misconduct, fraud, or illegal activities within an organization. The specifics of the Act can vary by country, but the primary goals are to encourage reporting of unethical behavior and to protect whistleblowers from retaliation. Here is an overview of whistleblower protection acts in Canada and the United States, including how and where they differ.
Enacted in 2007, the Public Servants Disclosure Protection Act (PSDPA) in Canada was designed to encourage employees in the public sector to report wrongdoing (eg. law violations, gross mismanagement, misuse of public funds) etc. while protecting whistleblowers from any form of retaliation, such as dismissal, demotion, or harassment by ensuring the confidentiality of their identity. The law applies to federal public servants, including government departments and certain Crown corporations.
Enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures and financial reporting, Sarbanes-Oxley Act (SOX) applies to all publicly traded companies and their subsidiaries and protects employees who report fraud or violations of SEC regulations from retaliation in a similar way.
The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in 2010 to help promote financial stability and protect consumers from abusive financial services practices by offering Whistleblower Rewards, or incentives for whistleblowers to report securities violations. Like all of its complimentary regulations, the Dodd Frank Wall Street Reform Act offers strong anti-retaliation protections, allowing whistleblowers to sue for reinstatement, back pay, and damages.
The main differences between hotlines and whistleblowing policies in Canada and the US can be summarized across four categories:
Canada: Protections against retaliation are provided under the PSDPA for public sector employees, with remedies including reinstatement and compensation. Provincial laws may offer varying levels of protection for private sector employees, but these are generally seen as less comprehensive compared to the US.
US: Strong protections against retaliation are mandated by laws such as SOX and the Whistleblower Protection Act. Employees who face retaliation can seek remedies including reinstatement, back pay, and compensatory damages. The burden of proof often lies with the employer to demonstrate that adverse actions were not retaliatory.
US: The Dodd-Frank Act provides significant financial incentives for whistleblowers who report violations that lead to successful enforcement actions, encouraging a higher volume of whistleblower reports.
Canada: There are generally no financial incentives for whistleblowers under federal or provincial laws. The focus is more on protection and remediation rather than financial rewards, which can result in fewer whistleblower reports compared to the US.
Whistleblower protection acts are essential for promoting ethical behavior and accountability within organizations, providing a safe avenue for individuals to report misconduct without fear of retaliation. Hotlines and Whistleblower Acts in Canada in particular are shaping corporate culture by:
And yet, challenges still remain in awareness and education (like ensuring that employees are aware of their rights and protections under the Act), confidentiality concerns, retaliation risks, and effectiveness of enforcement.
Companies can take the first step towards supporting a stronger speak-up, listen-up culture by evaluating their hotline and training resources.
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