Global firms looking to enter a rising business market in order to increase profits and brand awareness often expand their business operations into Canada. Though this can be an excellent business decision, it does come with its unique challenges.
Most notably, managing Canadian employees will be one of the most difficult parts of expanding operations into the Great White North. The global firms that do not manage their new workforces properly end up making costly mistakes that can harm their image and their bottom line.
Global firms commonly make payroll mistakes. The payroll and tax regulations associated with managing Canadian employees are complex, ever changing, and cumbersome to comply with. In addition, they might differ depending on where you’ve set up your operations. Some of the common payroll mistakes you should avoid making include:
- missing remittance deadlines
- ignoring CPP and EI maximums and exceptions
- not having employees fill out the proper tax forms during onboarding
- not understanding taxable expenses and allowances
- miscalculating overtime pay
- misclassifying employees as independent workers
Global firms make these and other payroll mistakes commonly most often because they do not have the knowledge, skills, and experience needed to properly process and administer payroll, because they are following the tax and payroll regulations of their home country, or because they are swamped and not giving the task the level of focus it needs in order to ensure accuracy.
Human Resources Mistakes
Many global firms are also guilty of making human resources mistakes while managing Canadian employees. They might not hire the right candidates, document and report issues, use up-to-date employee handbooks, train properly, or ensure employee files are appropriately filled out and filed.
Even more dangerously, though, some global firms don’t understand the basic employment laws of the country, including the standards and regulations surrounding hiring, firing, layoffs, discrimination, leaves, disability, immigration, and health and safety. When it comes to labour laws, health, and safety in particular, compliance is vital. Having a “what-works-at-home” mentality can be disastrous when managing Canadian employees.
The Cost of Mistakes
Making payroll and human resources mistakes while managing Canadian employees can be costly to your international company. Cutting corners, not bothering to look up and learn the appropriate legislature, and not making compliance a top priority can be devastating.
You can face civil lawsuits from your employees that will cost you in large settlements, you can be hit with substantial fines and penalties if you do not follow the government’s regulations, and you can be forced to pay interest fees if you’re late on any government deadlines. Additionally, making payroll and human resources mistakes can put your employees at risk of harm and damage your reputation in your industry.
Engage an Employer of Record
You cannot overlook the importance of managing Canadian employees properly. If you fail to meet your obligations as an employer, the costly mistakes you make can significantly hurt your expansion efforts.
To avoid making payroll and human resources mistakes and to ensure your firm is always compliant to Canadian law, consider utilizing the services of an employer of record (EOR). The EOR will take over as the legal employer to your workforce, and as such, will handle the responsibilities and liabilities that come with employing Canadian workers.
The EOR will comply with all federal and provincial labour and payroll regulations, including taxation, employment standards, and health and safety. It will ensure ongoing compliance as these regulations evolve and change. It will take care of filling out the required paperwork. It will remit all information and payments to the government. And it will guarantee accuracy.
An employer of record will manage your Canadian workforce, so you don’t have to worry about making costly mistakes. With an EOR, you can get back to focusing on your business expansion, all the while knowing that your new employees are being well managed.