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Alberta Employee Vacation & Stat Holiday Entitlement

Posted by Stacey Duggan

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Sep 16, 2014 7:30:00 AM

Alberta, Canada FlagAlberta Employee Vacation & Stat Holiday Entitlement is the third post in The Payroll Edge’s series “Employee Vacation & Stat Holiday Entitlement” where we outline Canadian employment compliance standards by province to assist you in hiring a Canadian worker.

American or foreign companies paying Canadians take note:  Canadian statutory holidays are paid holidays. As a PEO in Canada, we’re often asked about whether there is stat and vacation pay differences between provinces. Every province has different holidays and qualification rules around paying the employee for the time off.   These rules apply to part time, full time, hourly or salaried employees.  

Public paid holidays and minimum vacation requirements are set out by the “Employment Standards Code of Alberta”.

There are nine public holidays in the Canadian province of Alberta:

  1. New Year’s Day on January 1st
  2. Family Day on the third Monday in February
  3. Good Friday or Easter Monday
  4. Victoria Day on the Monday preceding May 25th
  5. Canada Day on July 1st
  6. Labour Day on the first Monday in September
  7. Thanksgiving on the second Monday in October
  8. Remembrance Day on November 11th
  9. Christmas Day on December 25th 

Exemptions to Public Holiday Pay Entitlement:

There are numerous rules affecting Canadian employees’ eligibility within the province of Alberta. For instance, in Ontario, Canadian workers are entitled to public holiday pay from day one. Meanwhile, an employee in Alberta must have worked for the employer for at least 30 working days in the 12 months before the statutory holiday to be paid for it.

Vacation Pay and Entitlement in Alberta

Minimum vacation time Canadian workers are entitled to in Alberta is as follows;

Two weeks’ vacation time for every 12 months worked for the first four years. After five years of continuous employment at one employer, vacation time increases to three weeks annually. Employers can choose to have the employee work for 12 months before granting vacation time but can also choose to allow the worker to take vacation time any time after the employment has begun.

Vacation pay amounts to 4% of wages for the first four years of consecutive employment at the same employer and then 6% of wages after that. Employers can choose to pay our vacation pay with every paycheque or to pay out the applicable amount right before the vacation time is taken.

Let’s get clear on what “wages” to include when calculating vacation pay before you bring out your calculator. In the province of Alberta there is fewer pay types included and considered as “wages” than most other provinces. To calculate the 4 or 6 % of the previous year’s wages; include regular earnings and commissions. Do NOT include; public holiday pay, overtime pay, bonuses or tips and gratuities.

Note that employees are entitled to both Vacation Time and Vacation Pay.   

Please note Alberta employees working in the construction industry have varied employment rules due to the nature of the industry. Refer to Work Alberta’s website or information on employment standards for the construction industry.

There are other industries and jobs that have exceptions to the above rules. Please visit www.work.alberta.ca for further information on Alberta’s Employment Standards rules.

View the province of Alberta’s Vacations and Vacation Pay Factsheet here.

It can be confusing for American and foreign based firms to learn and comply with Canada’s stringent employment laws that often vary by province or territory. We are a Canadian based Employer of Record service provider similar to a Professional Employer Organization (PEO). Our services include payroll processing for local, American and foreign employers who opt to have us as the “Employer of Record” for their Canadian workers. If you’re thinking of hiring a Canadian worker, contact us before you establish the numerous Government of Canada accounts to begin payroll processing.

View our services page for more information on our Professional Employer Organization PEO and Employer of Record EOR services.

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

Topics: PEO, Canadian Employer of Record, American PEO, American Business in Canada

American Employers: Canada's Worker's Comp is Government Run

Posted by Stacey Duggan

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May 1, 2014 10:12:00 AM

Unlike the U.S., the workers compensation program in Canada is government run. Every Employer in Canada must register for a worker’s compensation account in every province that they have employees working in. 

Workers Compensation Form brought to you by The Payroll Edge

Each province has different rules as far as the registration process.

For example, in Ontario you cannot apply for a workers compensation account until you actually have an employee start date, in Nova Scotia you don’t register for an account until you have 2 workers and in Alberta you can pre-register regardless of whether you have employees or not.

Each province also has different registration fees and some may even ask for a pre-payment for new registrants. As an employer, you pay a certain percentage in payroll taxes to the provincial workers compensation board based on the wages of your workers and the risk associated with the type of work your employees are performing.

The bigger the risk of injury to workers, the larger the percentage used when calculating what is due, for example currently in Ontario a worker in a clerical role would cost an employer 0.22% of the worker’s wage in workers comp taxes. However a worker on a construction site in Ontario would mean the employer is taxed at 5.05%. 

If a worker is injured on the job, the workers compensation board will assign a claim adjuster who will investigate and make recommendations. The workers compensation boards in every province are in place to protect the worker and ensure employers meet health and safety standards. They can be a daunting authority to a U.S. company unfamiliar with the rules and regulations associated with the Canadian Ministry of Labour.

Many U.S. companies don’t realize that when their Canadian workers are injured, that they should complete their own investigation and that they have the right to appeal the board’s decision. They also tend to rely on their own legal counsel in the States to advise them on best practises across the border instead of engaging with a professional employment organization in Canada.

Lack of experience in Canada can lead to hefty fines for non-compliance so it’s important that U.S. companies engage in Canadian expertise, or rely on an experienced Employer of Record, when expanding their workforce to the great white north. 

Topics: Professional Employer Organizations, Worker's Compensation, Canada Revenue Agency, Canadian Employer of Record, American PEO

Americans Conducting Business in Canada Beware: Border Patrol Keeping Tabs

Posted by Stacey Duggan

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Apr 29, 2014 9:56:00 AM

 

As seen on thestar.com “Border officials to share travellers’ info with federal government” by Nicholas Keung.

Effective summer of 2014, Canadian and U.S.A. border patrol services will start keeping tabs on Canadians and Americans entering and exiting either side of the border. The Entry/Exit program initiative will further increase both countries security and has already begun taking note of third country national’s information including those arriving to Canada on work permits, foreign students and visitors. 

The Entry/Exit program will be in full effect on June 30 2014, and will be extended to all Canadian and American citizens crossing the border.  

Canada and the USA border patrol services will soon be collecting both countries citizens information as part of the new Entry/Exit initiative from The Payroll Edge

What Information will the Canada Border Services Agency (CBSA) be collecting and sending to federal departments?

  • Travellers Name
  • Date of Birth
  • Nationality
  • Gender
  • Document Type
  • Work Location Code/Port of Entry Code
  • Date and Time of Entry
  • Country where travel document was issued

How does the Canada Border Services Agency use this information? Simple; data on entry to one country would serve as a record of exit from the other. This information will enable government officials to track illegal activity such as citizens scamming Employment Insurance or child tax benefits programs when they are not in the country.

So how does this affect American employers employing or paying Canadian workers? If you conduct business in Canada -and travel there regularly, be prepared to hand over your data to border officials and have it shared between both countries federal departments.  

If you have a U.S. employee who crosses the border into Canada on a regular basis and is away from their country of residence for long periods of time, ensure that you are aware of the rules surrounding foreign travel as it may not only affect the employee’s and companies taxation liabilities, misuse will result in their inability to cross the border at all.

American Employers conducting business in Canada should also be aware of the status of their permanent residency (if applicable) as this will now be tracked under the new Canada-U.S.A. border data exchange program. Permanent residents must live in Canada for a total of at least two out of every five years to remain eligible for the program.

If you conduct business in Canada and wish to avoid the complications of your U.S. employees crossing the border to service your clientele here, employing a Canadian may be the best solution.  To do so without the complexity of registering a business in Canada and understanding foreign employment law, an Employer of Record Service in Canada (known as a PEO in the U.S.A.) can help. A Canadian Employer of Record takes care of everything for American employers retaining Canadian workers including payroll tax deductions, employment standards compliance and HR management solutions. Contact The Payroll Edge to learn more. 

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

Topics: Professional Employer Organization, Government Compliance, PEO, Canadian Employer of Record, American PEO, American Business in Canada, Canadian-Based EOR, US and Canadian Business

Canadian vs. American: Drug Testing & Background Checks

Posted by Stacey Duggan

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Apr 22, 2014 8:55:00 AM

Canadian vs. American: Drug Testing and Background Checks

Background Checks and Drug Testing

These two often go hand in hand in the U.S. and are a precursor to employment but in Canada the rules and perception surrounding drug testing and background checks are very different.

Drug testing a potential employee is rarely permitted in Canada and is not worth the legal risk with the Human Rights Commission. Although this issue has seen some press as of late, the majority of Canadian employers are not permitted to maintain policies in regards to pre-employment drug testing and random drug testing during employment. The exceptions are safety sensitive positions where an accident or incident has occurred or where being ‘under the influence’ could cause irreparable damages or death.

A great example of this can be seen in the recent lexology article ‘Suncor random drug and alcohol testing decision released’ written by Caitlin Nobes; 

Recently in Alberta, with the oil industry booming the issue of safety has come up because workers living on worksites are suspected of being intoxicated while working. Suncor was set to begin random drug testing on their employees but it was put on hold due to an injunction and the panel who made the decision said “the program cannot be justified” and “In our view, the evidence does not demonstrate a culture at the Oil Sands Operations where the consumption of alcohol is so pervasive as to be accepted by employees, where employees go together to drink openly and where such activity is either condoned or encouraged by management’s practices or inaction”

Unifor Local 707A President Roland Lefort, who represents the workers at the affected sites says:

"Random drug testing of workers that have done nothing wrong is a violation of their basic rights, we will work with Suncor to achieve the highest possible levels of workplace safety with education and prevention, not invasive medical procedures."

The practise of drug testing employees is for the most part, considered a human rights violation in Canada.

Unlike in the U.S., it is not common practice to run a background check on every potential employee. Although there is no law in regards to this, it is best practice in Canada to only run a background check on a potential employee if they will be engaged in a job working directly with money or highly sensitive information. Many times U.S. companies have run these checks on a Canadian out of habit and end up with a disenchanted potential hire.

For those American companies keen on hiring Canadian employees without a good understanding of the rules and regulations to do so, should engage with an Employer of Record (EOR) service for legislative and legal compliance. Canadian EOR's (known as PEO's in the United States) can ensure seamless integration into the Canadian market without the daunting task of understanding foreign employment compliance.

For more information on our Employer of Record Services
Contact one of our Employer of Record specialists.

 

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

Topics: EOR, Professional Employer Organization, Employment Standards Act, Canadian Employer of Record, American PEO, American Business in Canada, Compliance, Canadian-Based EOR, Canadian EOR

Employer of Record Service: Your American Business Presence in Canada

Posted by Ray Gonder

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Mar 26, 2014 10:21:00 AM

American Business Expansion into Canada and when you should contact the Payroll Edge for our Employer of Record Services Great! Your expanding operations north of the border but with your American business expansion into Canada you wonder; How am I going to pay my Canadian employees?

Unless you are using an Employer of Record Service in Canada (similar to a PEO in the U.S.) and want to hire an employee you must register your business with the Canadian government. Federally registering is the first step and then registering a business presence in each province and / or territory (Canada has 13) you are operating in would be the next step. Of course this process can be even more complicated if you are a Limited Liability Company (LLC) in the US as Canada has no similar status and again has different rules depending on the province or territory.

Other Government Accounts U.S. based companies will need to pay Canadian Employees;

Registering your business is not the only registration you will do as a new business in Canada. You must also apply for a payroll tax account number into which you will remit the employer and employee taxes for the Canada Pension Plan and Employment Insurance.

These two taxes are in every province and territory across Canada with the difference being that each province has its own rate in which these taxes are calculated. Keep an eye on the rates as they often change for each province at the beginning of each year and its important to know when paying a Canadian. Some provinces have other payroll taxes such as the Employer Health Tax in Ontario and the Health Services Fund in Quebec so it’s important to know what other type of taxes are associated with the province the work is being done in. It’s worthy to note that as a company in Canada, you will be given a weekly, semi-monthly, monthly or quarterly deadline for these payroll taxes but for those provinces that have extra taxes (like the 4 provinces that have a health care tax) your deadlines might be on a different schedule. The Canadian Government will not hesitate to apply interest and penalties to slow paying accounts.

The best advice an American company should take when hiring workers in Canada is to use a Canadian Based Employer of Record service. Using an EOR like The Payroll Edge enables U.S. based companies to focus on their core business rather than learning a whole new payroll entity. Contact The Payroll Edge today! 

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

Topics: Payroll Tax in Canada, Payroll Tips, EOR, Employer of Record, Payroll Tax Tips, U.S. Business operating in Canada, Paying a Canadian, Canadian Employer of Record, American PEO, Payroll Tax Laws in Canada, American Business in Canada, Canadian-Based EOR, Canadian EOR, PEO Services, Canadian Payroll Services

What’s the Difference Between a Canadian EOR and an American PEO

Posted by Stacey Duggan

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Mar 10, 2014 8:54:00 PM

What’s the Difference Between a Canadian EOR and an American PEOMany US-based businesses already benefit from the services of a Professional Employer Organization (PEO). A PEO offers easy and affordable outsourcing of administrative and managerial tasks that many companies find cumbersome and expensive. By using a PEO, those companies are able to focus their time and efforts on their core competencies, instead of on tedious business processes. A Professional Employer Organization can handle everyday tasks like payroll processing and human resources management, as well as more complicated tasks like health and safety compliance, quarterly tax filings and year end reporting. For Canadian businesses, these same services are available, though they’re offered under a different name. Within Canada, a provider that offers these services is known as an Employer of Record (EOR).

So, What is an EOR?

An EOR is, at its most basic level, just the Canadian cousin of an American PEO. They offer the same suite of services, allowing Canadian companies to outsource taxing administrative tasks. The Canadian company retains complete control over their business and processes, while the EOR is contracted to handle as many administrative tasks as necessary. Like an accountant or legal office, the EOR simply provides a service to the company, allowing the business to focus its efforts on providing great products and services. However, there are some crucial tasks that an EOR offers US-based businesses that they won’t find with an American PEO.

Reaching Across Borders

A PEO helps US businesses operate more efficiently in the US. An EOR helps US businesses operate more efficiently in Canada. The process of expanding into Canada can be prohibitively expensive, incredibly complex, and very time consuming. Many US businesses simply don’t have the resources or resolve to navigate all of the legal and practical impediments to such an expansion. That’s where the services of an EOR become indispensable.

A US-based business, looking to expand into Canadian markets, can contract with an EOR, just like they would a PEO in the States. Engaging an EOR allows the US business to overcome all of the legal and practical issues in a fast, efficient, and completely legitimate way. The EOR, as the name suggests, becomes the employer of record for any employees operating in Canada. Every aspect of employee management, from payroll to health and safety, is handled by the EOR. As a legal Canadian business, the EOR already has an administrative presence in Canada, along with all of the necessary banking, insurance, and government infrastructure necessary to legally pay Canadian employees.

From Concept to Commerce

Simply put, an EOR streamlines the process of getting your Canadian expansion up and running, and keeps it running legally and efficiently. Instead of the weeks or months that a do-it-yourself expansion typically takes, using an EOR can shorten your expansion timeline to days, or even hours. By fast-tracking your implementation, an EOR allows you to focus on running your expanded business, instead of focusing on trying to expand your business. The time, energy, and money saved can immediately be reinvested in your core business processes. 

Small Differences Sometimes Make a World of Difference

While the differences between an EOR and a PEO aren’t vast, the ability to help you expand into Canadian markets make an EOR an incredibly powerful strategic partner. A partner like The Payroll Edge offers all of the services of a US-based Professional Employer Organization, along with the added benefit of Employer of Record services. With their help, you can quickly implement your expansion, and rest easy in the knowledge that your administrative and managerial needs are being met by highly trained, seasoned professionals. 

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

Topics: American PEO, American Business in Canada, Canadian EOR

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