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5 HR Compliance Mistakes International Businesses Make When Expanding into Canada

Posted by Corinne Camara

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Feb 18, 2019 9:00:00 AM

5_HR_Compliance_Mistakes_International_Businesses_Make_When_Expanding_into_CanadaTaking part in an international expansion is an exciting time. It can also be a stressful time. Once the initial excitement has died down, you might encounter mounting challenges.

12 Things an American Company Looking to Pay a Worker In Canada Needs to Know

This is often the case when a business enters the Canadian market for the first time. Even with the most careful research, most businesses still make a few missteps. Many of these fumbles occur in HR compliance.

HR compliance is crucial, but it’s sometimes overlooked. HR rules can be complex and often confusing.

Here are a few of the most common HR compliance mistakes international businesses make when they expand to Canada. Knowing about them beforehand can help you avoid them.


1. Not Knowing about Mandated Leaves

Canadian labour law is evolving rapidly. Many provinces have introduced significant updates in the last few years. One of the areas that has undergone change is employee leaves. In many provinces, employees are now entitled to more paid and unpaid leave for a wider variety of reasons.

You must pay careful attention to how many days of leave employees are entitled to for things like bereavement, loss of a child, and personal emergencies. These rules vary from province to province, so you need to research the standards based on your location.


2. Confusion over Public Holidays

Holidays are another common point of confusion for employers just entering Canada. As with leaves, there are provincial variations. The federal government does set out a schedule of holidays. For the most part, provinces follow them, but not every province mandates Boxing Day, for example.

The provinces are also free to set their own holidays, so you may be surprised to find Quebec has a few more holidays than Alberta or Ontario. Be sure to pay careful attention to the holiday schedule and determine which are statutory in nature.


3. Overtime Rules Get Complicated Quickly

A very common HR compliance stumbling block for international employers is overtime pay for Canadian employees. Again, the rules change based on the province, and sometimes from industry to industry.

As a general rule of thumb, employees can work 40 hours per week before they’ll need to be paid overtime. Shift lengths may also matter. If an employee works more than eight hours in a day, overtime may kick in.

As noted, however, this changes with the industry. In saw mills, for example, the work week may be 44 hours or more before overtime applies. Some provinces also make it possible for employers to offer lieu time instead of overtime pay.

It’s easy to see how someone unfamiliar with the rules could struggle. Consider working with a professional employer organization (PEO) for assistance.


4. Termination and Severance Pay Rules Are Different

This is an especially tricky point for American businesses, because the rules around termination and severance pay are vastly different in Canada.

In Canada, at-will employment doesn’t exist. Employees must be given proper notice of termination. The length of notice depends on the employee’s length of service. If the employer can’t provide proper notice, then they may need to offer severance pay in compensation.


5. Payroll and Benefits

When expanding internationally, employers often get stuck on payroll and benefits as well.You determined the holidays but are unsure of how to calculate vacation pay. What with holdings are required to satisfy the requirements of Employment Insurance and the Canadian Pension Plan?

You may also run into rules governing what you can and can’t do. For example, you can’t take the cost of a dine-and-dash out of a server’s pay in most provinces.

If you’re unfamiliar with the rules, the best thing you can do is get help from the experts. A PEO can identify where you need to adjust your policies to become compliant, and they can help you do just that.

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

Topics: Business Expansion

Corinne Camara

Corinne Camara, an expert in the recruitment field with over 10 years of experience in the staffing industry, is a business development specialist at The Staffing Edge. She previously worked at Apple One as a recruitment specialist and needed a change from the day-to-day recruiting, but still wanted to remain in the industry. Corinne’s knowledge and expertise gives her an edge in helping new members understand the back office model. Corinne has the unique ability to relate to current and new members; she understands their business and day-to-day struggles. She feels rewarded when she helps onboard a new member to outsource the worry and help them see their profits grow. Outside of work, Corinne enjoys spending time with her children, home improvement projects, interior design, and painting.
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