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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

U.S. Employers: Navigate Canada’s Employment Standards Carefully

Posted by Ray Gonder

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Apr 25, 2014 9:39:00 AM

Ontario's Employment Standards Poster is required to be displayed in Canadian workplaces. Call The Payroll Edge to get employer of record services

 

 

As seen on First Reference Talks “Navigating Ontario’s Employment Standards Act” by Doug Macleod

Did you know as an employer you are required by Canadian Law to post a “What you should know about the Employment Standards Act” in your workplace for your employees to see? The Employment Standards Act is in place to set minimum standards for workplaces in Ontario. Most Canadian workers living in Ontario are covered by the act whether they are employed by an American employer or a Canadian company. 

If you’re an American company employing and paying Canadian workers, here are a few regulations from the Employment Standards Act you should follow when hiring and paying Canadians:

 

  • Canada’s Minimum Wage varies by province. In Ontario, minimum wage will be $11.00 per hour beginning in June 2014. Please note the minimum wage for servers, students and nannies varies.
  • Employers are required to pay Canadian employees (including temporary and contract workers.) for statutory holidays –even if they did not work that day. Employees who work on stat holidays are entitled to time and a half (overtime pay).
  • Employers must pay Canadian workers overtime pay after 44 hours in one work week.
  • Canadian workers are entitled to two weeks’ vacation for every 12 month period of work. Most employees are entitled to a minimum of 4% vacation pay.
  • A reasonable notice of termination must be given to Canadian employees who have worked for their employer for longer than 3 months’ time which is considered the “probationary period”.
  • There are different unpaid leaves of absences an employer is required to give their employees; Pregnancy and Parental Leave, Reservist Leave, Organ Donation Leave, Personal Emergency Leave and Family Medical Leave to name a few. Length of time for each unpaid leave of absence varies. During a leave of absence, a Canadian employee’s seniority is not affected by their leave and benefits offered before a leave are still required to be paid by the employer during a leave.

The Employment Standards Act can be examined in further detail here. Please note these ESA regulations can change depending on workplace, industry, age, length of employment and other factors so be sure to use the tools on the Canadian Ministry of Labour website.

Failing to comply with the ESA could result in hefty fines, penalties and in some cases persecution whereby American and foreign employers cannot plead ignorance as an excuse. If you’re doing business in Canada, you must know the rules to protect yourself, your employees and your reputation.

If you’re an American looking to hire and pay a Canadian worker consider an Employer of Record service. An EOR (similar to a PEO in the United States) is a great option for American and foreign employers who aren’t interested in learning a new set of rules in employment law. Contact The Payroll Edge today for more information. 

7 Signs It's Time to Outsource Payroll

Topics: Employment Standards Act, ESA, ESA Violations, ESA Compliant, U.S. Business operating in Canada, American Business in Canada, Compliance, Canadian-Based EOR, Canadian EOR

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

Employment Agreements and What They Need to Include

Posted by Stacey Duggan

|

Mar 24, 2014 9:05:00 AM

Employment Agreements blog article by The Payroll EdgeEvery province and territory in Canada has their own employment standards when it comes to how employers are legally required to engage with their workforce.

Unlike in the U.S., Canadian employees lodge complaints and claims against employers who do not adhere to these standards, through their provincial government. In comparison to disgruntled employees in the U.S., it is very rare to see a lawsuit between these two parties as much of the investigation and adjudication is through this Canadian governing body. With this in mind, employers need to understand that an employment agreement not only outlines the duties and responsibilities of the worker but can also protects them from certain liabilities.

A properly laid out agreement needs to meet with government compliance when it comes to the employment standards of the province the employee is working in. An employment agreement should include but not be limited to:

  1. Vacation, Statutory Holiday and Overtime Pay Entitlement 
    In most provinces employees are entitled to 4% vacation pay and can choose to accumulate it or have it paid out out with each paycheque. The exception would be Saskatchewan where employees receive a minimum of 5.77% of vacation pay 

  2. A Termination and Lay Off Clause 
    There is no at will employment in Canada and the Ministry of Labour has strict rules in regards to notice periods or pay in lieu of notice when terminating or laying off employees

  3. A Disciplinary Policy 
    It is standard practice in Canada to follow four steps when disciplining an employee; verbal warning, written warning, suspension than dismissal. Not following these steps can lead to legal challenges when faced with a wrongful dismissal claim

  4. A Health and Safety Policy
    A health and safety policy should not only talk about the employers responsibilities but the expectation that the employee is committed to following these rules and regulations. Health and Safety is everybody’s responsibilities.

  5. A Workplace Violence and Harassment Policy 
    Each province has their own regulations in regards to this policy, some much more in depth than others

These are only a few of the policies that should be included in an employment agreement and as you can see, are important pieces of ensuring that both parties are on the same page when it comes to rules and regulations. Both the employer and employee need to sign an employment agreement indicating their understanding and acceptance of the information contained within. An Employer of Record can handle all of these details for you. 

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

Topics: U.S. Business operating in Canada, Canadian Employer of Record, American Business in Canada, Canadian-Based EOR, Canadian EOR, Employment Agreements

Canadian Worker's Compensation: What U.S. Companies Need to Know

Posted by Stacey Duggan

|

Mar 17, 2014 9:05:00 AM

Workers Compensation Board in Canada is Government run

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 and 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 3 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 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% in workers comp taxes. However a worker on a construction site in Ontario would be taxed at 5.05%.

If a worker is injured on the job, a 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 they should complete their own investigations and 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 practices across the border.

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. 

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

Topics: Ministry of Labour, Payroll Tax in Canada, Employer of Record, U.S. Companies operating in Canada, MOL, Worker's Compensation, Canada Revenue Agency, Canadian Employer of Record, Paying Canadian Workers, Canadian-Based EOR, Canadian EOR

Professional Employer Organizations Are Called "Employers of Record" in Canada

Posted by Stacey Duggan

|

Aug 22, 2013 9:00:00 AM

Employers of Record in CanadaUS-based businesses having to pay Canadian staff in Canada can benefit from using a PEO (Professional Employer Organization). In Canada, PEOs are called “Employers of Record” (EORs). Foreign companies can simply have their Canadian staff paid on their behalf by a Canadian-based EOR. Foreign companies gain the freedom to move ahead without the HR and payroll costs and headaches and potential liabilities that come with working within the Canadian regulatory environment.

Having a Canadian EOR immediately removes the following barriers from a foreign company's expansion and operations in Canada:

Insurance, Banking, and Financial Infrastructure

If you're currently operating in the United States, you already have these systems in place. The only problem is they are not relevant in Canada as most US-based systems won't work north of the border. Establishing insurance, banking, and financial infrastructure that is compatible both with your current infrastructure and with Canadian systems can be tricky and time-consuming.

A Canadian Administrative Presence

To pay Canadian staff in Canada, US-based businesses need to have a Canadian administrative presence. This means registering and maintaining a Canadian-based corporation and physical address to be compliant with Canadian law.

CRA Filings

The Canada Revenue Agency works differently than the IRS, and it can be troublesome to learn and be compliant with a whole new set of rules and regulations. When using an EOR, this is all handled for you. You don't have to deal with the paperwork, the remittances, and the legislative changes that affect Canadian HR and payroll processing regulations.

Compliance with Canadian Federal and Provincial Regulations

From employment laws to health and safety regulations, the rules are different in Canada, and even with a thorough knowledge of Canadian law, you could easily end up being fined for non-compliance. An EOR gives you a safety net. They're already compliant with Canadian law, so when you use an EOR, you're assured of being in good standing.

A Canadian Employer of Record can also help with:

  • Advice on using independent contractors.

    Recently, several well-known, US-based companies have had disputes with the CRA over what constitutes an independent contractor. When you have an Employer of Record who understands these nuances, you can avoid fines and legal hassles.
  • Ever-changing compliance laws.

    You don't have time to read up on every Canadian legislative change that affects business taxes and laws. An EOR ensures you are always up-to-date and compliant.
  • Assistance with human resources.

    Canada has a different culture when it comes to hiring, unions, contracts, vacation days, and other HR issues. An Employers of Record can give you much-needed advice on these issues.
  • Improved costs.

    Using an Employer of Record not only saves you worry and time, it also saves you money. It's a simple and efficient way to establish your Canadian presence and keep your operations running smoothly.
  • More time.

    If you'd rather focus your time on your core competencies than on the small print in CRA manuals, an Employer of Record manages all the HR and payroll details while you manage your Canadian operations.

For foreign firms that need to pay Canadian staff in Canada, seeking out a Canadian-based firm that offers Employer of Record services can eliminate a potentially huge administrative headache.

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

Topics: EOR, Professional Employer Organization, Canadian Payroll Service, PEO, Employer of Record, U.S. Companies operating in Canada, American Business in Canada, CRA Compliant, Canadian-Based EOR

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