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Canadian vs US Employment Laws: What International Employers Need to Know

Posted by Karen McMullen

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Jun 5, 2019 9:00:00 AM

foreign-vs-us-employment-laws-what-international-employers-need-to-knowInternational employment laws pose a challenge for almost any employer who looks to move beyond their national borders. For American companies moving to Canada, the differences between US employment laws and the rules in the new market can be confusing. Similarly, Canadian employers may have plenty of questions about the US laws.

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If you’re crossing the Canada–US border in any capacity, here are some of the most pertinent points you’ll want to keep in mind.

US Employment Laws and Human Rights

One of the biggest points of departure between Canadian and US employment laws is around human rights.

In Canada, the federal Charter of Rights and Freedoms grants Canadians the right to live free of discrimination. The Charter outlines many prohibited grounds of discrimination, such as gender, race, sexual orientation, age, and more. In some cases, Canadian courts have added prohibited grounds to the Charter by “reading in.”

The provinces have also created human rights legislation, which sometimes goes further than the federal Charter. Most provinces use this legislation to help protect Canadian workers and end discrimination in employment.

One example demonstrates how this can impact international employers. Some interview questions, such as those about marital status, are considered discriminatory in most provinces. Asking about religion, family status, or health could also be considered discrimination.

Canadian employees can start proceedings against their employers by complaining to their provincial Human Rights Commission. In the US, by contrast, employees would usually sue their employer independently.

Background Checks and Drug Testing

In the US, it’s very common for employers to require a background check. Some may also require a drug test as part of the hiring process.

In Canada, these checks are rare. Much like certain interview questions, background checks and drug tests could be considered discriminatory. Drug testing is allowed very rarely, and it’s usually not worth the risk of having a Human Rights Commission investigate.

Background checks in Canada are becoming more common, especially for certain professions, such as working with children and other vulnerable persons. If an employee handles money, merchandise, or sensitive information, a background check may be recommended.

Working Hours, Breaks, and Leave Time

Other major differences between Canadian and US employment laws are around working hours, breaks, and leave.

Federal US employment laws are rather sparse on regulations for these areas. There are no maximums on the number of hours employees can work, provided they’re compensated fairly. The US is also one of just three countries that doesn’t have mandated breaks for employees.

Individual states can create their own rules, but only a handful provide paid lunch breaks. Paid leave is also at the employer’s discretion. There’s no need to provide paid vacation, for example, unless you want to.

Canada presents almost the polar opposite situation. Most provinces have legislation requiring employers to offer paid and unpaid breaks, and capping the number of hours employees can work. Most laws lay out the maximum time an employee can work without a break, maximum shift lengths, minimum time between shifts, and maximum number of hours to be worked in a week.

The Canadian provinces also include legislation for paid time off, such as mandatory vacation and paid leave.

You Must Be Compliant

In both the US and Canada, compliance is important. In Canada, however, employers may find the rules are stricter, and there are more of them. There are also more bodies dedicated to ensuring compliance.

A great example is payroll and taxation. You’ll need to keep records in Canada. Not doing so could result in a fine or even a criminal charge. You could be asked to provide evidence of record-keeping to the Canada Revenue Agency or a provincial body.

If you need help staying on top of your compliance, you’re not alone. Get in touch with a PEO. Discover how we can help.

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Topics: Compliance and Legislation

Karen McMullen

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