An international company venturing into Canadian water with its business operations can get into trouble with Canadian payroll laws. The laws are strict and complex, and it can be easy to make innocent payroll errors when trying to pay Canadian workers. However, innocent or not, these mistakes can lead to heavy penalties and fines, which, naturally, every international company wants to avoid at all costs. Getting into legal trouble when it comes to Canadian payroll laws can cost you an arm and a leg, and make it fiscally impossible to continue to employ workers in Canada.
Here are three reasons why an international company can get into trouble with Canadian payroll laws, so you can take a proactive approach at being compliant and avoid making costly errors.
Often, an international company will think that all it has to do to pay Canadian workers is to convert the funds to Canadian, cut them some cheques, and mail them out. However, misclassifying your employees to save yourself the trouble of dealing with payroll laws can be a fatal mistake. Taking the easy way out is illegal and will lead to costly repercussions by the government if you get audited, even if you simply took this route out of ignorance or unfamiliarity with the foreign legislature. As a business operating in Canada, you’re required to know the ins and outs of the Canadian payroll laws. Ignorance and unfamiliarity are not legitimate reason to make payroll compliance and employment standards errors.
So you’ve read the Canadian payroll legislature and you think you have a good grasp on the terms, language, and requirements. This is a great first step to compliance, but you can still run into some trouble from lack of experience. If you’re just starting out in the country, you likely don’t know how each of the laws you’ve read about apply to your specific situation, and even if you do, you might be unsure about how and when to register your accounts, send your remittances, or perform your taxes. The laws vary by province, so it can be difficult to keep up to date with exactly when and where you need to be sending payroll information to the government. If you miss out on a deadline simply because you didn’t realize there was one, you could still get into trouble. Experience with payroll laws takes years to acquire, so it’s natural that an international company won’t have all the experience needed to apply the correct laws to the correct situations right away.
Keeping up with payroll legislature takes vigilance. The laws change frequently and you need to be on top of the updates to ensure you’re always compliant. What’s more, you need to track and maintain various accounts to stay current. If you’re not working on your payroll attentively, you can easily miss a deadline for an account, lose track of hours or vacation days, or misclassify employees. Attention to detail and careful consideration are vital to your company’s payroll success.
If you’re operating on Canadian soil and using Canadian workers, you need to be intimate with the payroll laws of the country. Not knowing them, understanding them, or implementing them properly within your payroll system can get you into trouble with the government authorities, which can cost you a lot of money in fines. To avoid any legal ramifications due to your payroll processes, make sure you read the appropriate laws for your company, get experience in order to understand the laws better, and vigilantly stay on top of your payroll processes.