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U.S. Employers Beware: 4 Major Changes to Saskatchewan’s ESA

Posted by Stacey Duggan

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Jul 16, 2014 8:30:00 AM

U.S. Employers beware: Saskatchewan has updated their ESAAs an American or foreign employer of Canadian workers, you need to protect yourself from ESA violations. The government of Saskatchewan made significant changes to their separate pieces of Canadian employment legislation regarding employment standards, occupational health and safety and Canadian labour relations.

The previous versions of Saskatchewan’s Canadian employment laws were found separate from each other across different employment related pieces. As of April 29, 2014, the government of Saskatchewan announced a new Employment Standards Agreement to tie all those pieces together.

If you are an American or Foreign employer paying Canadian employees please take note that Canadian labour standards in Saskatchewan have changed:

1. Minimum Wage Changes

The current minimum wage in Saskatchewan is $10.00 per hour with an increase of twenty cents taking effect on October 1, 2014. Saskatchewan’s ESA sets out that any changes to the minimum wage will now be announced on June 30 of each year and any changes will take effect on October 1 of each year. Furthermore the minimum wage in Saskatchewan will now be indexed to the consumer price index.

2. Hours of Work and Overtime 

The ESA now allows employers to schedule their Canadian employees for either four 10 hour workdays or five 8 hour workdays. Employers and employees can also choose to average an employees work hours over 1, 2, 3 or 4 week schedules without a work permit. Overtime pay can now be banked by employees.

3. Leaves of Absence 

Service requirements for Maternity, Parental and Adoption leaves are reduced from 20 weeks to 13 weeks. 
New Leaves in the ESA include: Organ Donation Leave, Critically Ill Child Care Leave, Crime Related Child Death or Disappearance Leave and Citizenship Ceremony Leave. 

4. Termination 

Workers in Saskatchewan with more than 13 weeks of continuous employment are now entitled to notice or pay in lieu upon termination of their employment. 

Hiring workers in another country is great for expanding business but risky for Employment Standards Act violation liability. Staying on top of new regulations in the Canadian workforce is difficult. Gaining the services of an Employer of Record service provider (similar to a PEO) like The Payroll Edge allows U.S. and foreign companies the freedom of expansion without the compliance and potential for violating Canadian employment law.

For more Canadian employment law updates and payroll tips, subscribe to our blog. Click here for more information on our services or contact us to hear about how our Professional Employer Organizations helps hundreds of American and foreign companies get competitive while staying compliant.

A U.S. Company Looks to Expand Tts Workforce in Canada

Topics: US Firms Expanding into Canada, Employment Standards Act, Employer of Record, ESA, ESA Violations, ESA Compliant, Canadian Employment Laws, Employee Relations, American Business in Canada, Paying Canadian Workers, Paying Canadian Employees

3 Things U.S. Companies Need to Know About Canadian Labour Laws

Posted by Stacey Duggan

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Jul 3, 2014 1:46:00 PM

3 things american companies need to know about canadian employeesAmerican companies eyeing a workforce expansion into Canadian markets need to be aware of many social and legal differences between our two countries. Without an understanding of these many differences, it will be difficult, if not impossible, to avoid delays, or even fines and penalties, if you are looking to actually put in place a bricks and mortar business. While some of the differences can be incredibly complex, most of them fall into a few broad categories. Looking at these categories, and the requirements for setting up a business in Canada, can help you determine if it's something you want to attempt on your own, or if you want to seek professional assistance. When contemplating a Canadian workforce expansion, you should keep the following three things in mind.

Workers' Rights

Cultural and legal differences give Canadian employees more rights than are found in most US states. While it's not uncommon to find "at will employment" laws throughout the US, you'll find no such provisions in Canada. Instead, employees are granted certain statutory rights that govern how employers must treat them. Canadian workers are entitled to vacation pay, notice of termination, accommodations for disabilities, and are largely free of drug testing obligations. These are just a few of the most basic differences between US and Canadian employment laws. Failing to understand all of the differences can lead to fines or even a visit from the Canadian Human Rights Commission.

Employer Obligations

With increased workers' rights also come increased employer responsibilities. These responsibilities can be very similar to US requirements, or completely different. In the US, employers must make reasonable accommodations for workers with disabilities, unless it creates an undue hardship on the business. In Canada, there is no exception for undue hardships. If an employee needs an accommodation, the accommodation must be made. There are also numerous requirements regarding workplace safety and training, along with keeping required postings and reading materials on hand. Failing to abide by any of the statutory requirements can result in substantial fines, or even shutter your business.

Getting Started

Taking your Canadian workforce expansion from concept to completion can be a convoluted and time consuming process. You can't simply hire someone and start conducting business in Canada. There are processes that must be followed to the letter and, if they're not, your expansion could be delayed or derailed. Creating government accounts, setting up banking and insurance, and dealing with multiple bureaucracies takes time. Trying to do it on your own can actually cost you money in the long run, as you'll likely have to fix mistakes along the way.

If you are looking to hire Canadian employees but are not doing any transactional sales with Canadian companies, then an Employer of Record service like The Payroll Edge could be the answer to hiring the workforce you need without the complication of understanding foreign employment and taxation.

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

Topics: American Companies, Canadian Employment Laws, US and Canadian Employment and Labour Law

Use it or Lose Vacation Policies: Not in Canada!

Posted by Stacey Duggan

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May 29, 2014 8:30:00 AM

If you’re an American or foreign employer hiring Canadian employees, you may or may not have heard employee vacation policies are “use it or lose it”. Can it be true? Well, partially.

In Ontario, the Employment Standard Act or ESA for short, states that:

“Most Employees earn at least 2 weeks of vacation time after every 12 months. Employees are entitled to be paid at least 4 per cent of total wages earned as vacation pay.”

Employers are not required to let the worker carry vacation credits forward from one year to the next if they went unused. However, the employer is required to pay the Canadian worker their accumulated vacation pay whether the vacation time was taken off or not. There you go, the “use it or lose it” policy does apply –to vacation time NOT vacation pay!

Vacation Entitlement & Pay by Province The Payroll Edge resized 600

Fast Facts on Canadian Vacation Policies

  • Minimum vacation pay across Canada (excluding Saskatchewan) is 4 per cent of total wages
  • Minimum vacation pay in Saskatchewan is the highest in the country at 6 per cent of total wages
  • Minimum vacation time across the country (excluding Saskatchewan) is 2 weeks after 12 months
  • Minimum vacation time in Saskatchewan is the most generous at 3 weeks after 12 months
  • Quebec is the only Canadian province that includes tips and gratuities’ as part of total wages when calculating vacation pay
  • New Brunswick is the only Canadian province that includes only regular earnings when calculating vacation pay

Save our Canadian Vacation Pay and Entitlement Chart or bookmark this page to track your Canadian workers vacation entitlement and figure out based on province what earned wages includes when calculating the 4 per cent (or more) of vacation pay.

The Payroll Edge answers question like these on a daily basis for our American and foreign clients who employ Canadian workers. We are their Employer of Record (EOR) service provider or Professional Employer Organization (PEO) as it’s called in the United States. 

As specialists in Canadian employment law and compliance, we offer a complete HR management solution that takes the pain out of learning a whole new set of rules and regulations in another country.  

7 Signs It's Time to Outsource Payroll

Topics: US Firms Expanding into Canada, U.S. Business operating in Canada, Ontario, Canadian Employment Laws, vacation policy Canada

American Company Hiring Canadian Employees: What You Need to Know

Posted by Stacey Duggan

|

May 12, 2014 10:06:00 AM

american company hiring canadian employees what you need to knowBefore hiring Canadian employees, there are a few things you need to know. As an American company, you may not be familiar with the many differences between US and Canadian employment laws. Not knowing those differences could result in violations of Canadian laws. If that happens, your company could face expensive fines and penalties. Here are some of the key differences that you should be aware of before hiring Canadian employees.

Minimum Wage

Each province and territory has their own rules for minimum wage payments. Changes to the minimum wage can vary from year to year, and different employee classes can have different minimums. Keeping up with the changes, and making sure employees are properly classified, is the responsibility of the employer.

Vacation Pay

Most Canadian workers are legally entitled to two weeks of vacation time each year. For most employees this means that they are paid 4% of their pay for this vacation period. Only one province has a higher vacation pay standard for new employees and that’s in Saskatchewan where employees are entitled to 5.77%.

Drug Testing

Pre- and post-employment drug testing is generally not permitted under Canadian law. In most instances, it's actually considered a human rights violation, and testing employees could earn you a visit from the Human Rights Commission.

Canadian Pension Plan

You'll be responsible for withholding the correct amounts from employee paycheques and remitting payments for CPP. You'll also be responsible for remitting your contributions to the employees' CPP funds. The maximum withholdings vary from year to year, and it's up to you to know when an employee has maxed out.

Accommodations for Disabilities

As an American company, you're probably familiar with the many provisions for providing equal access to persons with disabilities. In Canada, those provisions can go quite a bit further. Even if it causes an undue hardship or burden on your business, Canadian law requires you to make any necessary accommodations.

Termination of Employment

Throughout much of the US, employment can be terminated "at will" with no notice or severance pay. Canadian law requires that reasonable notice of termination be given to the employee. Employers also have the option of "payment in lieu" of notice. Essentially, payment in lieu is severance pay that employees are entitled to if reasonable notice can't or won't be given.

Changes in Employment Terms

In the US, employers can generally change the terms of employment at any time, without notice. If the employee doesn't quit, they are considered to have accepted the changes. In Canada, changes to the terms of employment generally must be accompanied by a raise or other consideration. If the employee is terminated for not consenting to the changes, they may be owed any payments they would have accrued during the period of reasonable notice of termination.

More Beneath the Surface

These are just examples of some of the legal requirements that cause problems for American companies. There are literally hundreds of differences between US and Canadian employment laws, and it's up to you to make sure you comply with every single one of them.

If you don't have the time, or confidence, to learn an entirely new legal system, it's a good idea to partner with someone who does. A Canadian payroll service provider can help you with payroll compliance, and ensure that your employment practices are lawful. With the costs of fines and penalties factored in, the expense of a payroll service provider is truly worth the cost.

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

Topics: American Companies, Canadian Employment Laws, Hiring Canadian Employees

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