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Here Are the Best Ways to Find a Reputable Canadian PEO

Posted by Anna Mastrandrea


Jun 26, 2017 9:00:00 AM

Here Are the Best Ways to Find a Reputable Canadian PEO--.jpgNo matter where your business is located in the world, if you’re hiring Canadian employees you need to abide by Canadian employment laws. As daunting as that sounds, unfamiliarity with jurisdictional payroll and employee management differences should never hold you back from expanding your services into Canada. Although your business may not have the knowledge background to effectively manage Canadian employees, there are partnership options available to you that could greatly improve your business. 

A professional employment organization (PEO) is a great option for anyone looking to run operations in Canada. A Canadian PEO allows you to establish a valuable partnership that can provide both you and your employees with industry expertise and advice. While slightly different from an employer of record, a Canadian PEO can help you with:

  1. government compliance;
  2. HR management;
  3. payroll services;
  4. benefits administration;
  5. sourcing and recruiting potential candidates; and
  6. training and development.

If your company could benefit from a Canadian PEO, you’ll need to find the right option for you. Here’s how to find a reputable PEO in Canada.

Download our free guide on what US companies need to know about paying  employees in Canada.

Trust Experience

First and foremost, you want to use a PEO that has experience in your field. A Canadian PEO that has been in business for a significant amount of time has extremely valuable industry experience under their belt. They’ve been through all the trials and tribulations of the industry, and have emerged with essential insight concerning everything there is to know about Canadian payroll regulations and compliance.  

Services Offered

The services a Canadian PEO offers will direct impact whether they’re applicable to your current situation and needs. You want to make sure your PEO offers the widest variety of services to get more bang for your buck.

Knowledge Level

Knowledge is essential when it comes to the staffing industry, as there are many legal regulations that must be followed. A company that knows how to properly conduct themselves under these regulations, and knows staffing law like the back of their hand is an organization you want to trust.

While current industry standards are important to know, the staffing industry is forever evolving. Knowledge isn’t just about what a Canadian PEO knows about the current industry, but how they stay up-to-date on future changes. A reputable PEO will keep you informed and let you know what developments are essential for your business.

Various industry certifications can also be very insightful into the knowledge level of a PEO. Seeing what education and additional certification courses they have taken shows you that they are eager to expand their knowledge of the Canadian employment industry.

Make sure to ask PEOs that you’re considering lots of questions to determine their knowledge level and ensure that they are equipped to handle your company’s size and objectives.

Previous Partnerships

What other people say about a company speaks volumes about their services. It’s important for a PEO to have extremely advanced customer service skills, as they will potentially be handling your future employees. How they manage their previous clients gives insight into their customer service skills, along with what you can expect as a client.  

You need to also make sure that you do your research. You would never buy something before researching it online: the same should be said for a PEO. Take a moment to analyze their digital presence. You can check out their website and look for any additional online reviews you can find.

If a Canadian PEO has a bad reputation, you need to ask yourself if you really want to associate your company with this organization. To avoid the potential of future problems with your PEO, look for companies with stellar references and recommendations. It’ll lead to an overall happier and healthier partnership.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: Professional Employer Organization

Answering the Question: Can a US Employer Hire Canadian Employees?

Posted by Corinne Camara


Jun 23, 2017 9:00:00 AM

Answering the Question Can a US Employer Hire Canadian Employees--.jpgPicture this, you’ve just been offered an amazing business venture in Canada. The offer is a great opportunity to generate revenue for your business and establish meaningful relationships with Canadian clients. One problem, your company is located in the United States and you don’t currently have an employment presence in Canada. What do you do? Can you even do this—can a US employer hire Canadian employees?

Many businesses face this challenge regularly, but the answer is actually more simple than you might think. The question, can a US employer hire Canadian employees can be answered with a simple yes… with some restrictions. To make sure you’re conducting business correctly in Canada, you’ll need to approach the employment and payroll process in the proper manner.

Download our free guide on what US companies need to know about paying  employees in Canada.

Know the CRA Regulations

The Canadian Revenue Agency is the Canadian equivalent of the IRS. This bureau oversees all taxes relating to payroll and withholdings. Perhaps their most relevant regulation applicable to your situation is employee misclassification.

Many businesses try to get around paying for Employment Insurance and other deductibles by classifying employees as independent contractors. There’s a great difference between employees and independent contractors under federal law, and if you’re caught by the CRA misclassifying your Canadian employees, this can have serious repercussions.

As an American business, you will still be liable for serious fines and potentially a criminal sentence from the CRA. It won’t just be you getting into trouble, but also your Canadian employee. They will have to pay out of pocket expenses and penalties, which will seriously harm the relationship between the two of you.

Employee misclassification is too risky. There are many other ways to employ Canadians without breaking the law. 

Independent Contractors

While classifying employees as independent contractors can be dangerous, actual independent contractors can be great for your business. You won’t have to worry about paying any Canadian employment taxes, and the job will still get done by the contractor or contractors of your choosing.

While the idea of an independent contractor sounds great, many employers don’t go this route because they like to exercise their control. With an independent contractor, you have to be willing to step back from the project and let them do their work on their own schedule with their own materials. Your control will have to be limited or you risk venturing into employee territory.

If you’re able to step back from the project and let your independent contractor take the reins, they are a great option for international companies looking to get work in Canada. If you don’t think this is feasible for your company, hiring a Canadian Employer of Record is the next best thing.

Employers of Record        

Most American companies that get work in Canada don’t actually want to set up a physical presence in the country. That means if they’re not hiring people as independent contractors, they’re better off hiring someone in Canada to do their taxes and payroll for them.

This is where a Canadian employer of record can come in very useful. When you hire an employer of record, you hire a temporary legal employer to conduct your human resources and payroll services. An employer of record will help your company abide by all Canadian legalities and teach you everything you need to know about Canadian payroll regulations.

How can a US employer hire Canadian employees through an employer of record? It’s simple really. First you’ll need to find a reliable employer of record to help provide you with payroll and back office solutions. Once you’ve found the right fit, your employer of record takes over from there. They manage all payroll, support, clearances, screenings and compliance services. It’s that easy.

Get started today and see how an employer of record can change your over-the-border business ventures for the best.

What US Companies Need to Know about Paying Employees in Canada

Topics: Business Expansion

7 Ways to Achieve Better Payroll Efficiency

Posted by Karen McMullen


Jun 21, 2017 9:00:00 AM

7 Ways to Achieve Better Payroll Efficiency--.jpgBusiness owners have a lot on their plate. They’re managing employees and tracking business goals, all while handling any curve balls that come their way. Owners want to spend as much time as possible on their principle tasks, and dedicate the smallest amount of time to their administrative duties. This has never been more evident than in the payroll department, which is known to be notoriously tedious and time-consuming.

There are solutions. Below are 7 ways businesses can improve payroll efficiency.

Download our free guide on what US companies need to know about paying  employees in Canada.

1. Get Your Employees Involved

Staff can offer valuable opinions and new ideas to improve payroll efficiency. Communication with employees pinpoints areas of confusion to specifically outline where improvement is needed. Ask for feedback, weak spots, and areas that are working. Consider training employees in different aspects of payroll and administering minor responsibilities that are easy to do, and ease the burden on the payroll department.

Payroll directly effects everybody in the company. When the whole team has a say in the process, it’s easier to know how to enhance payroll efficiency.

2. Software

Payroll software works wonders by automating the repetitive tasks so it’s easier to calculate wages. A software platform means less time spent on manual data entry, and less chance of error from hand calculations. Businesses can even use the payroll software concurrently used with other relevant office programs and integrate a less complicated technological solution. Adding payroll technology eases the process of entering hours, benefits, tax deductions, and other matters in this department.

3. Hire A Payroll Clerk

Employ an in-house bookkeeper trained to handle any emergencies, questions, and other issues that arise. Duties in that department won’t have to be divided among staff with a payroll clerk managing it. Companies’ payroll efficiency increases with a knowledgeable expert who understands compliance, calculations, deductions, and anything else thrown their way.

4. Simple Policies

Miscommunication happens easily with hard-to-read policies. When the rules regarding submitting timesheets, expenses, and claiming vacation pay aren’t clearly outlined, more time will be spent cleaning up errors that could’ve been avoided in the first place. Transparent, easy to understand policies won’t have staff confused about how their pay is determined.

Don’t assume all employees know the ins and outs of payroll. A straightforward policy outlining responsibilities for pay, vacation earnings, classification, and the process itself, will have everyone on the same page.

5. Classification

If employees are misclassified, the wrong taxes are deducted, the wrong salaries paid, and the incorrect benefits or expenses are distributed. Employers will then be stuck fixing these errors and readjusting salaries.

On top of these problems in-house, it causes problems with the Canada Revenue Agency (CRA). The CRA doesn’t take worker classification lightly, and errors here result in fines and penalties. Business owners do not want to be responsible for back wages, so ensure employees are labeled correctly at the start.

6. Know the Rules

Payroll compliance is complex and includes a lot of information, which needs to be clearly and fully understood to distribute wages and deduct taxes correctly. On top of comprehending legislation, business owners need to be aware of its amendments, alterations, and new ones created. It’s vital to keep up with to ensure it’s handled properly.

Noncompliance is an even bigger headache. While it’s a pain and time-consuming, it’s worth it for payroll efficiency. The CRA is strict about following government regulations. Employers need to be aware of all their obligations to ensure compliance.

7. Outsource

There’s no need to struggle through it alone with trained professionals willing and available to handle this process for you. Outsourcing to a payroll provider provides business’ relief and eases the burden of payroll duties as related to compliance, regulatory agencies, and other aspects. Outsourcing provides peace of mind for companies knowing experts have this department under control.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

5 Ways an Employer of Record Can Contribute to Business Growth

Posted by Stacey Duggan


Jun 19, 2017 9:00:00 AM

5 Ways an Employer of Record Can Contribute to Business Growth--.jpgBusinesses are always looking for ways to expand their business, through work practices, company brand, and increasing the number of staff employed. With expansion comes a number of other burdens, particularly in the administrative field. These very quickly take up time alongside growth of the business itself.

There’s a solution that makes it easy. An employer of record (EOR) can help with business growth in five different ways. Keep reading to learn how.

Download our free guide on what US companies need to know about paying  employees in Canada.

1. Long-Term Savings

An employer of record handles a wide variety of issues and matters for a cost that’s less expensive than it is to manage in-house. As EORs help many clients, businesses are essentially sharing these resources through the EOR, generating savings from software updates, HR training, and time dedicated to understand workforce compliance.

Hiring new employees, for example, is a good sign, but with it comes more paperwork and additional time to manage them. It means legal and regulatory changes, ongoing training regarding HR, adding to payroll, and other employee training regarding health and safety, workplace management.

Ensuring HR and payroll is in line with government standards is a time-consuming that takes time away from core tasks. EORs stay on top of these duties, allowing employers to use that time growing their business.

2. Added Value to Hiring and Staff Management

A growing business includes an increase to the number of staff employed. As a co-employer, an employer of record will hire and manage staff on behalf of the company. For businesses venturing into new markets, EORs understand the process in place to ensure correct hiring.

They’ll handle the interview process and training, to guarantee new hires meet the specific qualities sought by employers. Providing EORs this kind of pre-determined outline ensures the best fit and staff for a company to continue to grow with the necessary support and resources.

3. Avoid Mistakes

Mistakes have serious consequences with the Canada Revenue Agency, other government bodies, and generally cause an overall headache for businesses. An EOR makes sure a business’ payroll and deductions are error-free to avoid fines, penalties, and lawsuits.

With an EOR handling payroll, compliance, and related matters, they’ll ensure employees are classified as they should be, the business is in line with provincial and federal workplace standards, and all other necessary requirements are met. This keeps businesses on the government’s good side, and employees happy.

4. They Provide the Right Tools

Software eases business growth and expansion. It’s also expensive and requires constant updates. Working with an EOR means there’s no need to worry about forgetting to update software or searching for the right kind because they maintain the different platforms in order to do their job effectively.

EORs are experts trained in HR and payroll to make implementing easy as businesses grow. They have knowledgeable associates and offer additional perks, such as group benefits and discount insurance rates, which employers–particularly for small businesses, don’t always have access to alone. EORs provide support to deal with all kinds of situations and answers to any questions there might be.

Whether it’s a company with a small client base and limited staff, or a bigger company entering new territory, EORs cover many aspects so businesses don’t have to worry about remembering to keep up with software or ensuring access to appropriate benefits.

5. Peripherals Managed

With the time-consuming and tedious tasks covered, businesses can get back to focusing on strategy, marketing, and overall growth. It’s hard to manage core tasks when administrative tasks are taking up a significant part of the day.

Tax, payroll, labour, and employment are covered by professionals with the knowledge and time to research and understand these matters. When employees stay focused on core tasks and an employer of record handles the rest, businesses can ensure the best competencies are in place for business practice and expansion.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: Employer of Record

5 Tips for Higher Employee Retention Rates

Posted by Corinne Camara


Jun 16, 2017 12:00:00 AM

5 Tips for Higher Employee Retention Rates--.jpgWhen it comes to your company's growth, employee retention pays off. By keeping your current employees as long as possible, you will always have highly experienced people on staff. It will also make its mark financially, as $11 billion is lost to employee turnover every year. Keeping your employees on staff starts with their happiness and engagement. To encourage this attitude in your company, and to increase your retention rates, follow these simple tips. 

Encourage Development

By providing constant training, seminars, and workshops, you are making an investment in your employee's careers. They will not only appreciate this effort, but will likely also show improved job performance.

Listen Well

Reach out to your employees for feedback and actually listen. Ask them what they expect from their full-time employee benefits program, company training, and culture. Notice what points are coming up multiple times and look into making those changes.

Offer Quality Benefits

Whether you provide group insurance or individual benefits, be sure to offer your employees a wide range of benefits. They all have different needs, so they will appreciate it if you recognize that within the full-time employee benefits program.

Foster Work-Life Balance

Remember that your employees have a life outside of work. Make sure that your company schedule, culture, and benefits are catering to that. Overworked employees are not happy employees. This is another great opportunity to communicate with your employees, asking them what else they expect.

Invest in Company Culture

Your employees should be happy at work. Encourage your entire staff to participate in crafting a company culture. This will bring your employees closer together and offer a benefit for coming to work.

The Bottom Line on Results

Improving employee retention takes time, so do not expect results immediately. As you build your employee engagement and happiness, be sure to include their honest thoughts in the process.

Employees on all levels of your organization will likely have opinions, so instruct supervisors on how to best listen to their employees. Remember to access how your retention effort is going through data collection, both quantitative and qualitative. This way, you can measure which efforts are working and where you can improve. 

7 Signs It's Time to Outsource Payroll

Topics: human resources

How to Make Sure Your Payroll Outsourcing is Successful

Posted by Karen McMullen


Jun 14, 2017 9:00:00 AM

How to Make Sure Your Payroll Outsourcing is Successful---1.jpgEspecially for businesses employing citizens of other countries, outsource payroll processing and hr management is a smart idea. By outsourcing this tricky task, you are ensuring that your company is complying with all foreign payroll tax rates and other regulations. Follow these tips to make sure that your outsourced HR and payroll service is running smoothly.

Communicate Frequently

Be sure to stay in contact with your payroll provider on a regular basis. This will ensure that you are both informed on any changes or mistakes that need to be addressed. By establishing a professional relationship early on, you are holding each other accountable to best practices.

Hire An In-House Expert

Designate an employee in your local office to be the point person on outsource payroll processing and HR management. This employee will be in charge of understanding all regulations and laws for managing international employees.

Know Labour Laws

When employing people in other countries, be sure to understand their local labor laws. You will need to follow different standards than you do for your local employees. Check in with your outsourced HR specialists, as well as the employees themselves, to make sure that you are complying.

Keep Employees Informed

When expanding your business into another country, be sure to keep your in-house employees in the know. These changes may or not affect them, but this open communication and transparency is part of best management practices regardless. For your international employees, get to know them and inform them that you are outsourcing their payroll.

Ask Questions

Hiring internationally can be complicated, so don't be afraid to ask your payroll and HR company plenty of questions. They are the professionals, so they will have the answers to clear up your doubts.

Don’t Risk It

By following the above tips, you can make sure that your outsourced payroll is running efficiently and without oversight. If any problems do arise, be sure to communicate with the payroll and HR company immediately. They are there to assist you and ensure that all issues are resolved.

Many U.S. companies hesitate to expand into Canada because of the different rules and jurisdictions between the two countries. Here at The Payroll Edge, we are available to assist you with hiring and paying your Canadian employees. Contact us today to learn how we can work with you. 

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Small Business Lending is Rising in Canada

Posted by Shannon Dowdall


Jun 12, 2017 9:00:00 AM

Small Business Lending is Rising in Canada--.jpgFollowing the U.S. election, there is a large amount of uncertainty regarding the Canadian economic climate. Due to the strong ties between the U.S. and Canada, it's certain that there will be some changes regarding trade under the Trump administration.

While many Canadian economists and public policy experts have expressed concern for the next four years, data shows that following the election, small business lending in Canada actually rose.

During the month of October, the PayNet Canadian Small Business Lending Index rose from 116.5 to 119.9, and lending for mid-sized companies rose from 211.3 to 218.3.

Expectations of Growth

Following the crash in oil price, small business lending in Canada dropped significantly. This affected the majority of 2015 and 2016, which is what made November's lending hike all the more surprising.

PayNet President Bill Phelan is also optimistic regarding the potential for small businesses, especially since they have been shown so much opportunity recently.

“Once you can stabilize the economy, you can position it for growth,” said Phelan.

CNW cites that 81% of Canadians were optimistic regarding the future of small business following the election and heading into the new year.

“Hiring, inventory, marketing, and equipment are inputs that can come up quickly,” said Gary Fearnall, the Canada Manager for OnDeck, a small business lender. “It's important to be ready to respond to new opportunities when they arise.”

That said, small and mid-sized businesses in Canada should anticipate growth this coming year and poise themselves for such.

Who Can Capitalize?

Even U.S. companies may be looking to capitalize on the rise in small businesses in Canada by hiring Canadian workers and potentially opening a Canadian branch to expand.

In order to do so, however, these businesses need to consider hiring a payroll outsourcing provider in order to comply will all of the rules and regulations regarding Canadian employment. While the U.S. and Canada share a border, they do not share labour laws, and foreign employment compliance is hugely important.

Outsource Payroll

Outsourcing payroll for small companies is especially wise considering all of the hoops that need to be jumped though to ensure proper paperwork filing. The risk of filing this paperwork incorrectly can be hugely expensive and can set any business owner back quite a bit even with just one mistake.

Payroll for small companies is what the Payroll Edge does best, so if you're looking to expand your small company knowing that there are opportunities in Canada, contact us today. 

7 Signs It's Time to Outsource Payroll

Topics: Business Expansion

Tips for Offering Health Insurance to Your Canadian Employees

Posted by Ray Gonder


Jun 9, 2017 9:00:00 AM

Tips for Offering Health Insurance to Your Canadian Employees--.jpgWith each country having a unique health system, your Canadian employees will likely require different health insurance coverage than your local employees. Even if your business is not well established in Canada, it is important to cater a coverage plan to the Canadian professionals you employ.

While there are many services to help keep you organized, such as online medical record services, be sure to follow these tips to stay even more organized when forming your benefits package.

Offer What Is Necessary

If you are an employer based in the U.S., there will be major differences between standard coverage in your country and standard coverage for Canadians. For example, in Canada, basic doctors office visits are covered, so you don't want to put money into that service if it is not necessary. Take the time to read up on these differences.

Know Tax Laws

The Canadian government will not tax the money that your employee receives from an insurance claim. This is different than in the United States, so make sure that you remember that. Deductibles and federal payroll tax deductions will all be different as well.

Understand Prescription Differences

While your health insurance plan will hopefully cover all of your employees' medications, these drugs differ between the U.S. and Canada. This is because there are different standards for drug approval in each of the governments.

In this case, be careful if any of your employees move across the border to work in either location.

Try to Offer Equal Coverage

If you can, try to keep benefit packages for all employees as uniform as possible. This will ensure that all of your employees feel equally provided for by their employer, avoiding any accusations of unfairness.

Hire An Expert

Especially for small businesses, outsourcing benefit management, payroll services, and HR to an external company allows them to channel their energy to the business itself. They will help organize online medical record services as well. By hiring a Canadian professional employer organization, you will make sure that all of your bases are covered.

Involve Everyone

When you are forming your employees benefits package, or transforming it as you establish your business in Canada, make sure that you are including your Canadian employees in the conversation. Allowing your employees to express their expectations will lead to a healthier and more engaged workforce. 

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: Health Insurance

Are You A US Company Hiring in Canada? Avoid These 5 Common Mistakes

Posted by Anna Mastrandrea


Jun 7, 2017 9:00:00 AM

Are You A US Company Hiring in Canada Avoid These 5 Common Mistakes--.jpgWhen hiring Canadian employees to work for your company based in the United States, it is important to understand the law and regulations that you must follow. Even though these people are now working for your company, they are still bound to Canadian employment laws, standards, and regulations.

Especially for things like employee payroll and taxes, you need to make sure that you are being thorough in your compliance of these rules. To ensure that you are not letting anything fall through the cracks, make sure that you are avoiding these five common mistakes.

Employee Classification

You are classifying the employee incorrectly. Many businesses think that they can avoid complying with Canadian employment standards by classifying all of their employees as contractors. The Canadian Revenue Agency, or CRA, knows that employers do this and might be suspicious if they see that all of your Canadian employees are independent contractors. If caught, you could face prosecution. It is important to classify correctly.

Legal Woes

You don't have your legal staff on board. Make sure that your company's lawyers are in the loop as you hire Canadian employees. They will be able to point out any HR or payroll mistakes you are making. This will also eliminate the need for any legal catch-up if you do get into trouble with the CRA.

Know the Terrain

You don't understand Canadian employment laws. The United States and Canada have different payroll rules and regulations, safety standards, and other laws ensuring employee rights. This means that your new Canadian employees will not fall neatly into the regulations you have for your U.S. employees. Research both national and provincial employee laws and make sure that you are complying with your employee's specific local set of rules.

International Communication

You aren't communicating with your Canadian employees. Even if you are outsourcing services to Canada, and you don't see these employees on a regular basis, make sure that you are still communicating with them regularly. Treat them as you would any other employee. This means that you should keep them updated on company news, changes to employee payroll systems, or adjustments to their benefits package.

International Communication

You aren't communicating with your Canadian employees. Even if you are outsourcing services to Canada, and you don't see these employees on a regular basis, make sure that you are still communicating with them regularly. Treat them as you would any other employee. This means that you should keep them updated on company news, changes to employee payroll systems, or adjustments to their benefits package.

Canada has over 190 requirements written into law that dictate employee payroll processing. It is in your company's best interest to be in full compliance with these laws, as taking shortcuts can leave you with high fines and other types of prosecution. 

Get in Touch

The Payroll Edge is a leading employer of record and payroll service provider. Contact us today to learn how you can best expand your business into Canada. 

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: Compliance

3 Reasons Employment Agreements Are Crucial in Canada

Posted by Corinne Camara


Jun 5, 2017 9:00:00 AM

3-Reasons-Employment-Agreements-Are-Crucial-in-Canada.jpgA binding contract between and employer and employee is a common document many businesses use. These agreements cover a number of issues regarding both parties—standard documents everyone is expected to read and sign. 

When new employees are hired, employers often use a contract to define and cement the relationship. Employment agreements are crucial in Canada. Here are three reasons why.

1. Protect the Employer

Employers need to protect themselves, and a binding contract allows that. A well-written contract should be error-free and clarify the employer’s obligations. Employers want to protect themselves in two major situations: termination and competition. 

Employers want to be sure they legally can terminate their employees, without getting caught in any legal cross-fire. With this clause clearly defined, an employer can specifically limit what the employee is entitled to claim. As long as it meets the provincial employment standards act and Canadian labour laws, employers are covered when letting go of employees.Anything below those standards though will be a problem. 

Employers also need to protect their business information and clients. Business owners don’t want employees to leave and take their clients with them. When employees move on, they also take with them a lot of knowledge and confidential information as well. This can pose potential problems when employees leavefor a competitoror think of starting their own businesses in the same field. 

Restrictive covenant clauses protect the employer’s confidential customer base and trade secrets. These clauses still have restrictions—such as time period and geography—but it givesemployers some temporary coverage. Businesses want to protect their profits and information, butanything too restrictive will be voided by the courts.

2. Clarify the Employee’sPosition

What’s important to individual employees should be clarified in the contract. Employment agreements specifically outline an employee’s obligations, and any benefits promised by the employer.Any special promises spoken should be in writing in the contract. For example, if an employer has promised a bonus at year-end, establishing this in writing will ensure it’s received as noted.

The contract will detail the agreed-upon terms. Payment policies, commission schedules, responsibilities, etc., will be outlined in the contract. As contracts are generally worded in favour of the employer, this gives new employees a chance to negotiate terms that will benefit them a bit better, and amend the contract to be less one-sided.

Post-negotiated contracts outline final terms regarding pay, job title, vacation policies, and other aspects, and they employ broader definitions of terms to get clarification. And if employees resign or are dismissed, the agreements will protect them in terms of severance packages and other things they may be entitled to.

3. Reduce Risk and Ensure Compliance

At minimum, the terms of an employment contract have to comply with the employment standards act of theapplicable province.Contracts are used to assist both parties by defining terms and responsibilities, and removing the guesswork of what will happen in possible situations. Clauses can be tailored to the needs and positions of each party. Established terms in employment agreements reduce the chance of litigation and minimize other conflicts should they arise.

Employers can face issues regarding liability, as commonly seen with reasonable notice of termination and severance pay. When terms are recorded for these situations, that written definition explicitly details what the employee can expect in this situation, as long as it still complies with the provincial act and human rights code.Employment contracts are crucial because their limitations and defined terms help reduce overall liabilities and risk.

Contracts control human resources risks, including those associated with employee conduct such as confidentiality, harassment, or conflicts of interest and risks from breakdowns. While employment agreements don’t exactly eliminate all misunderstandings between parties, they significantly help reduce them.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: Compliance

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