The chance to work as a contractor in the United States represents an exciting opportunity, allowing Canadian workers to gain invaluable experience in a foreign market while also gaining insight into US business practices. However, when it comes to compensation and employer and employee responsibilities, it’s important that Canadian contract workers know where they stand. Canadian and US regulations concerning compensation can be quite different, especially as they concern contract workers. As a Canadian citizen working in the United States for a US employer, knowing how to navigate two different legal systems can be confusing. However, it doesn’t have to be! Here are some of the things we think you should know.
There are some fairly significant differences between the US and Canada when it comes to labour laws, and in particular, non-compete agreements. While non-compete agreements exist in Canada, and Canadian employers do have the right to ask you to sign one, they have nowhere near the influence that they do in the US. In Canada, while you may be asked to sign a non-compete agreement, they are rarely enforced, as the Canadian government has deemed them in violation of workers’ rights. This is not the case in the US, where non-compete agreements are enforceable, and incredibly common. Which is to say that, if you are a Canadian contract worker in the US, and are asked to sign a non-compete agreement, it is important that you understand the implications of the agreement. If you choose to enter into a non-compete agreement, you are barred from discussing trade secrets, and in addition, you are unable to find employment (within the US) in a similar field for a designated period of time.
If you are going to work in the US, it is imperative that you are properly classified and properly compensated by your US employer. Many employers deliberately misclassify their employees as contract workers, despite the fact that they are working the same hours and working under the same conditions as a full employee. This benefits the employer because, as a contract worker, they are not obliged to provide you with any of the benefits that they would be legally required to extend to a regular employee, things like health benefits, and they are also able to evade various tax laws. If you are an independent contractor, you have certain rights that you should be allowed to exercise, including the ability to set your own hours, or to subcontract your work out to others. Employers, who have taken you on to complete the job of a regular employee, but have classified you as an independent contract worker, are in serious violation of Canadian labour laws, which are enforceable through the Canada Revenue Agency (CRA). If you have been misclassified, you are not being properly compensated, and are not receiving the full roster of benefits that you are entitled to!
Having the Right Paperwork
The NAFTA agreement between the US, Canada, and Mexico means that Canadians have the ability to work in the US under the TN category, or non-immigrant classification. If you have Canadian citizenship, you are not required to apply for a VISA to work abroad, but must be able to provide a letter from your employer that details what you will be doing for them, the length of your stay, and your relevant qualifications. TN non-immigrants are allowed to stay in the US for a period up to three years, at which point they would need to begin to get an extension from your employer, or return to Canada to begin the process again. It is important to note, however, that if you are doing contract work in the US under the TN category, you are considered a Canadian citizen living temporarily outside of Canada, and are required to continue to pay both provincial and federal taxes.