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3 Things You Need to Know about an Employer of Record in Canada

Posted by Stacey Jones

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Aug 22, 2019 9:00:00 AM

EOR-in-CanadaIf you’re like many ambitious American business leaders, you dream about expanding your business beyond the borders. Expanding internationally takes good business acumen, courage, and a little bit of luck.

Another key ingredient of success in any international market is making sure you have the right partners on your side. As you expand into Canada, you may wonder about who you need to have on your team. An employer of record (EOR) might be one of the partners you’re considering to help with business expansion.

Before you team up with an employer of record in Canada, though, you should know what you can expect. This quick guide will help you understand the services an EOR provides and how they could help your business succeed in the Great White North.

1. An Employer of Record in Canada Is Your Total HR Solution

First things first. What does an EOR in Canada do?

Much like their counterparts in the US, a Canadian EOR helps your business administer HR to your Canadian employees. They can assist with almost everything, from helping you locate talent to helping you design a health insurance program that really works for your employees north of the 49th parallel.

An EOR can also help you navigate the complexities of doing business in Canada. They’ll help you with payroll and taxes, making sure your CRA remittances are calculated correctly and submitted on time. They can assist with workers’ compensation. They may even be able to offer training and development opportunities for your Canadian employees.

One of the biggest advantages of working with an EOR in Canada is their ability to help you ensure your compliance. Employment law in the Canadian provinces is ever-changing, and getting a helping hand with compliance is usually a good idea.

2. A Canadian EOR Improves Efficiency

Doing business in Canada often means you have a steep learning curve ahead of you. For many American businesses, Canada is their first international expansion. For others, the similar cultures offer a sense of confidence and security.

This might lead to business owners who try to do it all themselves. This almost invariably leads to missteps, whether in the administration of payroll or in employee management. Not knowing the rules could bog down your team, even if they do come up with the correct answer in the end.

This situation slows down operations and makes communication with your Canadian employees frustrating for both sides.

An EOR can be a great solution. Since they’re already well-versed in Canadian employment rules, they can assist you in delivering more efficient HR service to your workers. Their expertise also streamlines communications with your employees.

In turn, everyone is able to get more done is less time. The EOR’s HR service can also improve employee satisfaction. Happier employees boost efficiency and productivity in your company as a whole.

3. The Advice You Need

A Canadian EOR does more than administer payroll. They can offer you the insights you need to succeed in the Canadian market.

Whether it’s advice on upcoming legislative changes or insights about Canadian work culture, the expert team at the EOR has seen it all. With their advice, you could plan your Canadian business operations with ease.

The Right EOR Is Out There

Some employers hesitate to work with an EOR in Canada because they’re not sure the services address their needs. Chances are they just haven’t found the right partner.

There are many different Canadian EOR out there, and one of them will be a great fit for your business needs. Whether you need help with payroll or a more comprehensive suite of services, the experts can help.

Topics: EOR, Canadian Employer of Record, Canadian EOR

How to Choose the Best Employer of Record

Posted by Stacey Jones

|

Aug 20, 2019 9:00:00 AM

choose-employer-of-recordExpanding into the United States is both exciting and a little intimidating for most Canadian business owners. The American market has a reputation as being a tough nut to crack, but if you succeed there, you can succeed anywhere.

Canadian business owners sometimes feel a little lost when it comes to the nitty-gritty of their US operations. When you step over the border, there are many changes, ranging from tax law to minimum wages to health care. As an employer looking to hire on American workers, you may not be sure where to start.

One smart move is to work with an employer of record. An employer of record can help you navigate and succeed in an unfamiliar business landscape. There are many EORs in the US, and each of them offers something a little different. How can you be sure you’ve picked the right partner for your business?

The following tips can help. Read on to learn how to choose the best employer of record for your business needs.

Define Why You Need an Employer of Record

The first step you should take is to define your business’s needs. Since each EOR offers something a bit different, knowing what you need could help you single out the best fit for your business.

Consider what you need the most help with. Is it locating talent, or do you require more help with navigating US payroll? How familiar are you with US business taxes or employment legislation in the state you’ll be operating in?

Most Canadian employers find they need a comprehensive suite of services. Look at what each EOR specializes in. Some may be more focused on helping you find and hire talent, while others place their pride in the payroll services. At the end of the day, any EOR you hire should be ready to help you manage your US employees from end to end.

Do Some Research

The next step to finding the right EOR for your business is to research different firms. You’ll want to ask plenty of questions during this stage.

First, make sure the EOR offers the services you’re most interested in. Then, check that they serve the area you plan to operate in. You might find a great EOR, but if their service is limited to Maryland and you plan to open up shop in California, you might have a problem.

Next, compare EORs who offer the services in your new location. Do they have a specialty? Do they offer additional services that could help you as your business expands?

The final step of your research should be reaching out to some of the employers of record you’ve researched. Ask about their experience in your industry or call for a quote.

Evaluate Offers and Customer Service

With a few quotes in hand, you can begin to compare EORs and determine which one is best suited for your business needs. While getting the right services at the right price is important, you’ll also want to consider the customer service you receive.

How quickly does the EOR’s team get back to you? Can they answer your questions about payroll or workers’ compensation? You should walk away with a sense of confidence. After all, this is a partnership. You’ll be working with the EOR for some time to come, so if they’re not meeting your expectations during the research and quotation phase, you should think twice about signing on the dotted line.

Get Ready to Grow

The final matter you should think about when you’re looking for the best EOR is the future. If you partner with this EOR today, will they still be able to serve your needs a year from now? Five years from now?

The employer of record you choose should be ready to grow with you. Finding the right EOR could be just a click away.

Topics: EOR, Employer of Record, Canadian Employer of Record, Employment of Record Services

How an Employer of Record Can Help Your Company

Posted by Stacey Jones

|

Aug 6, 2019 9:00:00 AM

As you look to take your business south of the border, you may have many questions. Canadian business owners sometimes feel a bit daunted by entering the US market, and for good reason. There are many different rules to be aware of, as well as things such as cultural architecture-buildings-city-861609differences.

One of the smartest decisions any Canadian business owner could make is to ask for help. You have plenty of choices when it comes to picking a partner, and all of them offer something a little bit different.

One option you may consider is an employer of record (EOR). It’s important to consider what an EOR does, and how they will help you grow your business. 

An Employer of Record Makes Compliance Simple

One of the most compelling reasons to work with an EOR is that they already know the US market. They’re aware of the different rules and regulations. You can call on their expertise to help you navigate these uncharted waters.

Compliance work is key to a business’s success, but it might be a tall task for even the most talented of HR teams. By working with the EOR, you could reduce the amount of time your team spends sorting out taxes codes and deciphering employment law.

EORs Save Businesses Time and Money

Since the EOR works to make your US operations comply with the letter of the law, they can help you avoid hefty fines and penalties. Taking a look at payroll showcases how the EOR helps and provides value.

The IRS reports the average small business pays $845 US per year in payroll fines. Late payments are the most common issue. By working with an EOR, you can avoid late payments and other US payroll missteps. That puts money back in your business’s pocket. You could probably think of a few better ways to spend nearly $850.

More than that, the EOR also saves you money by reducing the amount of time you spend on tasks like payroll and compliance. Since the employer of record’s team is made up of experts, they make quick work of almost any task you set out for them.

Boosting Employee Satisfaction

Canadian business owners should consider working with an EOR to increase employee satisfaction.

How does an EOR make your employees happier? The EOR’s expertise and skill in delivering HR services make it easier to manage your employees the right way. They can help you offer the right compensation package to your US workers, as well as handling payroll, worker’s compensation, and more.

Better yet, they could also advise on where your company policies might be improved to make your firm more attractive to prospective candidates. This makes it easier to hire the right talent and keep them onboard longer.

Navigating Cultural Difference

One thing Canadian business owners may not think of is just how different American work culture is from their own. American workers have very different expectations than Canadian ones. They even prefer different styles of communication and leadership.

Those elements might cause friction between your business and those who work for you. By working with an EOR, you can change the story and provide a better workplace environment. An experienced EOR could help you pinpoint problem spots, and advise you on how to narrow the gap between your Canadian company culture and what your US workers expect from you.

Increase the Success of Expansion Efforts

Perhaps the biggest benefit of working with an EOR is their ability to help you succeed in the US market. Many Canadian business owners make missteps when they go it alone, which may cause problems for the business.

By calling on the experience and expertise of the EOR, you can make expanding into the US much smoother sailing. If you’re curious about what an employer of record could do for you, get in touch with an expert team today.

 

Topics: EOR, Business Expansion, Employment of Record Services

How an EOR Can Help US Companies Expand into Canada in 2016

Posted by Corinne Camara

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Feb 19, 2016 9:00:00 AM

How_an_EOR_Can_Help_US_Companies_Expand_into_Canada_in_2016.jpgAs 2016 begins, a lot of companies have begun considering expansion – finding new markets, plucking from fresh talent pools, diversifying their portfolios – there are a lot of great reasons to go ahead with it. That said, many businesses find themselves nervous about making the push since there's a great deal involved. New laws to learn, lots of paperwork and administrative duties to complete – it can be overwhelming.

Those difficulties, however, are precisely why more companies than ever have started turning to an employer of record (EOR) for assistance. When handed the alternative of practically starting again in a foreign environment, an EOR becomes an excellent choice for partnership and can help you expand your business more quickly, more efficiently, and with less bureaucracy. And we could all use less bureaucracy.

Skirt Tedious, Unnecessary Paperwork

One of the main benefits of an EOR is that by partnering with one, you're able to avoid registering your business officially with the Canadian Revenue Agency. In effect, your employer of record acts as the legal employers of any workers you want to hire and contracts them to you. Because they're an already established business in the region you want to expand to, they can operate legally and without consequence, ensuring you get all the workers you need. This means you can bypass a great deal of administrative tasks and start hiring almost immediately.

Since an EOR is responsible for your employees, they handle the payroll, human resources, insurance, and all other applicable concerns. You merely need to draft up an employer of record employee agreement and you're on your way to getting started.

Navigate Complex Laws

One of the trickiest and most stressful aspects of starting a business in a new area is learning what could be thousands of new laws. On top of human rights laws, you have myriad labour codes and employment regulations to learn, as well as tax deadlines that can vary province to province. In Canada alone, how much and when you pay your workers shifts from Alberta to Ontario, from Quebec to New Brunswick, and that can be especially difficult for smaller companies to learn when they have so many other things to be worried about.

EORs, on the other hand, are focused experts when it comes to Canadian law and have your back. By partnering with an EOR, you're also getting their full legal expertise and the best compliance possible to ensure you and your company remain safe. They stay up-to-date on all new laws and regulations as they update often, and are constantly training to become better and more efficient as time goes by. The money you save being able to avoid hiring a full legal team of experts is exponential and can always be put to better use. Being able to stay compliant for a lower cost though? That's irreplaceable.

Focus on Operations

As you can generally see, an EOR’s job is to ensure you have as few obstacles in your way as possible while you expand your business, because they know that changes that dramatic will always be a source of stress. Their aim is to reduce that stress and make everything smoother for you.

The most important thing for any business, in the end, is the ability to focus and be able to concentrate on their core goals. When you're muddling through business expansion, registration, learning laws, and struggling to understand the new environment you're in, that can severely halt operations and make it difficult to get back on track. An EOR understands that, and knows where your focus needs to be. That's why they go out of their way to ensure that your needs are being met and that you can do what you do best.

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Topics: EOR, Expanding Business into Canada

Choose an Employer of Record That Provides Additional Services

Posted by Karen McMullen

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Jan 20, 2016 9:00:00 AM

Choose_an_Employer_of_Record_That_Provides_Additional_Services.jpgBy now, the benefits of an employer of record are clear to most people, and more businesses than ever have been partnering with them to the effect of cost savings, quality workers and efficiency. We know that they can make the process of business expansion dramatically smoother by acting as an employer of workers on the behalf of other businesses, which helps to bypass the difficult and often lengthy process of business registration. We also know that they place a high emphasis on compliance, which helps reduce the risk of paperwork errors leading to costly fines and penalties.

That said, many still aren't aware of the other benefits and services an employer of record can offer to businesses both large and small. If you're not dealing with an EOR who's going above and beyond, maybe it's time to consider a switch.

Employee Benefits

One of the challenges a US business faces when employing Canadians through an EOR is benefits. Most of the time, Canadian employees aren't covered by the benefits their US counterparts are used to, and securing additional benefits for them can be difficult and expensive. That's why an excellent EOR has packages that already include these benefits and more, so none of your employees – regardless of their location – have to miss out.

Employment packages can include benefits and RSPs (which are much like 401Ks) contributions, and they come equipped with the ability to handle any expenses, commissions, allowances or more than you want to offer to your workers. Because EORs deal with a massive amount of employees, spread out over many companies, they can also get quantity based benefit package deals which would be impossible for a smaller business to get with their numbers. That means an incredible amount of savings on your part for high quality packages.

Human Resources and Payroll Services

Most EORs have some background in human resources and payroll, but don't place a very high emphasis on it. A good employer of record will have a very strong background in both HR and payroll, which allows their expertise to shine through in the form of ensuring increased efficiency and innovation at every opportunity. An EOR that can manage every aspect of employee interactions is not just a huge money saver, but a time saver and resource saver as well. Consider having one organization hiring your employees, managing their benefits and day-to-day needs, negotiating on your behalf, dealing with agreements and ensuring that full tax remittances are made. That means workers’ compensation, provincial taxes, employment insurance, contributions to RSPs, and other delicate financial situations.

Instead of finding one system and sticking with it, your employer of record should be constantly searching for ways to develop a more sophisticated and tailored system for your business and its needs. Keeping a close eye on any legal changes that will affect employment, payroll taxation and standards, researching the latest techniques and methods and ensuring that all tools and technology are up-to-date is the least of their job. They can also manage difficult and risky situations like claims management (even investigations) on your behalf, which leaves you less to be worried about.

Pricing

Naturally, in business, the bottom line is extremely important. That's why a lot of businesses have found themselves shy when it comes to engaging an EOR, because many of them have a great deal of surcharges on top of a base fee, and there are often hidden costs.

A good EOR will ensure you know exactly what you're getting and how much you're paying before any payroll is processed, to ensure that you're comfortable – all with no surprise surcharges or fees. Now that you know what else an employer of record can do for you, consult one and see what solutions they have for you.

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Topics: EOR

3 Perks of Using an Employer of Record

Posted by Stacey Jones

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Jan 13, 2016 9:00:00 AM

3_Perks_of_Using_an_Employer_of_Record.jpgEmployers of record are being talked about now more than ever, rising in popularity over the last few years dramatically. It's no wonder – companies all over the world have started making use of them day-to-day and they're quickly becoming a new standard of business.

That said, there are some who cast doubt on the subject, not fully sure what it is an employer of record can offer them. Whether it's a large business that's already secure with in-house departments or a small business, unsure that it can make use of its services, there are myriad benefits that are tailor made for them. Find out what an employer of record can do to bolster your success and help you achieve your goals.

Payroll

Naturally, payroll is a fact of business and as such, is often tossed to the side and considered a mere peripheral despite its importance. We can often take for granted just how complex – and expensive – it is, and as new laws unfurl every year, it's something we need to consistently be up to date on to ensure it's being done right.

Payroll law in itself is a very complex branch of employment law and with each new employee, it only gets muddied further as you have to take into account garnishments and levies, vacation and overtime pay, unemployment insurance and relevant retirement considerations. An employer of record is well equipped to handle payroll for both large and small businesses, since they can dedicate an entire highly skilled team to it. They're constantly updating their knowledge, their technology and their techniques to ensure utmost efficiency and best of all—they can handle any surprises that may be hurled your way with ease.

Human Resources

Consider everything that's involved in human resources – even if we set aside those that also command payroll, they're fully responsible for employee accrual, registration, set up and dismissal. A human resources department is also required to maintain a respectful workplace, resolving any disputes that may arise and helping to enforce health and safety laws, as well as workplace harassment or violence clauses. They might negotiate contracts or negotiate with unions on top of all that, and that makes them a very important aspect of your business. When companies outsource to an employer of record, they also get the safety that comes with them, since they have up-to-date legal expertise and knowledge of the market. This means the minimization of risk and a lower price tag to boot.

Business Expansion

Especially in today's market, more companies than ever have been expanding into foreign markets in order to gain an edge, a unique perspective, or even just to explore a new talent pool. It's always difficult to get started, but in the end often worth it for the benefits reaped. That said, maybe companies wouldn't know where to begin and those who do never look forward to mountains of paperwork, months of registration and setting up infrastructure in order to begin hiring.

This is where an employer of record is the most helpful – while they can already deal with the minutia tied to human resources and payroll, they can also expedite the big picture. An employer of record specifically specializes in employee management – meaning, they act as the legal employer of your workers in the target country you mean to expand into, and since they already have all the infrastructure and registration behind them, they can start contracting employees to you immediately. Because of this, you can forget hefty amounts of legal research and bureaucratic nightmares and start focusing on the most important aspects of your business, like operations and increasing your revenue in a new market. Consult with an employer of record and see what solutions they can tailor for you.

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Topics: EOR

How an Employer of Record (EOR) Can Help with Benefits

Posted by Ray Gonder

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Jan 4, 2016 9:00:00 AM

How_an_Employer_of_Record_EOR_Can_Help_with_Benefits.jpgIt's generally thought that all companies would love to be able to provide benefits – not only do they keep your workers happy and healthy, but they can attract new, high quality employees to various positions across your company as well. That said, benefits are expensive and depending on the economic climate, something that comes and goes alongside financial ups and downs. For many large businesses, this may be considered less of a problem since they have abundant resources and well-established systems, but for small businesses and start-ups hoping to offer benefits to their employees, it can be an overwhelming and often crippling cost.

Because of this, more companies than ever have been partnering with an employer of record, which can help to secure these employee benefits.

Efficiency

An employer of record service provides a unique opportunity for efficiency in the workplace, especially when it comes to your human assets. The employees that you work with through an employer of record are in a special situation – you're not responsible for any of the associated human resources costs. Because they act as the legal employer of your workers, it's up to them to deal with all the tasks that come with that responsibility. That means they will handle any and all payroll issues (including taxes, remittances, garnishments, EI payments, retirement contributions, provincial and federal deposits, etc.), as well as deal with any other peripherals required. When you consider it, the simple process of delegating or outsourcing their employment, a lot of businesses have found themselves saving a great deal of time and money from the start.

On one hand, when a business factors in the cost of an entire department, it simply isn't a reality for many – but an employer of record service works on a different scale. Instead of paying the salaries of several people, you'll find yourself paying a flat rate and effectively getting the expertise of a whole department in return – and not just a hiring department, but human resources, payroll and legal all rolled into one. That speaks to a great deal of cost savings and efficiency, which can open up your budget to consider better or fuller benefits.

Package Deals

An employer of record has a massive amount of employees working for them, given their position, since they work with a variety of companies. Because of that, they can negotiate incredible rates for benefit plans with insurance companies and suppliers that will work for your employees – rates that are impossible for smaller companies to obtain due to sheer numbers. Taking advantage of this, many companies have found themselves with superb benefits, like medical, dental, optical and more, despite their small size or limited budget. As the owner, you're also able to act as a company employee and take advantage of these benefits yourself, so you're not left out. Keep in mind that an EOR is also more than happy to work out deals on your behalf with preferred providers if need be, and can negotiate on behalf of you and your workers. Because this is their business, they know how to get the most out of your budget and it's comforting to know that someone else is also keeping an eye on your bottom line.

Some could argue that despite the cost of benefits, there's an even higher cost to going without in terms of employee safety, productivity and happiness. Luckily, companies no longer need to be put in a position of pressure when it comes to providing these benefits. Consult with an employer of record and see what they can do for you.

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Topics: EOR

Why Workforce Expansion into Canada Worries Some US Companies

Posted by Stacey Jones

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Dec 28, 2015 9:00:00 AM

Why_Workforce_Expansion_into_Canada_Worries_Some_US_Companies.jpgDespite the growing interest of US companies in workforce expansion into Canada, there is still some hesitation from others. It's understandable – any dramatic shift or expansion of a business is something to cause pause. Regardless, many companies have happily taken the plunge so far and will no doubt be followed by others. Perhaps that's why it's so imperative to do your research and find the answers you need to decide if expansion, in it's various forms, is the right solution for you. Luckily, we have a lot of those answers right here.

Establishing a Canadian Presence

There's a lot of work involved in workforce expansion into Canada, the least of which is establishing an administrative presence inside the country in order to be legally able to hire Canadian employees. For many companies, the prospect alone scares them off since it's a multi-step process involving a great deal of paperwork and compliance with new laws and regulations. It can also be an annoyance for businesses that have already worked to establish themselves in the US, or for businesses that want to begin hiring immediately.

To begin with, you must first register with the Canadian Revenue Agency, which will issue you a business number. Once you have that, you have to begin setting up your tax accounts, registering for business insurance and ensuring you have the appropriate banking infrastructure. It's much the same as the process of setting up a business in the United States, but be sure to carefully pay attention to the differences – they could be fairly dramatic in some cases.

Ongoing Legal Compliance

When committing to a workforce expansion into Canada, it's not just legal establishment you need to be concerned about, but ongoing legal compliance, which means things like regularly filing different sets of taxes on time, ensuring your business is operating according to health and safety laws and remains up to code at all times, even as laws shift. Keep in mind that many laws change depending on the region or province you're in, so it's also important to study the area you'll be moving into, as well as any necessary federal regulations as well. It can be nerve wracking, even for companies with well-established legal departments, to have to worry about new and different laws that apply, especially in the wake of an expansion.

Unfamiliar Labour Codes and Laws

Perhaps one of the hardest parts of workforce expansion into Canada is paying close attention to labour laws, both federal and provincial. While most of them are very much the same as most regions in the United States, there are some key differences that need to be sorted out before you go ahead and begin hiring.

Classification (and misclassification) is a major issue when it comes to the CRA, since they are cracking down on companies that classify their employees incorrectly, whether purposefully or not. This can mean the difference between serious fines and levies and even jail time if not observed correctly, so it's best to ensure all your employees and contractors are appropriately filed.

The way that your contracts operate will also differ in Canada – while some laws are virtually identical, there are some contractual clauses that are almost impossible to enforce north of the border, such as non-compete agreements. This can also mean the difference between how much you need to pay your workers, how often you need to pay them and myriad other things like vacation pay, remittances, overtime and more.

It's for these reasons that so many businesses have turned to employers of record services (EORs) to not only simplify the process, but to ensure it's as smooth and efficient as possible. Consider a workforce expansion into Canada without all the trouble and find out what an EOR can do for you.

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Topics: EOR

How an EOR Can Help Your US Company Expand Business into Canada

Posted by Ray Gonder

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Dec 18, 2015 9:00:00 AM

How_an_EOR_Can_Help_Your_US_Company_Expand_Business_into_Canada.jpgAs businesses all over the world consider global growth, an increasingly common choice for US companies is expansion into Canada. Think about it – the culture is familiar, making it easy to communicate your needs and wants; the market is strong and intrinsically tied to that of the US and the workers are well known to be intelligent, highly skilled and productive. It's a tactic that's worked for a great deal of businesses so far and this is why more companies have been looking to expand business into Canada as an option.

There are so many aspects to consider when you begin to expand business into Canada; it's no wonder that many are left with more questions than answers. There are certain steps to ensuring success, and we can help you fully understand them.

Compliance

First and foremost, you need to consider the laws and regulations that are involved in an expansion. Specifically, many businesses tend to have trouble because while Canadian law seems extremely similar in a lot of ways, it often diverges depending on the region and on differences within the court system itself. Be sure to thoroughly investigate what is expected of you as an employer in the province you're working within – this can affect how much you pay your workers and how often, what kind of benefits you're expected to offer and a lot more.

You'll also be required to register your business and set up an administrative presence before you can begin to expand business into Canada. You'll also need to consider complex employment reporting, tax remittances and deadlines and navigate any other regulations the CRA (Canadian Revenue Agency) is setting down. For many companies, a common way to handle this issue is to hire an employer of record, which we'll discuss in more detail shortly.

Human Resources

When working with employees in another country, human resources can become challenging. For the most part, you likely won't have to worry much about language barriers when dealing with Canada, but it could still come up and that's just one instance of complexities that could arise. Consider hiring an on-site manager – not only has it been shown to reduce foreign employee unhappiness but it's also good to have someone who's more familiar with the laws and culture of the country and region you're working within. It's also imperative to have dedicated HR professionals who are able to ensure that all issues of on-boarding, termination, layoffs, human rights complaints, health and safety issues, contract negotiations and a lot more are dealt with professionally, legally and in a way that benefits both the company and its employees.

EORs

Employers of record are an increasingly popular option for companies—especially those who want to expand business into Canada. As mentioned above, they come in handy for a lot of reasons – compliance and human resources are just two of the many benefits.

When it comes to compliance, an EOR takes a great deal of pressure off of your company. Legally, they act as the employer of your employees on your behalf, and “contract” them out to you based on an arranged rate. By doing so, you're able to completely skirt any administrative registration required to set up your business – meaning you can get started hiring and working in Canada right away. Because the EOR is your workers’ employer, they're also responsible for your taxes, their taxes, their payroll and all other issues of labour law that apply.

On an HR level, they can help you to minimize costs and risks by handling all of those issues on your behalf too. This cuts both your legal and human resources budget down into a single cost, saving an incredible amount of money and resources. Truthfully, companies attempting to expand business into Canada couldn't do better than to consult with an EOR before they did.

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Topics: EOR

Why Foreign Companies Can't Just Pay Canadians As Contractors

Posted by Ray Gonder

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Dec 9, 2015 9:00:00 AM

Why_Foreign_Companies_Cant_Just_Pay_Canadians_As_Contractors.jpgIt can be immensely challenging hiring workers from another country, but the rewards have often outweighed the problems, which is why so many foreign businesses have been hiring Canadian employees as of late. Because of those challenges, however, it can be tempting to try to skirt certain regulations and laws by classifying your workers in a different way. We've all heard of companies doing it, and we've seen the trouble that is apparently saved by going that way as well, but there are actually a lot of problems with that method – problems that can lead to serious penalties in both legality and business.

Misclassification Isn't the Answer

If you're hiring Canadians to be independent contractors, then that's fine and you have no problem. You merely follow the rules that apply to that and everything works out well. Independent contractors have different employment and legal standards, which is why it's an attractive solution for people attempting to simplify their foreign employment. That said, if you're looking for Canadian employees and you try to classify them as contractors to save yourself time, money and/or trouble, you're in violation of the law and the penalties are hefty and swift.

Misclassification is a major issue and one that the Canadian Revenue Agency (CRA) has been trying to stomp out, especially when it comes to foreign businesses taking advantage of that classification to dodge taxes or laws. When you hire a worker who's not meant to work independently, you are required to follow Canadian labour laws, regardless of the country you're based in. Naturally, since you don't want to risk abusing the system or crossing the CRA, be sure you classify your Canadian employees as employees.

Independent Contractors Are Independent

For those businesses that misclassify and label their Canadian employees as independent contractors anyway, they will be surprised to find that they also lose a lot of rights in that situation. While your employee might be required to work 8 hours a day between 9-5, a worker labelled as independent will instead be able to set their own hours. Naturally, you can try to enforce a schedule personally, or you could take them to court – either way, they wouldn't be legally required to follow many of the rules you've laid out, even if it exists in the form of a contract. They'd even be legally able to subcontract their work to others if they needed to, and this leaves you with next to no control over how they complete the work you've given. For most who intended to hire an independent contractor, this is exactly what they're expecting and not a problem. For someone who wanted an official employee, however, they'll be in for a nasty surprise.

Consider an EOR

It's a complicated situation, that's clear enough, and this has a lot of foreign businesses concerned about how to easily, efficiently and cheaply manage Canadian employees. While dealing with regulations, infrastructure and tax filings sounds like a complicated pain, misclassification isn't the answer either as you can see.

That's why so many have turned to EORs (employers of record) as partners in their ventures into the Canadian workforce. For US businesses, they'll be familiar with the type of organization as they're known as PEOs across the border. Effectively, an EOR is already set up to do business in Canada and are well familiar with all laws and requirements that are expected of an employer. This means they have the infrastructure, insurance and registration to hire legally in Canada without all the hassle. As a partner, they would become the legal employers of your Canadian employees and as you pay them, they will hire, manage and pay your employees for you, as well as handle all necessary taxes and compliance within the workplace. Forget skirting laws with grey areas and illegal activity – hire an EOR, maintain full control and never worry about breaking the law.

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

Topics: EOR

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