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How Does a Canadian EOR Work?

Posted by Corinne Camara

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Jun 8, 2016 9:00:00 AM

How_Does_a_Canadian_EOR_Work.jpgThe business world is beginning to think outside the box more, as the pressure of technology and globalization set in. The rules have changed, the game has changed, and that has people looking for alternative solutions to age-old problems.

A Canadian EOR (or an Employer of Record) isn't a new business, but it is one that has been talked about more and more lately. They specialize in business solutions of all kinds—a kind of partner that helps businesses with various tasks. In some cases, they help manage peripherals, like payroll, taxes, and human resources. In others, they step up and help businesses expand to new environments and new countries. They've been increasing in popularity a great deal in the last few years and it's no wonder. That said, there are still some questions floating around, ones that need answers. What exactly is an EOR? What can they do? How do they work? Luckily, we have all those answers and more.

Business Expansion

In terms of a Canadian EOR, they're perhaps most well known as specialists in aiding business expansion for companies of all sizes and types. Of all things, expanding is no doubt one of the most challenging journeys a company will ever go on – there's researching the lay of the land, learning new laws, registration and administrative infrastructure, hiring and managing foreign employees. It can be overwhelming for even massive corporations and it takes a lot of time, a lot of money and a lot of patience. With luck, that's where EORs come in and, for the most part, why they've been increasing in popularity.

A Canadian EOR acts as the legal employer for your foreign workers—that is, they officially employ them, pay them, manage them and all other things that are necessary, and you simply contract your workers from them. Since the EOR is already well established in the country, both culturally and legally, you gain the benefit of their expertise. You choose the employees, you draft the employee agreement, and best of all, you can skirt all the tedious paperwork and registration usually needed to expand.

Naturally, an important question that comes up on a regular basis is the legality of the situation. You'll be pleased to know when working with a Canadian EOR, regardless of where in the country you do it, you're one hundred percent in accordance with the law. With an EOR at your side, you'll never have to worry about complicated legal compliance. They'll even ensure your taxes are paid to the Canadian Revenue Agency on your behalf, which is one less thing to worry about.

Payroll, Law, and Human Resources

It's not just business expansion that an EOR specializes in—it's all the managerial tasks associated with employee management as well. Especially as a foreign company, it will be challenging tackling new human rights and labour laws, tax laws, and deductions, all while following both your native laws and Canadian laws to boot. EORs are experts in payroll and payroll efficiency, which means you not only get the benefit of an employer organization, but that of a payroll service provider as well. That means you don’t have to worry about processing payroll in a new country with new regulations, you can entrust that duty to the EOR and their teams of experts. A Canadian EOR can also offer benefit package deals, which can help attract and retain only the most skilled employees and, because they're so familiar with the laws, can ensure you're up to code in all regards. In effect, their job is to eliminate as many obstacles as possible so your business can operate smoothly.

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

Topics: Canadian EOR

3 Benefits of Partnering with a Canadian EOR

Posted by Ray Gonder

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Jun 1, 2016 9:00:00 AM

3_Benefits_of_Partnering_with_a_Canadian_EOR.jpgFor any business entering a new market, a Canadian Employer of Record (EOR) can be the difference between easing into the Canadian market with knowledge and foresight or grappling with stagnant growth in the initial stages. Read up on just some of these key benefits and avoid the potential pitfalls that can happen to a business that strikes out into the Canadian wilderness on their own.

1. Efficient Local Recruitment

Often, the recruitment process in a foreign nation can be lengthy and arduous. Screening job candidates, scheduling and conduction interviews, and potential cultural differences can all make for a frustrating experience for a business trying to get it's footing on new soil. An established Canadian EOR already draws from a vast wealth of relations with Canadian firms and will be able to connect you to a qualified pool of potential employees. Typically, a Canadian EOR will already possess tried-and-tested personnel who are ready to step in and fill those roles that you need filled by a native Canadian employee.

Furthermore, the Canadian PEO will be able to negotiate benefit plans with local insurance companies that would be impossible to obtain for SMBs (Small-to-Medium businesses) and might fly under the radar of larger corporations coming from outside of Canada. This is going to lead to a much more attractive benefits plan for potential employees and a happier workforce overall.

2. They Know Canadian Legislation

Often overlooked, occasionally to detrimental effect, is the maintenance of legal compliance for a foreign company. Dealing with one nation’s rules and regulations can be daunting, nevermind having to deal with a foreign country's whole new set of rules. A Canadian EOR is already fluent in Canadian policy and should have a standing relationship with the Canada Revenue Agency. Partnering with an Employment of Record will certainly lessen the paperwork on your desk, and might even save you from a costly mistake. The EOR is already registered, and strategically inclined towards letting you focus on long-term goals without getting bogged down in the details. With an EOR you're never going to have to worry about unexpected tax regulations or losing track of changing laws.

3. Saving Money by Buying the Whole Package

Ultimately, an EOR is about outsourcing payroll to a local partner, to save you time and money. Sure, you could hire your own legal team, your own HR department and/or payroll department, but having to deal with the costs of each dedicated group can be daunting, particularly for SMBs. Your partnered Canadian EOR is going to supply you with a reliable team of all three, and as a third party organization it's going to charge a flat rate to cover all of your needs.

As an expanding company, you want to focus on clarifying and maintaining your vision and convincing foreign markets that they need to make space for your enterprise. The mountain of legal paperwork that you have to fill out isn't going to help you when you need to make a case for keeping your foot in the door. Hiring an Employer of Record will ultimately keep your growing company healthy and thriving, and help you make a name for your business as an international firm.

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

Topics: Canadian EOR

Why US Companies with Workers in Canada Transfer HR Tasks to an EOR

Posted by Karen McMullen

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Feb 8, 2016 9:00:00 AM

Why_US_Companies_with_Workers_in_Canada_Transfer_HR_Tasks_to_an_EOR.jpgIn the last few years, more and more US companies have been hiring workers abroad in Canada. It's no wonder – Canada is known for having high educational standards, hard workers and a similar cultural business environment, making it an easy and beneficial transition for many. Even when you put aside the work it takes to establish yourself and obtain these workers, there are still a few questions ahead. How will you manage payroll? What laws are you required to follow? And, perhaps most importantly, how do you handle human resources for foreign employees?

Luckily, the world of human resources has been keeping up with ambitious expansion into other areas, especially Canada, and has the solution: hiring an employer of record (an EOR) is not just for obtaining employees or establishing a presence anymore. They also handle human resources and here are just a few of the things they can do for you.

1. Hands on Management

One of the biggest downsides to having foreign employees, according to the employees themselves, is a feeling of isolation from the head office. Being so far away from the main headquarters of a company, many workers are managed from afar and studies have shown that they often suffer for it – not just in terms of morale, but in terms of work as well.

When you hire an EOR to not just hire, but also manage your employees, you're ensuring that they feel comfortable and have direct assistance and direction where they need it most. An EOR takes morale seriously and also strives to ensure you get the best quality work from the best quality workers possible, so it's a solution that benefits everyone.

2. Payroll Expertise

Despite being best known as the easiest way to hire employees in a foreign country, EORs actually excel in terms of payroll management. As a team, they're incredibly well-versed in payroll laws, accounting and efficiency and can manage everything from regular payroll to garnishments, pay outs to RSPs and benefit plans – they can even pay your business’s taxes on your behalf. They're always looking for the most efficient way to manage everything so that every aspect of your business can run smoothly.

3. Benefits

Because an employer of record deals with employees from not just your company, but many, they are able to secure incredible rates when it comes to benefits based on the sheer number of employees they represent. Many companies, ones too small to consider getting benefits, have been able to secure medical, dental, optical and life insurance (among others) at a cost they would never have expected given their small size and limited budget. An EOR is dedicated to ensuring you get the benefits plan that suits not just you, but your budget as well, and can easily negotiate on behalf of you and your workers for comprehensive plans that can raise employee retention and attract new talent.

4. Legal Understanding

Having legal experts on your side (without that legal cost) is one of the best things a business could hope for. This means that your human resources policies will remain adhered to, fair and legally compliant to ensure the safety and comfort of both you and your workers at all times. An EOR stays up-to-date on all new laws that come into play, even as they change month to month. They understand municipal, provincial and federal law and ensure compliance in all interactions with employees and your company and it reflects in terms of payroll, policies, insurance and infrastructure and everything else they do. Minimize the risk your company might face and reduce the cost of a full legal team by consulting with an EOR. You'd be surprised what they could do for you.

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

Topics: Canadian EOR

What to Include in a Canadian EOR Agreement for Canadian Employees

Posted by Shannon Dowdall

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Nov 30, 2015 12:24:34 PM

What_to_Include_in_a_Canadian_EOR_Agreement_for_Canadian_Employees.jpgEOR (employer of record) agreements are a relatively new consideration for businesses, especially ones that have never hired Canadian employees before. Because of variances in laws and regulations across the border, it can be difficult to know what exactly to include in one and what can be asked of your EOR and the workers they employ on your behalf.

Employers of Record

More businesses than ever are engaging the services of an employer of record to make the hiring process easier in a foreign market. Because they're already set up with an official business, tax filings, business insurance and other administrative things, they make it easy to skip the hardest parts of expansion and move straight to hiring skilled Canadian employees. An EOR acts as the employer on your behalf, which means any contracts signed are between your business and them; and between them and the employees – no agreements are typically signed between you and the employees, which makes things easier in a lot of cases.

On the other hand, businesses can make provisions within their agreements with an EOR to include some clauses and information that employees must agree to in order to be contracted to them and that's where the confusion begins. While some laws apply to both Canadian employees and American employees, other laws don't – this goes for clauses as well. There are a great deal of clauses and inclusions you're not allowed to add to these agreements, and that's what we're here to talk about.

What to Include

Be sure to include information about the kind of insurance you require – for some, this is insurance provided by the EOR or asked of the employee. This ensures you and your workers are safe from whatever pitfalls may come their way and also protects you from liability in the case of a workplace accident or harassment issue.

While in Canada, non-compete agreements are next to impossible to enforce, it's not uncommon to ask each worker to sign a non-solicitation agreement. What that agreement ensures is that they don't try to engage your clients on their own, or try to poach any of your employees to come work with them either. This can also be added along side a non-disclosure agreement to protect any trade secrets, processes or information they learn while they're there from being shared with competitors.

It's incredibly important, just like with regular employees, to get your Canadian employees to be familiar with and sign any and all worker health and safety agreements you have. This includes workplace violence clauses, harassment policies and rules about how to safely do their jobs without putting themselves or anyone else at risk. It's incredible important that this is included in the agreement with the EOR, so that everyone knows what it is that is expected of them and most importantly, to keep everyone comfortable, happy and safe.

What Not to Include

It may seem unusual, but it's not acceptable to include your employee manual alongside the agreement. While certain provisions like health and safety policies, mentioned above, are acceptable, they can't be expected to abide by the entire thing since they are not technically your workers.

Be sure that you know the labour laws in the region you're working within – this may seem like a no brainer, but a great deal of American laws are more different than you'd think and this means that Canadian employees have different standards. To that end, you're not allowed to include any policies or rules that violate those laws, such as asking for more than maximum hours, or offering less pay than the provincial minimum wage.

As the EOR is your partner, feel free to ask them what can and cannot be included. Their advice is crucial and can only make the process simpler.

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

Topics: Canadian EOR

7 Tips I Wish I Knew before Employing Someone in Canada

Posted by Stacey Duggan

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Sep 23, 2015 9:00:00 AM

7_Tips_I_Wish_I_Knew_before_Employing_Someone_in_CanadaCanada is the land of opportunity. Many foreign companies see the Great White North as a great business opportunity. Though profitable it isn’t always easy to expand. Specifically, when it comes to employing someone in Canada, there will be hurdles to jump over, challenges to overcome, and a lot of information to know to ensure that you’re being compliant with Canadian employment regulations.

To help you build a workforce in Canada, here are seven helpful tips.

1. Registering

Even though you’ve registered your business in your own country and have been in business for years doesn’t mean you don’t need to do it all over again when employing someone in Canada. Even if you only have one person on your payroll to start with, you’re going to need to register for a business number (BN). With this number, you can then register for a payroll account with the Canada Revenue Agency. An important thing to remember is that you must open up this account before the first remittance due date.

2. Your Independent Contractors May in Fact Be Employees

Be careful. If you’re employing someone in Canada on a contract basis in order to avoid the cost and hassle of dealing with payrolled employees, such as having to pay into CPP and EI and having to follow specific regulations and laws, make sure you’re classifying properly. Even if you have a written contract that identifies the worker as a contractor, the CRA may still make the judgment that the worker is in fact an employee and you will get hit with fines and penalties for this misclassification.

3. The Job Offer

When employing someone in Canada your company should put the job offer in writing. Ensure that the terms in the offer comply with the employment standards for the province or territory that you are operating in. This includes the salary, benefits, overtime pay, duties and responsibilities, terms of relocation, work hours, starting date, and probationary period, among others.

4. The Paperwork

When employing someone in Canada for the first time, you might not know what type of paperwork you need from the worker. So here it is: when an employee starts work, you will need his social insurance number (SIN) and you will need to have him fill out both a federal and provincial TD1 Form.

5. Employment Standards Vary by Province or Territory

Be careful when it comes to employment standards in Canada. They will differ depending on your location of operation. What might be legal or correct in one province may not be in another. For example, there will be different regulations for hours of work, tax rates, deductions, minimum wage, breaks, overtime, frequency of pay, and vacation pay, among other factors. Additionally, federally incorporated companies may be governed by either federal or provincial legislations depending on the type of work being done. Make sure you are following the correct regulations for your own province or territory.

6. Your First Payroll Remittance

Employing someone in Canada comes with certain obligations, one of which is government remittances. You will be required to remit the correct deductions you’ve withheld to the taxation centre. For your first remittance, you will need to send a cheque or money order for the funds due as well as a letter that states that you are a new remitter, the period that the remittance covers, your company name, phone number, and address, and your business number.

7. You Don’t Have to Do It Alone

Employing someone in Canada for the first time can be risky. If you’re not fully knowledgeable about the employment standards and the payroll and tax regulations, you could be putting your company at risk of penalties. Luckily, you don’t have to do it alone. You can partner with an employer of record (EOR). Your EOR will become the legal employer to your workers and will handle the work that comes with this responsibility.

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

Topics: Canadian Payroll, Payroll, EOR, Canadian EOR

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

Posted by Ray Gonder

|

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

U.S. Employers: There is No At Will Employment in Canada

Posted by Stacey Duggan

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Apr 10, 2014 8:41:00 AM

describe the imageAmerican Companies “At Will Employment Policy” and Canada’s “Reasonable Notice Policy”

We see it all the time in the movies. An employer at odds with a worker shouts out ‘You’re Fired’, the employee gathers their things, leaves the building and that’s the end of it. What you don’t see is the work the HR department then has to go through determining pay in lieu of notice, severance package and a possible wrongful dismissal suit. 

In the U.S. many employment relationships are considered to be ‘at will’ or, in other words, can be terminated by either party without cause or notice without the worry of retribution. In Canada no such relationship exists so hiring a Canadian employee can be much more complicated.

Canadian law states that an employer can terminate an employee without cause but they are required to provide ‘reasonable notice’ or compensation in lieu of this notice.

Minimum requirements for ‘reasonable notice’ vary from province to province and will depend on the tenure of the employee. If an employee has been with the company for less than three months the issue of termination is less complicated so often Canadian companies will refer to this as the “probationary period” and assess the employees ‘fit’ and ‘competence’ for the position before the three months end.

When terminating a Canadian employee without notice or pay in lieu, there must be evidence of ‘Just Cause’. Just cause can be used for certain serious acts such as theft or harassment or employees can be fired as a result of a series of minor incidents.  For the latter dismissal, the employer must document that they followed a progressive discipline policy of increasing severity.

A solid employment agreement is essential when it comes to outlining notice and probationary periods as well as other regulations when it comes to employment standards in Canada. An essential step to take before engaging with an employee in the great white north is to consult a company in the know, preferably one well versed in Canadian employment law.

The Payroll Edge is a Canadian based Professional Employment Organization (PEO) or Employer of Record (EOR) as it’s called in Canada. We take on the responsibility of employment compliance when it comes to hiring north of the border so you can focus on expanding your business presence in Canada rather than learning a whole new set of rules and regulations.

Contact us today for more information on how we can help you!


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

Topics: workforce compliance, EOR, Employer of Record, Canadian Employer of Record, American Business in Canada, Regulatory Compliance, Canadian EOR, Employment Agreements

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

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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

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