Whether you’re expanding your business operations across the border or just employ Canadian workers for their specialized skills, you must manage Canadian employees properly—this means complying with Canadian health and safety regulations and labour laws while handling the day-to-date human resources responsibilities, such as onboarding, termination, contract negotiations, benefits administration, and more. There will be both big and small differences in legislature. And the small differences can be easy to overlook. The fact is you cannot manage Canadian employees in the same way you manage your American workers. You need to do so while following different standards and procedures.
To manage Canadian employees, you have three options: do it on your own, outsource the responsibility to a back office service provider, or engage an employer of record. Below, we detail the three options so you can make an informed decision in order to better serve your employees across the border.
Manage Canadian Employees by Yourself
Many American companies that employ Canadian workers choose to manage them in-house. Although this is a viable option, it’s also cumbersome, complex, and time consuming to handle the responsibility on your own. When you’re thousands of miles away and don’t have the required knowledge of Canadian labour laws, this option becomes risky. For one, human resources issues are often better handled face to face than over Skype or email. They’ll be resolved faster and more efficiently when they’re dealt with in person.
Plus, all HR decisions need to be based on the appropriate Canadian employment regulations, protocols, and standards, or you run the risk of a bad reputation, lawsuits, fines, and penalties. There are specific laws that apply to hiring, firing, layoffs, human rights, health and safety, and everything in between in Canada. You must follow these laws to the letter. This will require extensive research on your part, especially considering the laws change often. Do you really have the time to research every decision? Can you risk the consequences of non-compliance? If this option seems too risky, you have two others to consider.
Outsourcing HR to a Back Office Service Provider
Many foreign companies falsely believe that back office service provider only offer one service: payroll processing. Many providers actually offer HR assistance as well. In fact, they offer comprehensive approaches to human resources. They take over all of the paperwork, provide legal guidance, recommendations, and advice, and most importantly, ensure compliance. You can mitigate risks associated with managing your Canadian workers when you outsource to a back office service provider.
Engage an EOR
An employer of record (EOR) will take over your HR responsibilities much like a back office service provider would. The difference with this option is that engaging an EOR means you’re setting up an opportunity for co-employment. Though your Canadian employees will still do the work they normally do for you, your EOR will be their legal employer in the eyes of the government. This largely reduces much of the responsibility and risk associated with managing your Canadian workers when it comes to legal issues, insurance, and payroll processing.
Let the Professionals Handle Your HR Work
In order to manage Canadian employees legally, ethically, and properly, you must ensure that your American company always follows Canadian labour laws. You can do so on your own, but it’s going to be time consuming, overwhelming, and risky.
Or, you can outsource your company’s HR responsibilities to a back officer service provider or an employer of record. Both of these options will be more cost effective, save you time, and ensure that you’re always in compliance. If you’re not well versed in Canadian human resource management, you should seek the help of professionals who are. Back officer service providers and employers of record have HR specialists and legal experts on staff to serve your American company.